EXHIBIT 3.4
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TABLE OF CONTENTS
TO
BYLAWS
ARTICLES TITLE AND SECTION
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I OFFICES
1.01 Principal Office
1.02 Other Offices
II MEETINGS OF SHAREHOLDERS
2.01 Place of Meetings
2.02 Annual Meetings
2.03 Special Meetings
2.04 Notice of Shareholders' Meetings
2.05 Manner of Giving Notice;
Affidavit of Notice
2.06 Quorum
2.07 Adjourned Meeting and Notice
Thereof
2.08 Voting
2.09 Waiver of Notice or consent by
Absent Shareholders
2.10 Shareholder Action by Written
Consent Without a Meeting
2.11 Record Date for Shareholder Notice,
Voting, and Giving Consents
2.12 Proxies
2.13 Inspectors of Election
III DIRECTORS
3.01 Powers
3.02 Number and Qualification of Directors
3.03 Election and Term of Office of Directors
3.04 Vacancies
3.05 Place of Meetings and Telephonic
Meetings
3.06 Annual Meetings
3.07 Other Regular Meetings
3.08 Special Meetings
3.09 Quorum
3.10 Waiver of Notice
3.11 Adjournment
3.12 Notice of Adjournment
3.13 Action Without Meeting
3.14 Fees and Compensation of Directors
IV COMMITTEES
4.01 Committees of Directors
4.02 Meetings and Action of Committees
V OFFICERS
5.01 Officers
5.02 Election of Officers
5.03 Subordinate Officers, Etc.
5.04 Removal and Resignation of Officers
5.05 Vacancies in Offices
5.06 Chairman of the Board
5.07 President
5.08 Vice Presidents
5.09 Secretary
5.10 Chief Financial Officer
VI INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND OTHER AGENTS
6.01 Agents, Proceedings and Expenses
6.02 Actions Other than by the Corporation
6.03 Actions by the Corporation
6.04 Successful Defense by Agent
6.05 Required Approval
6.06 Advance of Expenses
6.07 Other Contractual Rights
6.08 Limitations
6.09 Insurance
6.10 Fiduciaries of Corporate Employee
Benefit Plan
6.11 Amendment to California Law
VII CORPORATE LOANS AND GUARANTEES TO
DIRECTORS, OFFICERS AND EMPLOYEES
7.01 Limitations on Corporate Loans
and Guarantees
7.02 Permissible Corporate Loans
and Guarantees
VIII GENERAL CORPORATE MATTERS
8.01 Record Date for Purposes Other than
Notice and Voting
8.02 Checks, Drafts, Evidence of
Indebtedness
8.03 Corporate Contracts and Instruments;
How Executed
8.04 Certificate for Shares
8.05 Lost Certificates
8.06 Representation of Shares of Other
Corporations
8.07 Construction and Definitions
IX RECORDS AND REPORTS
9.01 Maintenance and Inspection of Share
Register
9.02 Maintenance and Inspection of Bylaws
9.03 Maintenance and Inspection of Other
Corporate Records
9.04 Inspection by Directors
9.05 Annual Report to Shareholders
9.06 Financial Statements
9.07 Annual Statement of General Information
X OWNERSHIP AND TRANSFER OF SHARES
10.01 Stock
10.02 Price or Consideration for Shares
10.03 Grant of Preemptive Rights
10.04 Restriction on Transfer of Shares
XI AMENDMENTS
11.01 Amendment by Shareholders
11.02 Amendment by Directors
BYLAWS
OF
ISE LABS, INC.
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ARTICLE I
OFFICES
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Section 1.01 Principal Offices. The Board of Directors shall fix the
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location of the principal executive of the corporation at any place within or
outside the State of California. If the principal executive office is located
outside this state, and the corporation has one or more business offices in this
state, the Board of Directors shall fix and designate a principal business
office in the State of California.
Section 1.02 Other Offices. The officers or the Board of Directors may at
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any time establish branch or subordinate offices at any place or places where
the corporation is qualified to do business, and may change the location of any
office of the corporation.
ARTICLE II
MEETINGS OF SHAREHOLDERS
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Section 2.01 Place of Meetings. Meetings of shareholders shall be held at
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any place within or outside the State of California designated by the Board of
Directors upon proper notice. In the absence of any such designation,
shareholders' meetings shall be held at the principal executive office of the
corporation.
Section 2.02 Annual Meetings. Unless held at a time and date designated
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each year by the Board of Directors in accordance with applicable law, an annual
meeting of shareholders shall be held on the ________ of each year at
_____________; provided, however, that should such day fall
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upon a legal holiday, then the annual meeting of shareholders shall be held at
the same time and place on the next day thereafter ensuing which is a full
business day. At the annual meeting, Directors shall be elected and any other
proper business may be transacted.
Section 2.03 Special Meetings.
