Exhibit 2.02
BYLAWS OF
SHR CORPORATION
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A California Corporation
ARTICLE I
OFFICES OF CORPORATION
Section 1. PRINCIPAL 1 OFFICES. The principal executive office for the
transaction of the business of the corporation is hereby fixed and located at
2210 San Joaquin, Fresno, California 93721. The Board of Directors is hereby
granted full power and authority to change the principal office from one
location to another within or without this state.
Section 2. OTHER OFFICES. The Board of Directors may at any time establish
branch or subordinate offices at any place or places.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of Shareholders shall be held at any
place within or outside the State of California designated by the Board of
Directors. In the absence of any such designation, Shareholders' meetings shall
be held at the principal executive office of the Corporation.
Section 2. ANNUAL MEETING. The annual meeting of Shareholders shall be held
on the first Monday of August in each year at 10:00 o'clock, a.m. However, if
this day falls on a legal holiday, then the meeting shall be held at the same
time and place on the next succeeding full business day. At this meeting,
Directors shall be elected, and any other proper business within the power of
the Shareholders may be transacted.
Section 3. SPECIAL MEETING. A special meeting of the Shareholders may be
called at any time by the Board of Directors, or by the Chairman of the Board,
or by the President or Vice President, or by one or more Shareholders holding
shares in the aggregate entitled to cast not less than ten percent (10%) of the
votes at that meeting.
If a special meeting is called by any person or persons other than the
Board of Directors, the request shall be in writing specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the Chairman of the Board, the President, any
Vice President, or the Secretary of the Corporation. The officer receiving the
request shall cause notice to be promptly given to all the Shareholders entitled
to vote, in accordance with the provisions of Sections 4 and 5 of this Article
II, that a meeting will be held at the time requested by the person or persons
calling the meeting, not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given within twenty
(20) days after receipt of the request, the person or persons requesting the
meeting may give the notice. Nothing contained in this paragraph of this Section
3 shall be construed as limiting, fixing or affecting the time when a meeting of
Shareholders called by action of the Board of Directors may be held.
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of
Shareholders shall be sent or otherwise given in accordance with Section 5 of
this Article II not less than ten (10) days nor more than sixty (60) days before
the date of the meeting. The notice shall specify the place, date and hour of
the meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted, or (ii) in the case of the annual meeting, those
matters which the Board of Directors, at the time of giving the notice, intends
to present for action by the Shareholders. The notice of any meeting at which
Directors are to be elected shall include the name of any nominee or nominees
whom, at the time of the notice, management intends to present for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a Director has a direct or indirect financial
interest under Section 310 of the Corporations Code of California, (ii) an
amendment of the Articles of Incorporation under Section 902 of that Code, (iii)
a reorganization of the Corporation, under Section 1201 of that Code, (iv) a
voluntary dissolution of the Corporation under Section 1900 of that Code, or (v)
a distribution in dissolution other than in accordance with the rights of
outstanding preferred shares under Section 2007 of that Code, the notice shall
also state the general nature of that proposal.
Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
Shareholders' meeting shall be given to each and every Shareholder either
personally or by first-class mail or telegraphic or other written communication,
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charges prepaid, addressed to the Shareholder at the address of that Shareholder
appearing on the books of the Corporation or given by the Shareholder to the
Corporation for the purpose of notice. If no such address appears on the
Corporation's books or has been so given, notice shall be deemed to have been
given if sent to that Shareholder by first-class mail or telegraphic or other
written communication to the Corporation's principal executive office, or if
published at least once in a newspaper of general circulation in the county
where that office is located. Notice shall be deemed to have been given at the
time when delivered personally or deposited in the mail or sent by telegram or
other means of written communication.
If any notice addressed to a Shareholder at the address of that
Shareholder appearing on the books of the Corporation is returned to the
Corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the Shareholder
at that address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the Shareholder on
written demand of the Shareholder at the principal executive office of the
Corporation for a period of one year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice of any
Shareholders' meeting may be executed by the Secretary, Assistant Secretary, or
any transfer agent of the Corporation giving the notice, and filed and
maintained in the minute book of the Corporation.
Section 6. QUORUM. The presence (in person or by proxy) of the holders of a
majority of the shares entitled to vote at any meeting of Shareholders shall
constitute a quorum for the transaction of business.
The Shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding
the withdrawal of enough Shareholders to leave less than a quorum, but no action
(other than adjournment) may be taken unless approved by a majority of the
shares necessary to constitute a quorum.
Section 7. ADJOURNED MEETING; NOTICE. Any Shareholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time
by the vote of the majority of the shares represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 6 of this Article II.
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When any meeting of Shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the Board of Directors shall
set a new record date. Notice of any such adjourned meeting, if required, shall
be given to each and every Shareholder of record entitled to vote at the
adjourned meeting in accordance with the provisions of Sections 4 and 5 of this
Article II. At any adjourned meeting the Corporation may transact any business
that might have been transacted at the original meeting.
Section 8. VOTING. The Shareholders entitled to vote at any meeting of
Shareholders shall be determined in accordance with the provisions of Section 11
of this Article II, subject to the provisions of Sections 702 and 704,
inclusive, of the Corporations Code of California (relating to voting shares
held by a fiduciary, in the name of a corporation, or in joint ownership). Said
Shareholders are entitled to cast one vote per share. The Shareholders' vote may
be by voice vote or by ballot; provided, however, that any election for
Directors must be by ballot if demanded by any Shareholder before the voting has
begun.