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(a) 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
by one or more shareholders holding shares which, in the aggregate, entitle them
to cast not less than ten percent (10%) of the votes at any such meeting.
(b) 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, and the Secretary of the corporation. The secretary upon
receiving the request shall cause notice to be promptly given to the
shareholders entitled to vote, in accordance with the provisions of Sections
2.01, 2.04 and 2.05 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 Section 2.03 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 2.04 Notice of Shareholders' Meetings.
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(a) All notices of meetings of shareholders shall be sent or otherwise
given in accordance with Section 2.05 not less than ten (10) nor more than sixty
(60) days before the date of the meeting being noticed. 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, or the
other
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person or persons calling the meeting, at the time of giving the notice, intend
to present for action by the shareholders. The notice of any meeting at which
Directors are to be elected shall include the names of any nominees which, at
the time of the notice, management intends to present for election.
(b) 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, as contemplated by Section 310 of the Corporations Code of California,
(herein the "Code"), (ii) an amendment of the Articles of Incorporation,
pursuant to Section 902 of the Code, (iii) a reorganization of the corporation,
pursuant to Section 1201 of such Code, (iv) a voluntary dissolution of the
corporation, pursuant to Section 1900 of such Code, the notice shall also state
the general nature of such proposal.
Section 2.05 Manner of Giving Notice; Affidavit of Notice.
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(a) Notice of any meeting of shareholders shall be given either
personally or by first class mail or telegraphic or other written communication,
charges prepaid, addressed to each shareholder at the address of such
shareholder appearing on the books of the corporation or more recently 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 properly given to such shareholder if sent by first class mail or
telegraphic or other written communication to the corporation's principal
executive office to the attention of such shareholder, or if published at least
once in a newspaper of general circulation in the county where such 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.
(b) If any notice addressed to a shareholder at the address of such
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 such address, all future notices or reports shall be deemed to have been duly
given without further
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mailing if the same shall be available to the shareholder upon written demand of
the shareholder at the principal executive office of the corporation for a
period of one (1) year from the date of the giving of such notice.
(c) An affidavit of the mailing or other means of giving any notice of
any shareholders' meeting shall be executed by the Secretary, Assistant
Secretary or any transfer agent of the corporation giving such notice, and shall
be filed and maintained in the minute book of the corporation.
Section 2.06 Quorum. The presence in person or by proxy of the holders of
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a majority of the shares entitled to vote at the subject 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 transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 2,07 Adjourned Meeting and Notice Thereof.
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(a) Any shareholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of a majority of the
shares represented at such meeting, either in person or by proxy, but in the
absence of a quorum, no other business may be transacted at such meeting, except
as provided in Section 2.06.
(b) When any meeting of shareholders, either annual or special, is
adjourned to another time and place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the 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 or Directors shall
set a new record date. Notice of any such adjourned meeting, if required, shall
be given to each shareholder of record entitled to vote at the adjourned meeting
in accordance with the provisions of Sections 2.04 and 2.05. At any adjourned
meeting the corporation may transact any business which
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might have been transacted at the original meeting.
Section 2.08 Voting.
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(a) The shareholders entitled to vote at any meeting of shareholders
shall be determined in accordance with the provisions of Section 2.11, subject
to the provisions of Sections 702 to 704, inclusive, of the Code (relating to
voting shares held by a fiduciary, in the name of a corporation or in joint
ownership). Such vote may be by voice vote or by ballot; provided, however, that
all elections for Directors must be by ballot upon demand by a shareholder if
made before the voting begins. Any shareholder entitled to vote on any matter
(other than the election of directors) may vote part of the 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 such
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares such shareholder is
entitled to vote. If a quorum is present, the affirmative vote of a majority of
the shares represented at the meeting and entitled to vote on any matter (other
than the election of Directors) shall be the act of the shareholders, unless the
vote of a greater number or voting by classes is required by the Code or the
Articles of Incorporation.
(b) At a shareholders' meeting involving the election of Directors, no
shareholder shall be entitled to cumulate votes (i.e., cast for any one or more
candidates a number of votes greater than the number of the shareholder's
shares) unless the names of such candidates have been placed in nomination prior
to commencement of the voting and a shareholder has given notice to the meeting
prior to commencement of the voting, of the shareholder's intention to cumulate
his votes. If any shareholder has given such notice, then every shareholder
entitled to vote may cumulate his votes for candidates in nomination and give
any candidate up to a number of votes equal to the number of Directors to be
elected multiplied by the number of votes to which such shareholder's shares are
entitled, or distribute the total number of his votes as so calculated among any
or all of the candidates. The candidates receiving the highest number of votes
shall be elected.
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Section 2.09 Waiver of Notice or Consent by Absent Shareholders.