On any matter other than the election of Directors, any Shareholder
may vote part of to shares in favor of the proposal and refrain from voting the
remaining shares or vote them against the proposal, but, if the Shareholder
fails to specify the number of shares which the Shareholder is voting
affirmatively, it will be conclusively presumed that the Shareholder's approving
vote is with respect to all shares that the Shareholder is entitled to vote. If
a quorum is present (or if a quorum. had been present earlier at the meeting but
some Shareholders had, withdrawn) the affirmative vote of a majority of the
shares represented and voting, provided such shares voting affirmatively also
constitutes a majority of the number of shares required for a quorum, shall be
the act of the Shareholders, unless the vote of a greater number or voting by
classes is required by California General Corporation Law or by the Articles of
Incorporation.
At a Shareholders' meeting at which Directors are to be elected, no
Shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes which such Shareholder normally
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charges prepaid, addressed to the Shareholder at the address of that placed in
nomination before commencement of the voting and a Shareholder has given notice
before commencement of the voting of the Shareholder's intention to cumulate
votes. If any Shareholder has given such a notice, then every Shareholder
entitled to vote may cumulate votes for candidates in nomination and give one
candidate a number of votes equal to the number of Directors to be elected
multiplied by the number of votes to which that Shareholder's shares are
normally entitled, or distribute the Shareholder's votes on the same principle
among any or all of the candidates, as the Shareholder thinks fit. The
candidates receiving the highest number of votes, up to the number of Directors
to be elected, shall be elected.
Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of Shareholders, either annual or special, however
called and noticed, and wherever held, shall be as valid as a meeting duly held
after regular call and notice, if a quorum is present either in person or by
proxy, and if, either before or after the meeting, each person entitled to vote,
who was not present in person or by proxy, signs a written waiver of notice or a
consent to a holding of the meeting, or an approval of the minutes. The waiver
of notice or consent need not specify either -the business transacted or the
purpose of any annual or special meeting of Shareholders, except that, if action
is taken or proposed to be taken for approval of any of those matters specified
in the second paragraph of Section 4 of this Article II, the waiver of notice or
consent shall state the general nature of the proposal. All such waivers,
consents, or approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a waiver of
notice of that meeting, except when the person objects, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened, and except that attendance at a meeting is not a waiver of
any right to object to the consideration of matters required by law to be
included in the notice of the meeting, but not so included, if that objection is
expressly made at the meeting.
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action which may be taken at any annual or special meeting of Shareholders may
be taken without a meeting and without prior notice, if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to authorize or take that action at a meeting at which all shares entitled to
vote on that action were present and voted.
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In the case of election of Directors, such a written consent without a
meeting shall be effective only if signed by the holders of all outstanding
shares entitled to vote for the election of Directors; provided, however, that a
Director may be elected at any time to fill a vacancy on the Board of Directors
that has not been filled by the Directors, by the written consent of the holders
of a majority of the outstanding shares entitled to vote.
All such consents shall be filed with the Secretary of the Corporation
and shall be maintained in the corporate records. Any Shareholder giving a
written consent, or the Shareholder's proxy holder, or a transferee of the
shares or a personal representative of the Shareholder or their respective proxy
holders, may revoke the consent by a writing received by the Secretary of the
Corporation before written consents of the number of shares required to
authorize the proposed action have been filed with the Secretary.
If the consents of all Shareholders entitled to vote have not been
solicited in writing, and if the unanimous written consent of all such
Shareholders shall not have been received, the Secretary shall give prompt
notice of the corporate action approved by the Shareholders without a meeting.
This notice shall be given in the manner specified in Section 5 of this Article
II. In the case of approval of (i) contracts or transactions in which a Director
has a direct or indirect financial interest under Section 310 of the
Corporations Code of California, (ii) indemnification of agents of the
Corporation, under Section 317 of that Code, (iii) a reorganization of the
Corporation, under Section 1201 of that Code, or (iv) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares, under Section 2007 of that Code, notice of such approval shall be given
at least ten (10) days before the consummation of any action authorized by that
approval.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING
CONSENTS. For the purposes of determining the Shareholders entitled to notice of
any meeting or to vote or entitled to give consent to corporate action without a
meeting, the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty (60) days or less than ten (10) days before the date of
any such meeting or more than sixty (60) days before any such action without a
meeting, and in this event only Shareholders of record at the close of business
on the date so fixed are entitled to notice and to vote or to give consents, as
the case may be, notwithstanding any transfer of any shares on the books of the
Corporation after the record date, except as otherwise provided in the
California General Corporation Law.
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If the Board of Directors does not so fix a record date:
(a) The record date for determining Shareholders entitled to notice of
or to vote at a meeting of Shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
(b) The record date for determining Shareholders entitled to give
consent to corporate action in writing without a meeting, (i) when no prior
action by the Board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the Board has been taken, shall
be at the close of business on the day on which the Board adopts the resolution
relating to that action, or the sixtieth (60th) day before the date of such
other action, whichever is later.
Section 12. PROXIES.Every person entitled to vote for Directors or on any
other matter shall have the right to do so either in person or by one or more
agents authorized by a written proxy signed by, the person and filed with the
Secretary of the Corporation. A proxy shall be deemed signed if the
Shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the Shareholder or the
Shareholder's attorney in fact. I
A validly executed proxy that does not state that it is irrevocable
shall continue in full force and effect unless (i) revoked by the person
executing it, before the vote pursuant to that proxy, or by writing delivered to
the Corporation stating that the proxy is revoked, or by attendance at the
meeting and voting in person by the person executing the proxy or by a
subsequent proxy executed by the same person and presented at the meeting; or
(ii) revoked by written notice of the death or incapacity of the maker of that
proxy being received by the Corporation before the vote pursuant to that proxy
is counted; provided, however, that no proxy shall be valid after the expiration
of eleven (11) months from the date of the proxy, unless otherwise provided in
the proxy.
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The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of Sections 705(e) and 705(f) of
the Corporations Code of California.