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(a) The transactions of any meeting of shareholders, either annual or
special, however called and noticed, and whenever held, shall be as valid as if
it had occurred at a meeting duly held after regular call and notice, if a
quorum be present either in person or by proxy, and if, either before or after
the meeting, each person entitled to vote but not present in person or by proxy,
signs a written waiver of notice, a consent to the holding of the meeting, or
any approval of the minutes thereof. The waiver of notice or consent need not
specify either the business to be 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 Section 2.04(b), the
waiver of notice of consent shall state the general nature of such proposal. All
such waivers, consents and approvals shall be filed with the corporate records
or made a part of the minutes of the meeting.
(b) Attendance of a person at a meeting shall constitute a waiver of
notice of such meeting unless such person objects at the beginning of the
meeting to the transaction of any business because the meeting is not lawfully
called or convened, except that attendance at a meeting is not a waiver of any
right to object to the consideration of matters not included in the notice of
the meeting if such objection is expressly made at the meeting.
Section 2.10 Shareholder Action by Written Consent Without a Meeting.
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(a) Any action which may be taken at any annual or special meeting of
shareholders, other than the election of Directors, may be taken without a
meeting and without prior notice, if a consent or consents in writing, setting
forth the action so taken, are signed by the holders of outstanding shares
representing not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. In the case of election of Directors, such
consents 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 not
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filled by the current Directors by the written consent of the holders of a
majority of the 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 not filled by the current Directors by the written consent of the
holders of a majority of the outstanding shares entitled to vote for the
election of Directors.
(b) 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 proxyholder, or a transferee of
the shares or a personal representative of the shareholder or their respective
proxyholders, may revoke the consent in writing effective upon receipt by the
Secretary of the corporation if occurring prior to the time that written
consents respecting the number of shares required to authorize the proposed
action have been filed with the Secretary.
(c) 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 have not 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 2.05 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, pursuant to Section 310 of the Code, (ii)
indemnification of agents of the corporation, pursuant to Section 317 of the
Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of the
Code, and (iv) a distribution in dissolution other than in accordance with the
rights of outstanding preferred shares, pursuant to Section 2007 of the Code,
the notice shall be given at least ten (10) days before the consummation of any
action authorized by that approval.
Section 2.11 Record Date for Shareholder Notice, Voting, and Giving
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Consents.
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(a) For purposes of determining the shareholders entitled to notice of
any meeting, to vote, or 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 nor less than ten (10) days
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prior to the date of any such meeting nor more than sixty (60) days prior to
such action without a meeting, and in such case only shareholders of record 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 fixed as aforesaid, except as otherwise
provided in the California General Corporation Law.
(b) If the Board of Directors does not so fix a record date:
(i) 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; and
(ii) the record date for determining those shareholders
entitled to give consent to corporation action in writing without a
meeting, when no prior action by the Board has been taken, shall be
the day on which the first written consent is given. When prior
action of the Board has been taken, the record date shall be at the
close of business on the day on which the Board adopts the
resolution relating thereto, or the sixtieth (60th) day prior to
the date of such other action, whichever is later.
Section 2.12 Proxies. Every person entitled to vote for Directors or on
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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 such 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. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless: (i)
revoked by the person executing it, prior to the vote pursuant thereto, by a
writing delivered to the corporation stating that the proxy is revoked, or by
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a subsequent proxy executed by the person executing the earlier proxy, or such
person's attendance at the meeting and voting in person; or (ii) written notice
of the death or incapacity of the maker of such proxy is received by the
corporation before the vote pursuant thereto is counted; provided, however, that
no such proxy shall be valid after the expiration of eleven (11) months from the
date of such proxy, unless otherwise provided in the proxy. The revocability of
a proxy that states on its face that it is irrevocable shall be governed by the
provisions of Section 705(e) and (f) of the Code.
Section 2.13 Inspectors of Election.
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(a) 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 said inspectors at the
meeting. The number of inspectors shall be either one (1) or three (3). If
inspectors are 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 shareholder's proxy shall, appoint a person to fill the
vacancy.
(b) The inspector shall:
(i) 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;
(ii) receive votes, ballots or consents;
(iii) hear and determine all challenges and questions in
any way arising in connection with the right to vote;
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(iv) count and tabulate all votes or consents;
(v) determine when the polls shall close;
(vi) determine the result; and
(vii) do any other acts that may be proper to conduct the
election or vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
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Section 3.01 Powers.
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(a) Subject to the provisions of the Code and any limitations in the
Articles of Incorporation and these Bylaws relating to action required to be
approved by the shareholders or by the outstanding shares, the business and
affairs of the corporation shall be managed and all corporate powers shall be
exercised by or under the direction of the Board of Directors.