Section 13. INSPECTORS OF ELECTION. Before any meeting of Shareholders, the
Board of Directors may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the Chairman of the meeting may, and on the request
of any Shareholder or a Shareholder's proxy shall, appoint inspectors of
election at the meeting. The number of inspectors shall he either one (1) or
three (3). If inspectors are to be appointed at a meeting on the request of one
or more Shareholders or proxies, the holders of a majority of shares or their
proxies present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. if any person appointed as inspector fails to
appear or fails or refuses to act, the Chairman of the meeting may, and upon the
request of any Shareholder or a Shareholder's proxy shall, appoint a person to
fill that vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum, and the
authenticity, validity, and effect of proxies;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in any way arising
in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all Shareholders.
ARTICLE III
DIRECTORS
Section 1. POWERS. Subject to the provisions of the California General
Corporation Law and any limitations in the is mailed, it shall be deposited in
the United States mail at least four (4) days before the time of meeting. In
case the notice is delivered personally, or by telephone or telegram, it shall
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Shareholders. The number of Directors may be changed by a duly adopted amendment
to the Articles of Incorporation or by an amendment to this Bylaw duly adopted
by the unanimous vote or written consent of holders of all of the outstanding
shares entitled to vote. No amendment may change the stated maximum number of
authorized Directors to a number other than three (3) or five (5) .
Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the Shareholders to hold office until the next
annual meeting. Each Director, including a Director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
No reduction of the authorized number of Directors shall have the
effect of removing any Director before that Director's term of office expires.
Section 4. VACANCIES. A vacancy or vacancies in the Board of Directors
shall be deemed to exist in the event of the death, resignation, or removal of
any Director,.or if the Board of Directors by resolution declares vacant
the-office of a Director who has been declared of unsound mind by an order of
court or convicted of a felony, or if the authorized number of Directors is
increased, or if the Shareholders fail at anv meeting of Shareholders at which
any Director or Directors are elected to elect the number of Directors to be
voted for at that meeting.
Any Director may resign effective on giving written notice to the
Chairman of the Board, the President, the Secretary, or the Board of Directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a Director is effective at a future time, the
Board of Directors may elect a successor to take office when the resignation
becomes effective.
Vacancies in the Board of Directors may be filled by a majority of the
remaining Directors, whether or not less than a quorum, or by a sole remaining
Director, except that a vacancy created by the removal of a Director by the vote
or written consent of the Shareholders or by court order may be filled only by
the vote of a majority of the shares entitled to vote represented at a duly held
meeting at which a quorum is present, or by the unanimous written consent of the
holders of the outstanding shares entitled to vote. The Shareholders may elect a
Director or Directors at any time to fill any vacancy or vacancies not filled by
the Directors, but any such election by written consent shall require the
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consent of a majority of the outstanding shares entitled to vote, except that
filling a vacancy created by removal of a Director shall require the written
consent of the holders of all outstanding shares entitled to vote.
Each Director so elected shall hold office until the next annual
meeting of the Shareholders and until a successor has been elected and
qualified.
Section 5. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. Regular meetings of
the Board of Directors may be held at any place within or outside the State of
California that has been designated from time to time by the Board. In the
absence of such a designation, regular meetings shall be held at the principal
executive office of the Corporation. Special meetings of the Board shall be held
at any place within or outside the State of California that has been designated
in the notice of the meeting or, if not stated in the notice or if there is no
notice, at the principal executive office of the Corporation. Any meeting,
regular or special, may be held by conference telephone or similar communication
equipment, as long as all Directors participating in the meeting can hear
one-another, and all such Directors shall be deemed to be present-in person at
the meetincr.
Section 6. ANNUAL MEETING. Immediately following each annual meeting of
Shareholders, the Board of Directors shall hold a regular meeting at the place
that the annual meeting of Shareholders was held or at any other place that
shall have been designated by the Board of Directors, for the purpose of
organization, any desired election of officers, and the transaction of other
business. Notice of this meeting shall not be required.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the Board of
Directors shall be held without call at such time as shall from time to time be
fixed by the Board of Directors. Such regular meetings may be held without
notice.
Section 8. SPECIAL MEETINGS. Special meetings of the Board of Directors for
any purpose or purposes may be called at any time by the Chairman of the Board,
the President, any Vice President, the Secretary, or any two Directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each Director or sent by first-class mail or
telegram, charges prepaid, addressed to each Director at the Director's address
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as it is shown on the records of the Corporation. In case the notice be
delivered personally or by telephone or to the telegraph company at least
forty-eight (48) hours before the time of the meeting. Any oral notice given
personally or by telephone may be communicated either to the Director or to a
person at the office of the Director whom the person giving the notice has
reason to believe will promptly communicate it to the Director. The notice need
not specify the purpose of the meeting, nor need it specify the place if the
meeting is to be held at the principal executive office of the Corporation.
Section 9. QUORUM. A majority of the authorized number of Directors shall
constitute a quorum for the transaction of business, except to adjourn as
provided in Section 11 of this Article III. Every act or decision done or made
by a majority of the Directors present at a meeting duly held at which a quorum
is present shall be regarded as the act of the Board of Directors, subject to
the provisions of Section 310 of the Corporations Code of California (as to
approval of contracts or transactions in which a Director has a direct or.
indirect material financial interest) , Section 311 of that Code (as to
appointment of committees), and Section 317(e) of that Code (as to
indemnification of Directors) . A meeting at which a quorum is initially present
may continue to transact business notwithstanding the withdrawal of Directors,
if any action taken is approved by at least a majority of the required quorum
for that meeting.
Section 10. WAIVER OF - NOTICE. The transactions of any meeting of the
Board of Directors, however called and noticed or wherever held, shall be as
valid as though had at a meeting duly held after regular call and notice if a
quorum is present and if each Director (a) has received notice of the meeting,
(b) attends the meeting without protesting before or at the beginning of the
meeting, the lack of notice to such Director, or (c) before or after the meeting
signs a waiver of notice and consent to holding the meeting, or an approval of
the minutes of the meeting. Any such waiver of notice or consent need not
specify the purpose of the meeting. All such waivers, consents, and approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 11. ADJOURNMENT. A majority of the Directors present, whether or
not constituting a quorum, may adjourn any meeting to another time and place.
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Section 12. NOTICE OF ADJOURNMENT. Notice of the time and place of holding
an adjourned meeting need not be given, unless the meeting is adjourned for more
than twenty-four hours, in which case notice of the time and place shall be
aiven before the time of the adjourned meeting, in the manner specified in
Section 8 of this Article III, to the Directors who were not present at the time
of the adjournment.
Section 13. ACTION WITHOUT MEETING. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting, if all members
of the Board shall individually or collectively consent in writing to that
action. Such action bv written consent shall have the same force and effect as a
unanimous vote of the Board of Directors. Such written consent or consents shall
be filed with the minutes of the proceedings of the Board.
Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors and members of
committees may receive such compensation, if any, for their services, and such
reimbursement of expenses, as mav be fixed or determined by resolution of the
Board of Directors. This Section 14 shall not be construed to preclude any
Director from serving the Corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation for those services.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES bF DIRECTORS. The Board of Directors may, by
resolution adopted by a majority of the authorized number of Directors,
designate one or more committees, each consisting of two or more Directors, to
serve at the pleasure of the Board. The Board may designate one or more
Directors as alternate members of any committee, who may replace any absent
member at any meeting of the committee. Any committee, to the extent provided in
the resolution of the Board, shall have all the authority of the Board, except
with respect to:
(a) The approval of any action which, under the General Corporation
Law of California, also requires shareholders' approval or approval of the
outstanding shares;
(b) The filling Of Vacancies on the Board of Directors or in any
committee;
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(c) The fixing of compensation of the Directors for serving on the
Board or on any committee;
(d) The amendment or repeal of Bylaws or the adoption of new Bylaws;
(e) The amendment or repeal of any resolution of the Board of
Directors which by its express terms is not so amendable or repealable;
(f) A distribution to the Shareholders of the Corporation, except at a
rate or in a periodic amount or within a price range determined by the Board of
Directors; or
(g) The appointment of any other committees of the Board of Directors
or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article III of these Bylaws, Sections 5 (Place of Meetings), 7
(Regular Meetings), 8 (Special Meetings and Notice), 9 (Quorum), 10 (Waiver of
Notice), 11 (Adjournment), 12 (Notice of Adjournment), and 13 (Action Without
Meeting), with such changes in the context of those Bylaws as are necessary to
substitute the committee and its members for the Board of Directors and its
members, except that the time of regular meetings of committees may be
determined either by resolution of the Board of Directors or by resolution of
the committee; special meetings of committees may also be called by resolution
of the Board of Directors; and notice of special meetings of committees shall
also be given to all alternate members, who shall have the right to attend all
meetings of the committee. The Board of Directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
Bylaws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the Corporation shall be a President,
a Secretary, and a Chief Financial Officer. The Corporation may also have, at
the discretion of the Board of Directors, a Chairman of the Board, one or more
Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 of this Article V. Any number of offices maybe held by
the same person.
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Section 2. OFFICERS. The officers of the Corporation, except officers as
may be appointed in accordance with the proved Is of Section 3 or Section 5 of
this Article V, shall be chosen by the Board of Directors, and each shall serve
at the pleasure of the Board, subject to the rights, if any, of an officer under
any contract of employment.
Section 3. SUBORDINATE OFFICERS. The Board of Directors may appoint, and
may empower the President to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in the Bylaws or as the
Board of Directors may from time to time determine.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if
any, of an officer under any contract of employment, any officer may be removed,
either with or without cause, by the Board of Directors, at any regular or
special meeting of the Board, or, except in case of an officer chosen by the
Board of Directors, by any officer upon whom such power of removal may be
conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the
Corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the Corporation under any contract to which the officer is a
party.
Section 5. VACANCIES IN OFFICES. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled in
the manner prescribed in these Bylaws for regular appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such an
officer is elected, shall, if present, preside at meetings of the Board of
Directors and exercise and perform such other powers and duties as may be from
time to time assigned to him by the Board of Directors or prescribed by these
Bylaws. If there is no President, the Chairman of the Board shall in addition be
the General Manager and Chief Executive Officer of the Corporation and shall
have the powers and duties prescribed in Section 7 of this Article V.
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Section 7. PRESIDENT. Subject to such powers, if any, as may be given by
the Bylaws or Board of Directors to the Chairman of the Board, if there is such
an officer, the President shall be the General Manager and Chief Executive
Officer of the Corporation and shall, subject to the control of the Board of
Directors, have general supervision, direction, and control of the business and
the officers of the Corporation. He shall preside at all meetings of the
Shareholders and, in the absence of the Chairman of the Board, or if there is
none, sy all meetings of the Board of Directors. He shall have the general
powers and duties of management usually vested in the office of president of a
Corporation, and shall have such other powers and duties as may be prescribed by
the Board of Directors or the Bylaws.
Section 8. VICE PRESIDENTS. In the absence or disability of the President,
the Vice Presidents, if any, in order of their rank as fixed by the Board of
Directors or, if not ranked, a Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
President. The Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of, Directors or the Bylaws, and the President, or the Chairman of, the
Board if there is no President.
Section 9. SECRETARY. The Secretary shall keep or cause to be kept, at the
principal executive office or such other place as the Board of Directors may
direct, a book of minutes of all meetings and actions of Directors, committees
of Directors, and Shareholders, with the time and place of holding, whether
regular or special, -and, if special, how authorized, the notice given, the
names of those present at Directors' meetings or committee meetings, the number
of shares present or represented at Shareholders' meetings, and the proceedings.
The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the Corporation's transfer agent or
registrar, as determined by resolution of the Board of Directors, a record of
Shareholders, or a duplicate record of Shareholders, showing the names of all
Shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.