(b) Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the Directors shall have the
power and authority to:
(i) select and remove all officers, agents, and employees of
the corporation, prescribe such powers and duties for them as are not
inconsistent with the law, the Articles of Incorporation or these Bylaws,
fix their compensation, and require from them security for faithful
service;
(ii) change the principal executive office or the principal
business office in the State of California from one location to another;
cause the corporation to be qualified to do business in any other state,
territory, dependency, or foreign country and conduct business within or
outside the State of California; designate any place within or without
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the State for the holding of any shareholder's meeting or meetings,
including annual meetings; adopt, make and use a corporate seal, and
prescribe the forms of certificates of stock, and alter the form of such
seal and of such certificates;
(iii) authorize the issuance of shares of stock of the
corporation from time to time, upon such terms as may be lawful, in
consideration of money paid, labor done or services actually rendered,
debts or securities cancelled or tangible or intangible property actually
received; and
(iv) borrow money and incur indebtendness for the purpose of the
corporation, and cause to be executed and delivered therefore, in the
corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations, or other evidences of debt and
securities therefore.
Section 3.02 Number of Qualifications of Directors. The authorized number
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of Directors shall be five until changed by a duly adopted amendment to
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the Articles of Incorporation.
Section 3.03 Election and Term of Office of Directors.
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(a) Directors shall be elected at each annual meeting of the shareholders
to hold office until the next annual shareholders' 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.
(b) No reduction of the authorized number of Directors shall have the
effect of removing any Director prior to the expiration of this term of office.
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Section 3.04 Vacancies.
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(a) Vacancies in the Board of Directors may be filled by a majority of
the remaining Directors, through 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 written consent of holders of a
majority of the 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.
(b) A vacancy or vacancies in the Board of Directors shall be deemed to
exist in the case 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 any meeting of shareholders at which any Director or
Directors are elected, to elect the full authorized number of Directors to be
voted for at that meeting.
(c) 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 consent of a majority of the outstanding
shares entitled to vote.
(d) Any director may resign upon giving written notice to the Chairman of
the Board, the President, the Secretary or the Board of Directors. A resignation
shall be effective upon the receipt of said notice, unless the notice specifies
a later time for its effectiveness. 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.
(e) No reduction of the authorized number of Directors shall have the
effect of removing any Director prior to the expiration of his term of office.
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Section 3.05 Place of Meetings and Telephonic Meetings. Regular meetings
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of the Board of Directors may be held without notice, at any time and at any
place within or outside the State of California that is designated by these
Bylaws, or by resolution of the Board. In the absence of the designation of a
place, regular meetings shall be held at the principal executive office of the
corporation. Special meetings of the Board shall be held at any place that has
been designated in the notice of the meeting or, if not stated in the notice, at
the principal executive office of the corporation. Any meeting, regular or
special, may be held by conference telephone or similar communications
equipment, so long as all Directors participating in such meeting can hear one
another, and all such Directors shall be deemed to be present in person at such
meeting.
Section 3.06 Annual Meetings. Immediately following each annual meeting
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of shareholders, the Board of Directors shall hold a regular meeting for
purposes of organization, the election of officers and the transaction of other
business. Notice of such meeting shall not be required.
Section 3.07 Other Regular Meetings. Other regular meetings of the Board
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of Directors may 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 3.08 Special Meetings.
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(a) 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 the majority of the Directors.
(b) 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 pre-paid, addressed to each Director at his or her address as
it is shown upon the records of the corporation. In case such notice is mailed,
it shall be deposited in the United States mail at least four (4) days prior to
the time of the holding of the meeting. In case such notice is delivered
personally, or by telephone or telegram, it shall be delivered personally or by
telephone or to the telegraph
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company at least forty-eight (48) hours prior to the time of the holding of the
meeting. Any oral notice given personally or by telephone may be communicated to
either the Director or to a person at the office of the Director who 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 the place
if the meeting is to be held at the principal executive office of the
corporation.
Section 3.09 Quorum. A majority of the authorized number of Directors
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shall constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. 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 Code (regarding approval of contracts or transactions in
which a director has a direct or indirect material financial interest), Section
311 (regarding appointment of committees), and Section 317(e) (regarding
indemnification of directors). A meeting at which a quorum is initially present
may continue to transact business nothwithstanding the withdrawal of Directors,
if any action taken is approved by at least a majority of the required quorum
for such meeting.
Section 3.10 Waiver of Notice. The transactions of any meeting of the
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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, either before or after the meeting, each of the
Directors not present signs a written waiver of notice, a consent to holding the
meeting or an approval of the minutes thereof. The 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. Notice of a meeting shall also be deemed given to any
Director who attends the meeting without protesting, the lack of notice.
Section 3.11 Adjournment. A majority of the Directors present, whether or
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not constituting a quorum, may adjourn any meeting to another time and place.
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Section 3.12 Notice of Adjournment. Notice of the time and place of
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holding an adjourned meeting need not be given, unless the meeting is adjourned
for more than twenty four (24) hours, in which case notice of such time and
place shall be given prior to the time of the adjourned meeting, to the
Directors who were not present at the time of the adjournment.