The Secretary or Assistant Secretary, or if they are absent or unable
to act or refuse to act, any other officer of the Corporation, shall give, or
cause to be given, notice of all meetings of the Shareholders, of the Board of
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Directors, and of committees of the Board of Directors, required by the Bylaws
or by law to be given. The Secretary shall keep the seal of the Corporation if
one is adopted, in safe custody, and shall have such other powers and perform
such other duties as may be prescribed by the Board of Directors or by the
Bylaws.
Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep
and maintain, or cause to be kept and maintained, adequate and correct books and
records of accounts of the properties and business transactions of the
Corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings, and shares. The books
of account shall at all reasonable times be open to inspection by any Director.
The Chief Financial Officer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositories as may be designated by the Board of Directors. The Chief Financial
Officer shall disburse the funds of the Corporation as may be ordered by the
Board of Directors, shall render to the President and Directors, whenever they
request it, an account of all of his transactions as Chief Financial Officer and
of the financial condition of the Corporation, and shall have other powers and
perform such other duties as may be prescribed by the Board of Directors or the
Bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS, AND EXPENSES. For the purposes of this
Article, "agent" means any person who is or was a Director, officer, employee,
or other agent of this Corporation, or is or was serving at the request of this
Corporation as a Director, officer, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust or other enterprise, or
was a Director, officer, employee, or agent of a foreign or domestic corporation
that was a predecessor corporation of this Corporation or of another enterprise
at the request of such predecessor corporation; "proceeding" means any
threatened, pending, or completed action or proceeding, whether civil, criminal,
administrative, or investigative; and "expenses" includes, without limitation,
attorneys' fees and any expenses of establishing a right to indemnification
under Section 4 or Section 5(c) of this Article.
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Section 2. ACTIONS OTHER THAN BY THE CORPORATION. This Corporation shall
have power to indemnify any person who was or is a party, or is threatened to be
made a party, to any proceeding (other than an action by or in the right of this
Corporation to procure a judgment in its favor) by reason of the fact that such
person is or was an agent of this Corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with such proceeding if that person acted in good faith and in a
manner that person reasonably believed to be in the best interests of this
Corporation and, in the case of a criminal proceeding, had no reasonable cause
to believe the conduct of that person was unlawful. The termination of any
proceeding by judgment, order, settlement, conviction, or upon a plea of note
contendere or its equivalent shall not, of itself, create a presumption that the
person did not act in good faith and in a manner that the person reasonably
believed to be in the best interests of this Corporation or that the person had
reasonable cause to believe that the person's conduct was unlawful.
Section 3. ACTIONS BY THE CORPORATION. This Corporation shall have power to
indemnify any person who was or is a party, or is threatened to be made a party,
to any threatened, pending, or completed action by or in the right of this
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was an agent of this Corporation, against expenses actually and
reasonably incurred by that person in connection with the defense or settlement
of that action if that person acted in good faith, in a manner that person
believed to be in the best interests of this Corporation and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like position
would use under similar circumstances. No indemnification shall be made under
this Section 3:
(a) With respect to any claim, issue, or matter as to which that
person shall have been adjudged to be liable to this Corporation in the
performance of that person's duty to this Corporation, unless and only to the
extent that the court in which that proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, that person
is fairly and reasonably entitled to indemnity for the expenses which the court
shall determine;
(b) Of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval; or
(c) Of expenses incurred in defending a threatened or pending action
that is settled or otherwise disposed of without court approval.
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Section 4. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of this
Corporation has been successful on the merits in defense of any proceeding
referred to in Sections 2 and 3 of this Article, or in defense of any claim,
issue, or matter -'%'-,herein, the agent shall be indemnified against expenses
actually and reasonably incurred by the agent in connection therewith.
Section 5. REQUIRED APPROVAL. Except as provided in Section 4 of this
Article, any indemnification under this Article shall be made by this
Corporation only if authorized in the specific case on a determination that
indemnification of the agent is proper in the circumstances because the agent
has met the applicable standard of conduct set forth in Sections 2 or 3 of this
Article by:
(a) A majority vote of a quorum consisting of Directors who are not
parties to the proceeding;
(b) Approval by the affirmative vote of a majority of the shares of
this Corporation entitled to vote represented at a duly held meeting at which a
quorum is present-or by the written consent of holders of a majority of the
outstanding shares entitled to vote. For this purpose, the shares owned by the
person to be indemnified shall not be considered outstanding or entitled to vote
thereon; or
(c) The court in which the proceeding is or was pending, on
application made by this Corporation or the agent or the attorney or other
person rendering services in connection with the defense, whether or not such
application by the agent, attorney, or other person is opposed by this
Corporation.
Section 6. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this Corporation before the final disposition of
the proceeding on receipt of an undertaking by or on behalf of the agent to
repay the amount of the advance unless it shall be determined ultimately that
the agent is entitled to be indemnified as authorized in this Article.
Section 7. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than Directors
and officers of this Corporation or any subsidiary hereof may be entitled by
contract or otherwise.
Section 8. LIMITATIONS. No indemnification or advance shall be made under
this Article, except as provided in Section 4 or Section 5(c), in any
circumstance where it appears:
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(a) That it would be inconsistent with a provision of the Articles, a
resolution of the Shareholders, or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceeding in which the
expenses were incurred or other amounts were paid, which prohibits or otherwise
limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 9. INSURANCE. Upon and in the event of a determination by the Board
of Directors of this Corporation to purchase such insurance, this Corporation
shall purchase and maintain insurance on behalf of any agent of the corporation
against any liability asserted against or incurred by the agent in such capacity
or arising out of the agent's status as such whether or not this Corporation
would have the power to indemnify the agent against that liability under the
provisions of this Section.
Section 10. FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN. This Article
does not apply to any proceeding against any trustee, investment manager, or
other fiduciary of an employee benefit plan in that person's capacity as such,
even though that person may also be an agent of the Corporation as defined in
Section 1 of this Article. This Corporation shall have the power to indemnify,
and to purchase and maintain insurance on behalf of, any such trustee,
investment manager, or other fiduciary of any pension, profit-sharing, share
bonus, share purchase, share option, savings, thrift, and other retirement,
incentive, and benefit plan, trust, and other provision for any or all of the
Directors, officers, and employees of the Corporation or any of its subsidiary
or affiliated Corporations, and to indemnify and purchase and maintain insurance
on behalf of any fiduciary of such plans, trusts, or provisions. Nothing
contained in this Article shall limit any right to indemnification to which such
a trustee, investment manager, or other fiduciary may be entitled by contract or
otherwise, which shall be enforceable to the extent permitted by applicable law
other than this Article.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF RECORD OF SHAREHOLDERS. The
Corporation shall keep at its principal executive office, or at the office of
its transfer agent or registrar, if either be appointed and as determined by
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resolution of the Board of Directors, a record of its Shareholders, giving the
names and addresses of all Shareholders and the number and class of shares held
by each Shareholder.
A Shareholder or Shareholders of the Corporation holding at least five
(5%) percent in the aggregate of the outstanding voting shares of the
Corporation may: (i) inspect and copy the records of Shareholders' names and
addresses and shareholdings during usual business hours on five days' prior
written demand on the Corporation, and (ii) obtain from the transfer agent of
the Corporation, on written demand and on the tender of such transfer agent's
usual charges for such list, a list of the Shareholders' names and addresses,
who are entitled to vote for the election of Directors, and their shareholdings,
as of the most recent record date for which that list has been compiled or as of
a date specified by the Shareholder after the date of demand. This list shall be
made available to any such Shareholder or Shareholder's transfer agent on or
before the later of five (5) days after the demand is received or the date
specified in the demand as the date as of which the list is to be compiled. The
record of Shareholders shall also be open to inspection on the written demand of
any Shareholder or holder of a voting trust certificate, at any time during
usual business hours, for a purpose reasonably related to the holder's interests
as a Shareholder or as the holder of a voting trust certificate. Any inspection
and copying under this Section 1 may be made in person or by an agent or
attorney of the Shareholder or holder of a voting trust certificate making the
demand.
Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The Corporation shall keep
at its principal executive office, or if its principal executive office is not
in the State of California, at its principal business office in this state, the
original or a copy of the Bylaws as amended to date, which shall be open to
inspection by the Shareholders at all reasonable times during office hours. If
the principal executive office of the Corporation is outside the State of
California and the Corporation has no principal business office in this state,
the Secretary shall, upon the written request of any Shareholder, furnish to
that Shareholder a copy of the Bylaws as amended to date.
Section 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The
accounting books and records and minutes of proceedings of the Shareholders and
the Board of Directors and any committee or committees of the Board of Directors
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shall be kept at such place or places designated by; the Board of Directors, or,
in the absence of such designation, at the principal executive office of the
Corporation. The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other form capable of
being converted into written form. The minutes and accounting books and records
shall be open to inspection upon the written demand of any Shareholder or holder
of a voting trust certificate, at any reasonable time during usual business
hours, for a purpose reasonably related to the holder's interests as a
Shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney, and shall include the right to
copy and make extracts. These rights of inspection shall extend to the records
of each subsidiary Corporation of the Corporation.
Section 4. INSPECTION BY DIRECTORS. Every Director shall have the absolute
right at any reasonable time to inspect all books, records, and documents of
every kind and the physical properties of the Corporation and each of its
subsidiary Corporations. This inspection by a Director may be made in person or
by an agent or attorney and the right of inspection includes the right to copy
and make extracts of documents.
Section 5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to Shareholders
referred to in Section 1501 of the California General Corporation Law is
expressly dispensed with, but nothing herein shall be interpreted as prohibiting
the Board of Directors from issuing annual or other periodic reports to the
Shareholders of the Corporation as they consider appropriate.
Section 6. FINANCIAL STATEMENTS. A copy of any annual financial statement
and any income statement of the Corporation for each quarterly period of each
fiscal year, and any accompanying balance sheet of the Corporation as of the end
of each such period, that has been prepared by the Corporation shall be kept on
file in the principal executive office of the Corporation for twelve (12) months
and each such statement shall be exhibited at all reasonable times to any
Shareholder demanding an examination of any such statement or a copy shall be
mailed to any such Shareholder.
If a Shareholder or Shareholders of the Corporation holding at least
five (5%) percent of the outstanding shares of any class of stock makes a
written request to the Corporation for an income statement of the Corporation
for the three-month, six-month or nine-month period of the current fiscal year
ended more than thirty (30) days before the date of the request, and a balance
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sheet of the Corporation as of the end of that period, the Chief Financial
Officer shall cause that statement to be prepared, if not already prepared, and
shall deliver personally or mail that statement or statements to the person
making the request within thirty (30) days after the receipt of the request. If
the Corporation has not sent the Shareholders its annual report for the last
fiscal year, this report shall likewise be delivered or mailed to the
Shareholder or Shareholders within thirty (30) days after the request.
The Corporation shall also, on the written request of any Shareholder,
mail to the Shareholder a copy of the last annual, semi-annual, or quarterly
income statement which it has prepared, and a balance sheet as of the end of
that period.
The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the Corporation or the certificate of an authorized
officer of the Corporation that the financial statements were prepared without
audit from the books and records of the Corporation.
Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION. The Corporation shall,
each year during the calendar month in which its Articles of Incorporation
originally were filed with the California Secretary of State, or during the
preceding five (5) calendar months, file with the Secretary of State, on the
prescribed form, a statement setting forth the authorized number of Directors,
the names and complete business or residence addresses of all incumbent
Directors, the names and complete business or residence addresses of the Chief
Executive Officer, secretary, and Chief Financial Officer, the street address of
its principal executive office or principal business office in this state, and
the general type of business constituting the principal business activity of the
Corporation, together with a designation of the agent of the Corporation for the
purpose of service of process, all in compliance with Section 1502 of the
Corporations Code of California.
ARTICLE VIII
GENERAL CORPORATE MATTERS
Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For
purposes of determining the Shareholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action (other than action by
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Shareholders by written consent without a meeting), the Board of Directors may
fix, in advance, a record date, which shall not be more than sixty (60) nor less
than ten (10) days before any such action, and in that case only Shareholders of
record on the date so fixed are entitled to receive the dividend, distribution
or allotment of rights or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the Corporation after
the record date so fixed, except as otherwise provided in the California General
Corporation Law.
If the Board of Directors does not so fix a record date, the record
date for determining Shareholders for any such purpose shall be at the close of
business on the day on which the Board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
Section 2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS. All checks, drafts,
or other orders for payment of money, notes, or other evidences of indebtedness,
issued in the name of or payable to the Corporation, shall be signed or endorsed
by such person or persons and in such manner as, from time to time, shall be
determined by resolution of the Board of Directors.
Section 3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of
Directors, except as otherwise provided in these Bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation, and this authority
may be general or confined to specific instances; and, unless so authorized or
ratified by the Board of Directors or within the agency power of an officer, no
officer, agent, or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 4. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of the capital stock of the Corporation shall be issued to each
Shareholder when any of these shares are fully paid, and the Board of Directors
may authorize the issuance of certificates or shares as partly paid provided
that these certificates shall state the amount of the consideration to be paid
for them and the amount paid. All certificates shall be signed in the name of
the corporation by the Chairman of the board or Vice Chairman of the Board or
the President or Vice President and by the Chief Financial Officer or an
Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the
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number of shares and the class or series of shares owned by the Shareholder.
None of the signatures on the certificate may be facsimile. In case any officer,
transfer agent, or registrar who has signed a certificate shall have ceased to
be that officer, transfer agent, or registrar before that certificate is issued,
it may be issued by the Corporation with the same effect as if that person were
an officer, transfer agent, or registrar at the date of issue.
Section 5. LOST CERTIFICATES. Except as provided in this Section 5, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is surrendered to the Corporation and cancelled at the same time. The
Board of Directors may, in case any share certificate or certificate for any
other security is lost, stolen, or destroyed, authorize the issuance of a
replacement certificate on such terms and conditions as the Board may require,
including provision for indemnification of the Corporation secured by a bond or
other adequate security sufficient to protect the Corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft, or destruction of the certificate or the issuance of
the replacement certificate.
Section 6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of
the Board, the President, or any Vice President, or any other person authorized
by resolution of the Board of Directors or by any of the foregoing designated
officers, is authorized to vote on behalf of the Corporation any and all shares
of any other corporation or corporations, foreign or domestic, standing in the
name of the Corporation. The authority granted to these officers to vote or
represent on behalf of the Corporation any and all shares held by the
Corporation in any other corporation or corporations may be exercised by any of
these officers in person or by any person authorized to do so by a proxy duly
executed by these officers.
Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in the
California General Corporation Law shall govern the construction of these
Bylaws. Without limiting the generality of this provision, the singular number
includes the plural, the plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
Section 8. REIMBURSEMENT. if all or part of the salary or any other
compensation paid to a Shareholder-employee or Shareholder-officer or
Shareholder-Director of the Corporation is finally determined not to, be
allowable as a federal or state income tax deduction to the Corporation then
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said Shareholder shall repay to the Corporation the amount disallowed. The Board
of Directors shall enforce repayment of each such amount disallowed.
Section 9. COVENANT NOT TO COMPETE. No Shareholder shall, directly or
indirectly, whether as a partner, employee, creditor, shareholder, or otherwise,
promote, participate, or engage in any activity or other business competitive
with this Corporation's business. In the event any Shareholder desires to engage
in any such activity, said Shareholder may sell, transfer or return such shares
to the Corporation or other Shareholders of the Corporation in accordance with
Article X of these Bylaws, at which time this Covenant Not to Compete will be
erased with regard to such Shareholder.
ARTICLE ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. New Bylaws may be adopted or these
Bylaws may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the Articles of Incorporation of the Corporation set forth the number of
authorized Directors of the Corporation, the authorized number of Directors may
be changed only by an amendment of the Articles of Incorporation.
Section 2. AMENDMENT BY DIRECTORS. Subject to the rights of the
Shareholders as provided in Section 1 of this Article IX, to adopt, amend, or
repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board of
Directors, provided, however, that the Board of Directors may adopt a Bylaw or
amendment of a Bylaw changing the authorized number of Directors only for the
purpose of fixing the exact number of Directors within the limits specified in
the Articles of Incorporation or in Section 2 of Article III of these Bylaws.
(a) The Board of Directors may adopt a Bylaw or amendment of a Bylaw
changing the authorized number of Directors only for the purpose of fixing the
exact number of Directors within the range of numbers authorized in the Articles
of Incorporation or in Section 2 of Article III of these Bylaws;
(b) The Board of Directors may not alter or repeal this Section 2 of
this Article IX.