Section 3.13 Action Without Meeting. Any action required or permitted to
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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
such action. Such action by 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 of Directors.
Section 3.14 Fees and Compensation of Directors. Directors and members of
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committees may receive such compensation, if any, for their services, and such
reimbursement of expenses, as may be fixed or determined by resolution of the
Board of Directors. Nothing herein contained shall 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 such services.
ARTICLE IV
COMMITTEES
----------
Section 4.01 Committees of 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 one (1) 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. Any such 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 Code, also requires
shareholders' approval or approval of the outstanding shares;
15
(b) the filling of vacancies on the Board of Directors or on any
committee;
(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 (as defined in
Section 166 of the Code), 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 thereof.
Section 4.02 Meetings and Actions 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, Section 3.05 (place of meetings and
telephonic meetings), Section 3.07 (regular meetings), Section 3.08 (special
meetings and notice),Section 3.09 (quorum), Section 3.10 (waiver of notice),
Section 3.11 (adjournment), Section 3.12 (notice of adjournment) and Section
3.13 (action without meeting), with such changes in the context of those
sections 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 by resolution of the Board of Directors as well as
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.
16
ARTICLE V
OFFICERS
--------
Section 5.01 Officers. The officers of the corporation shall be a
---------------------
Chairman of the Board or a President, or both, Secretary, and a treasurer who
shall be the Chief Financial Officer. The corporation may also have, at the
discretion of the Board of Directors, one or more Vice-President, 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 5.03 of this
Article V. Any number of offices may be held by the same person, except that the
post of Secretary and President shall not be held by the same individual.
Section 5.02 Election of Officers. The officers of the corporation,
---------------------------------
except such officers as may be appointed in accordance with the provisions of
Section 5.03 or Section 5.05 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 5.03 Subordinate Officers, Etc. The Board of Directors may
--------------------------------------
appoint, and may empower the President, or Chairman of the Board if there be no
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 determine.
Section 5.04 Removal and Resignation of Officers.
------------------------------------------------
(a) 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 thereof, 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.
(b) Any officer may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect upon the receipt of such
notice or at any later time specified therein; and, unless otherwise specified
therin, the acceptance of such resignation shall not be necessary to make it
effective. Any such resignation is without prejudice to the rights, if any, of
the
17
corporation under any contract to which the officer is a party.
Section 5.05 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 appointments to such
office.
Section 5.06 Chairman of the Board. The Chairman of the Board, if such an
----------------------------------
officer be elected, shall, if present, preside at all 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 the
Bylaws.
Section 5.07 President. Subject to such supervisory powers which may be
----------------------
given by the Board of Directors to the Chairman of the Board, if there be 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 be
none, at 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 5.08 Vice President(s). In the absence or disability of the
------------------------------
President, the Vice President(s), 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 President(s) 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, the Bylaws, the President, or the Chairman of the Board if
there is no President.
Section 5.09 Secretary.
----------------------
(a) The Secretary shall keep or cause to be kept at the principal
executive office, or such other place as the
18
Board of Directors may designate, 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 thereof given, the names of those present at Director's and committee
meetings, the number of shares present or represented at shareholders' meetings,
and the proceedings thereof.
(b) 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 share
register, or a duplicate share register, showing the names of all shareholders
and their addresses, the number 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.
(c) The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board of Directors required by the
Bylaws or by law to be given, and he shall keep the seal of the corporation, if
one be 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 5.10 Chief Financial Officer.
------------------------------------
(a) The Treasurer shall be the corporation's Chief Financial Officer.
(b) 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 be open at all
reasonable times to inspection by any Director upon demand.
(c) The Chief Financial Officer shall cause to be deposited all moneys
and other valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the Board of Directors. He shall cause the
funds of the corporation to be disbursed as he may be properly directed from
time to time, shall render to the President and Directors an account of all of
his transactions as Chief Financial Officer and of the financial condition of
the corporation whenever requested, and shall have other such powers and perform
such other duties as may be prescribed by the Board of Directors or the Bylaws.
19
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
---------------------------------------
EMPLOYEES, AND OTHER AGENTS
---------------------------
Section 6.01 Definitions: 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 which 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 6.04 or Section 6.05(c) of this Article
VI.
Section 6.02 Actions Other Than by the Corporation. This corporation
--------------------------------------------------
shall 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) by reason of the fact that such person is or was an agent of this
corporation, against expenses, judgements, 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 nolo contendere or its equivalent shall not, of
---------------
itself, create a presumption that the person did not act in good faith and in a
manner which 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 6.03 Actions by the Corporation. This
---------------------------------------
20
corporation shall 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 that 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 ordinary prudent person in a like
position would use under similar circumstances. No indemnification shall be made
under Section 6.03:
(a) In respect of 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 action was brought 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
which is settled or otherwise disposed of without court approval.
Section 6.04 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 Section 6.02 or Section 6.03 of this Article VI, or in defense of
any claim, issue, or matter therein, the agent shall be indemnified against
expenses actually and reasonably incurred by the agent in connection therewith.
Section 6.05 Required Approval. Except as provided in Section 6.04 of
------------------------------
this Article, any indemnification under this Article shall be made by this
corporation only if authorized upon a determination that indemnification of the
agent in the specific case is proper because the agent has met the applicable
standard of conduct set forth in Section 6.02 or Section 6.03 of this Article
VI, by:
(a) a majority vote of a quorum consisting of
21
Directors who are not parties to the proceeding;
(b) approval by the affirmative vote of the holders 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, upon 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 6.06 Advance of Expenses. Expenses incurred in defending any
--------------------------------
proceeding may be advanced by this corporation before the final disposition of
the proceeding upon 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 VI.
Section 6.07 Other Contractual Rights. Nothing contained in this Article
-------------------------------------
VI 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 6.08 Limitations. No indemnification or advance shall be made
------------------------
under this Article VI, except as provided in Section 6.04 or Section 6.05(c), in
any circumstance where it appears:
(a) that it would be inconsistent with a provision of the Articles, the
Bylaws, 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.
22
Section 6.09 Insurance. The corporation may, upon a determination by the
----------------------
Board of Directors, purchase and maintain insurance on behalf of any agent of
the corporation against any liability which might be asserted against or
incurred by the agent in such capacity, or which might arise 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 Article
VI.
Section 6.10 Fiduciaries of Corporate Employee Benefit Plan. This Article
-----------------------------------------------------------
VI 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 this corporation as defined in
Section 6.01 of this Article VI. Nothing contained in this Article VI 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.
Section 6.11 Amendment to California Law. In the event that California
----------------------------------------
Law regarding indemnification of directors, officers, employees and other agents
of corporation, as in effect at the time of adoption of these Bylaws, is
subsequently amended to in any way increase the scope of permissible
indemnification beyond that set forth herein, the indemnification authorized by
this Article VI shall be deemed to be coextensive with the maximum afforded by
the California Law as so amended.
ARTICLE VII
CORPORATE LOANS AND GUARANTEES
------------------------------
TO DIRECTORS, OFFICERS AND EMPLOYEES
------------------------------------
Section 7.01 Limitation on Corporate Loans and Guarantees. Except as
---------------------------------------------------------
provided in Section 7.02 of this Article VII this corporation shall not make any
loan of money or property to, or guarantee any obligations of,
(a) any Director or officer of the corporation or of its parent or any
subsidiary, or
(b) any person, upon the security of shares of this
23
corporation or of its parent, unless the loan or guaranty is otherwise
adequately secured except by the vote of the holders of a majority of the shares
of all classes, regardless of limitations or restrictions on voting rights,
other than shares held by the benefited Director, officer or person.
Section 7.02 Permissible Corporate Loans and Guarantees. This corporation
-------------------------------------------------------
may lend money to, or guarantee any obligation of, or otherwise assist, any
officer or other employee of this corporation or of any subsidiary, including
any officer or employee who is also a Director, pursuant to an employee benefit
plan (including, without limitation, a stock purchase or stock option plan)
available to executives or other employees, whenever the Board determines that
such loan or guaranty could benefit the corporation. If such plan includes
officers or Directors, it shall be approved or ratified by the affirmative vote
of the holders of a majority of the shares of this corporation entitled to vote,
by written consent, or represented at a duly held meeting at which a quorum is
present, after disclosure of the right under such plan to include officers or
Directors is made. Such loan or guaranty or other assistance may be with or
without interest and may be unsecured or secured in such manner as the Board
shall approve, including, without limitation, a pledge of shares of the
corporation. This corporation may advance money to a Director or officer of the
corporation or of its parent or any subsidiary for expenses incurred in the
performance of the duties of such Director or officer, provided that in the
absence of such advance such Director or officer would be entitled to be
reimbursed for such expenses by such corporation, its parent or any subsidiary.
ARTICLE VIII
GENERAL CORPORATE MATTERS
-------------------------
Section 8.01 Record Date for Purposes Other Than Notice and Voting. (a)
------------------------------------------------------------------
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 for the
purposes prescribed by Section 2.11 of Article II of these Bylaws), the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
(60) days prior to any such action. Only shareholders
24
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 fixed as aforesaid, except as otherwise provided in the
California General Corporation Law.
(b) 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 resolution relating thereto,
or the sixtieth (60th) day prior to the date of such action, whichever is later.
Section 8.02 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 8.03 Corporate Contracts and Instruments; How Executed. The Board
--------------------------------------------------------------
of Directors, except as otherwise provided in these Bylaws, may authorize any
officer or agent to enter into any contract or execute any instrument in the
name of and on behalf of the corporation, and such authority may be general or
confined to specific instances. However, 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 to any amount.