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ARTICLE X
RESTRICTIONS ON TRANSFER OF SHARES
Before there can be a valid sale or transfer of any of the shares of
the Corporation by any holder thereof, he shall first offer the shares to the
other Shareholders and then to the Corporation in the following manner:
(1) Such offering Shareholder shall deliver to the Secretary of
the Corporation, a copy of the written agreement concerning the proposed sale,
whether the same is executed or not, and if not in writing, then a written
notice identifying the proposed purchaser(s) and stating the price, terms and
conditions of such proposed sale or transfer, the number of shares to be sold or
transferred, and his intention so to sell or transfer such shares. Within thirty
(30) days thereafter, the Secretary of the Corporation shall, mail or deliver to
each of the other Shareholders a notice setting forth the particulars concerning
such shares described in the notice received from the offering Shareholder. The
other Shareholders shall have the right to purchase all of the shares specified
in such Secretary's notice by delivering to the Secretary by mail or otherwise a
written offer or offers to purchase all or any specified number of such shares
upon the terms so described in the Secretary's notice if such offer or offers
are so delivered to the Secretary within thirty (30) days after mailing or
delivering such Secretary's notice to such other Shareholders. If the total
number of shares specified in such offers so received within such period by the
Secretary exceeds the number of shares referred to in such Secretary's notice,
each offering Shareholder shall be entitled to purchase such proportion of the
shares referred to in such notice to the Secretary, as the number of shares of
this Corporation which he holds bears to the total number of shares held by all
such Shareholders desiring to purchase the shares referred to in such notice to
the Secretary.
(2) If all of the shares referred to in such notice to the
Secretary are not disposed of under such apportionment, each Shareholder
desiring to purchase shares in a number in excess of this proportionate share,
as provided above, shall be entitled to purchase such proportion of those shares
which remain thus undisposed of, as the total number of shares which he holds
bears to the total number of shares held by all of the Shareholders desiring to
purchase shares in excess of those to which they are entitled under such
apportionment.
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(3) If all of the shares referred to in such notice to the
Secretary are not disposed of in accordance with the foregoing provisions, the
Corporation shall have the right to purchase all of such shares so offered at
the price and upon the terms and conditions stated in such notice. Should the
Corporation fail to purchase all of such shares at the expiration of said time
period, within thirty (30) days thereafter the restriction on transfer of shares
shall no longer be effective with respect to such transaction and the
Shareholder desiring to sell or transfer his shares may dispose of all shares of
stock referred to in such notice to the Secretary to the person or persons set
forth in the notice; provided, however, that he shall not sell or transfer such
shares at a lower price or on terms more favorable to the purchaser or
transferee than those specified in such notice to the Secretary.
(4) Any sale or transfer or purported sale or transfer of the
shares of the Corporation shall be null and void unless the terms, conditions,
and provisions of this Article X are followed. Following any sale or transfer as
provided in this Article, the shares held by the purchaser or transferee shall
be subject to the restrictions set forth in this Article X.
(5) The restrictions on transfer of shares as provided herein may
be waived as to a particular transaction by the filing of a written waiver of
such restriction signed by all the Shareholders of the Corporation with the
Secretary 0 f the Corporation. Such waiver shall designate the particular
transaction as to which such waiver shall be effective.
(6) Notwithstanding the provisions of Article IX of these Bylaws,
this Article X may be amended or repealed only by the vote or written assent of
Shareholders holding 66 2/3 percent of the outstanding shares entitled to vote.
(7) Regarding this Article X and all provisions, terms,
subdivisions, paragraphs and subparagraphs thereof, the terms "sale" and/or
"Transfer" shall mean any event, transaction or circumstances whatsoever, as a
result of which, or in connection with, any legal, equitable or security
interest in any stock in SHR CORPORATION is, or is claimed to be, acquired or
owned by a person who previously or otherwise did not acquire or own that
interest. A "sale" and/or "transfer" for the purposes of this entire Article X
and any provision or subpart hereof may occur either voluntarily or
involuntarily or by operation of law. The meaning of the terms "sale" and/or
"transfer" includes, by way of illustration, but is not limited to any of the
following: ... any sale or purchase; any assignment, however evidenced or done;
any change of possession or endorsement or assignment of certificate; any
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attachment, execution or other levy; any process or order of any court, judge,
referee, receiver, trustee, commissioner, marshal, or other officer or official;
and commencement by or against a Shareholder of any proceedings under any law
relating to bankruptcy or insolvency; the making of an assignment for the
benefit of creditors or appointment of a creditor's committee; appointment or a
receiver, trustee, guardian or conservator; death; creation or termination of a
joint tenancy or other co-ownership; as between spouses, conversion in any
manner to or from community property ownership if the result is the right to
vote upon any shares by any person who prior to such conversion did not have the
right to vote upon those shares; contribution to or distribution from any
partnership, corporation or other party; transfer to or out of any trust or
estate; distribution by any trust or estate; any order or judgment of specific
performance or other specific release; any gift; any bequest by death.
Notwithstanding anything within Article X or any part thereof to the
contrary, the terms "sale" and/or "transfer" shall NOT include the sale,
assignment, gift, conveyance, bequest (or any transfer resulting from death) of
any SHR CORPORATION stock from a Shareholder of SHR CORPORATION to another
person who previously and concurrently owned and acquired other stock in SHR
CORPORATION. Thus, by way of illustration, but not limited to this example, the
transfer or sale of shares by one Shareholder to another Shareholder shall be
exempt from all provisions and restrictions contained wihtin this Article X.
Further, notwithstanding anything within Article X or any part thereof
to the contrary, the terms "sale" and/or "transfer" shall also NOT include the
sale, assignment, gift, conveyance, bequest (or any transfer resulting from
death) of any SHR CORPORATION stock from a Shareholder of SHR CORPORATION to any
spouse or lineal descendant of any Shareholder of SHR CORPORATION.
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CERTIFICATE OF SECRETARY
I, the undersigned, do hereby certify:
(1) That I am the duly elected and acting Secretary of SHR
CORPORATION, a California Corporation; and
(2) That the foregoing Bylaws, comprising twenty nine (29) pages,
constitute the Bylaws of such Corporation as duly adopted by action of the
incorporator of the Corporation duly taken on July 1, 1988.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of such Corporation this 1st day of July, 1988.
/s/ Scott M. Sakata
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SCOTT M. SAKATA
Secretary
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