Section 8.04 Certificates for Shares. A certificate or certificates for
------------------------------------
shares of the capital stock of the corporation shall be issued to each
shareholder when any such shares are fully paid, and the Board of Directors may
authorize the issuance of certificates for shares as partly paid provided that
such certificates shall state the amount of the consideration to be paid
therefor and the amount paid thereon. 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 a Secretary or any Assistant Secretary, certifying the
number of shares and the class or series of shares owned by the shareholder. Any
or all of the signatures on the certificate may be facsimile.
25
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if such person were an
officer, transfer agent or registrar at the date of issue.
Section 8.05 Lost Certificates. Except as hereinafter provided in this
------------------------------
Section 8.05, no new certificate for shares shall be issued in lieu of an old
certificate unless the old certificate is surrendered to the corporation and
cancelled at the same time. The Board of Directors may, if any share certificate
or certificate for any other security is lost, stolen or destroyed, authorize
issuance of a new certificate in lieu thereof, upon such terms and conditions as
the Board may require, including provision for indemnification of the
corporation secured by a bond of other adequate security sufficient to protect
the corporation against any claim that may be made against it, including, but
not limited to, any expense or liability, on account of the alleged loss, theft
or destruction of such certificate or the issuance of such new certificate.
Section 8.06 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 herein granted to said
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 such officer in person or by any person authorized to do so by
proxy duly executed by said officer.
Section 8.07 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 the foregoing, the singular number
includes the plural, the plural includes the singular, and the term "person"
includes both a corporation and a natural person.
26
ARTICLE IX
RECORDS AND REPORTS
-------------------
Section 9.01 Maintenance and Inspection of Share Register.
---------------------------------------------------------
(a) The corporation shall keep at its principal executive office, or as
determined by 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.
(b) A shareholder or shareholders of the corporation holding at least
five percent (5%), 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 upon giving the
corporation written notice five (5) business days' prior to the date of
inspection, and/or (ii) obtaining from the transfer agent of the corporation,
upon written demand and upon the tender of such transfer agent's usual charges
for such list, a list of the names and addresses of the shareholders who are
entitled to vote for the election of Directors, and their shareholdings as of
the most recent record date for which such list has been compiled, or as of a
date specified by the requesting shareholder or shareholders subsequent to the
date of demand. Such list shall be made available to such shareholder or
shareholders by the transfer agent on or before the later of the fifth (5th)
business day 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 upon 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 such holder's interests as a shareholder or
as the holder of a voting trust certificate. Any inspection and copying under
this Section 7.01 may be made in person or by an agent or attorney of the
shareholder or holder of a voting trust certificate making such demand.
Section 9.02 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 California, the original or a copy of the Bylaws as amended
27
to date, which shall be open to inspection by any shareholder upon the written
demand of any such shareholder at all reasonable times during usual business
hours. If the principal executive office of the corporation is outside this
state and the corporation has no principal business office in this state, the
Secretary shall, upon written request of any shareholder, furnish to such
shareholder a copy of the Bylaws as amended to date.
Section 9.03 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
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. Such 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 such holder's interests as a
shareholder or as the holder of a voting trust certificate. Such inspection may
be made in person or by an agent or attorney, and shall include the right to
copy and make extracts. The foregoing rights of inspection shall extend to the
records of each subsidiary corporation of the corporation.
Section 9.04 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. Such inspection by a Director may be made in
person or by agent or attorney and the right of inspection includes the right to
copy and make extracts.
Section 9.05 Annual Report to Shareholders. Until such time as there are
------------------------------------------
one hundred (100) or more shareholders in this corporation, 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 such annual or other periodic
reports to the shareholders of the corporation as they
28
consider appropriate.
Section 9.06 Financial Statements.
---------------------------------
(a) 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,
which have been prepared by the corporation shall be kept on file in the
principal executive office of the corporation for twelve (12) months after their
respective dates, and each such statement shall be exhibited at all reasonable
times to any shareholder requesting an examination. A copy of said statement
shall be mailed to any shareholder upon written request.
(b) If a shareholder or shareholders holding at least five percent (5%),
in the aggregate, of the outstanding shares of any class of stock of the
corporation make a written request to the corporation for an income statement of
the corporation for the three (3)-month, six (6)-month or nine (9)-month period
of the current fiscal year having ended more than thirty (30) days prior to the
date of the request, and a balance sheet of the corporation as of the end of
such period, the Chief Financial Officer shall cause such statement and to be
prepared, if not already prepared, and shall deliver personally or mail such
statement or statements to the person making the request within thirty (30) days
after the receipt of such request. If the corporation has not sent to each
requesting shareholder or shareholders its annual report for the last fiscal
year, this report shall likewise be delivered or mailed within thirty (30) days
after such request.
(c) The corporation shall also, upon written request, 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 such period.
(d) The quarterly income statements and balance sheets referred to in
this Section 9.06 shall be accompanied by the report thereon, if any, of any
independent accountants engaged by the corporation or the certificate of an
authorized officer of the corporation that such financial statements were
prepared without audit from the books and records of the corporation.
Section 9.07 Annual Statement of General Information. The corporation
----------------------------------------------------
shall each year during the
29
calendar month in which its Articles of Incorporation were originally filed with
the California Secretary of State, or at any time during the immediately
preceding five (5) calendar months, file with the Secretary of State of the
State of California, 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 (if any), 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 Code.
ARTICLE X
OWNERSHIP AND TRANSFER OF SHARES
--------------------------------
Select one of the two following sections number 10.01
Section 10.01 Stock. [Intentionally Deleted]
-------------------
Section 10.02 Price or Consideration for Shares.
-----------------------------------------------
(a) The authorized shares provided for in Section 10.01 shall be issued
for such consideration as shall be determined by the Board of Directors. The
Board of Directors is empowered to periodically review the set price of the
shares and modify said price or consideration subject to the shareholders'
approval.
(b) The consideration for which shares will issue may consist of money
paid, labor performed, services actually rendered to the corporation or for its
benefit or in its formation or reorganization, debts or securities cancelled,
and tangible and intangible property actually received by either the issuing
corporation or by a wholly owned subsidiary, or any one or combination of these.
The full agreed upon price or consideration for shares must be paid prior to a
concurrently with the issuance of the shares unless the shares are issued in
accordance with a stock
30
subscription or purchase agreement in which case the terms of payment delineated
in said stock subscription or purchase agreement shall be controlling.
Section 10.03 Grant of Preemptive Rights. [Intentionally Deleted]
-----------------------------------------
Section 10.04 Restrictions on Transfer of Shares. Before a shareholder
------------------------------------------------
can make a valid sale or transfer of any of the shares of the corporation, such
shareholder must first offer said shares to the corporation and then to the
other shareholders in the following manner:
(a) The offering shareholder shall deliver written notice to the
Secretary of the Corporation stating the price, terms and conditions of such
proposed sale or transfer, the number of shares to be sold or transferred and
his or her intention to so sell or transfer such shares. The corporation shall
have thirty (30) days after receipt of said notice to purchase said shares
pursuant to the price, terms and conditions stated in the notice, provided,
however, that the corporation shall not at any time be permitted to purchase all
of its outstanding voting shares. Should the corporation fail to exercise its
option to purchase the offered shares within thirty (30) days from receipt of
notice, or prior thereto decline to purchase the shares, the Secretary of the
Corporation shall mail or deliver to each of the other shareholders, within five
days of the close of the thirty day period or notice or decline to purchase, a
copy of the notice given by the selling shareholder to the Secretary. Within
thirty (30) days after the mailing or delivering of the copies of the notice to
the shareholders, any shareholder or shareholders desiring to acquire all or
apart of the offered shares must deliver to the Secretary by mail, or otherwise,
a written offer or offers, expressed to be immediately acceptable, to purchase a
specified number of said shares at the price and terms stated in the seller's
notice.
(b) If the total number of shares specified in the offers to purchase
exceeds the number of shares offered to be sold, each offering shareholder shall
be entitled to
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purchase such proportion of the offered shares as the number of shares of the
corporation he holds bears to the total number of shares held by all of the
shareholders offering to purchase the shares.
(c) If all of the shares offered to be sold or transferred are not
disposed of pursuant to the apportionment plan outlined in paragraph (b), each
shareholder wishing to purchase shares in a number in excess of his
proportionate share, shall be entitled to purchase such proportion of those
shares which remain undisposed of, as the total number of shares which he holds
bears proportionately 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.
(d) If within the above delineated period, offers to purchase all of the
offered shares are not presented, the corporation shall purchase from the
shareholder desiring to sell or transfer such shares all of the shares upon
which timely offers to purchase have not been made, provided, however, that the
sale or transfer of such shares be made for the fair market value of said shares
as determined by the Board of Directors.
(e) The provisions of this Section 10.04 shall terminate upon the
earliest to occur of (i) the first date on which shares of the Common Stock
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are held of record by more than five hundred (500) persons, (ii) a firm
commitment underwritten public offering, pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of the corporation's Common Stock, (iii) a sale, transfer or other
disposition of all or substantially all of the corporation's assets or
outstanding voting securities or the sale of at least voting control of the
corporation is effected through a merger, reorganization, consolidation or
recapitalization or (iv) December 31, 2002.
ARTICLE XI
AMENDMENTS
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Section 11.0l Amendments by Shareholders. New Bylaws may be adopted or
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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 11.02 Amendment By Directors. Subject to the rights of the
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shareholders as provided in Section 11.01 of this Article XI, to adopt, amend or
repeal Bylaws, Bylaws may be adopted, amended or repealed by the Board of
Directors.
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