Exhibit 3.2
THIRD AMENDED AND RESTATED BYLAWS
OF
BTI TELECOM CORP.
ARTICLE I
OFFICES
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Section 1. Principal Office. The principal office of the corporation shall
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be located at such place as the Board of Directors may fix from
time to time.
Section 2. Registered Office. The registered office of the corporation
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required by law to be maintained in the State of North Carolina
may be, but need not be, identical with the principal office.
Section 3. Other Offices. The corporation may have offices at such other
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places, either within or without the State of North Carolina, as
the Board of Directors may designate or as the affairs of the
corporation may require from time to time.
ARTICLE II
MEETINGS OF SHAREHOLDERS
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Section 1. Place of Meetings. All meetings of shareholders shall be held at
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the principal office of the corporation, or at such other place,
whether within or without the State of North Carolina, as shall
be designated in the notice of the meeting or agreed upon by the
Board of Directors.
Section 2. Annual Meeting. The annual meeting of shareholders shall be held
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during the fourth full month following the end of the
corporation's fiscal year at a time and on any day (except
Saturday, Sunday or a legal holiday) in that month as determined
by the Board of Directors for the purpose of electing directors
of the corporation and for the transaction of such other business
as may be properly brought before the meeting.
Section 3. Substitute Annual Meetings. If the annual meeting shall not be
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held on the day designated by these Bylaws, a substitute annual
meeting may be called in accordance with the provisions of
Section 4 of this Article II. A meeting
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so called shall be designated and treated for all purposes as the
annual meeting.
Section 4. Special Meetings. Special meetings of the shareholders, for any
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purpose or purposes, unless otherwise prescribed by statute, may
be called by the President, the Chief Executive Officer, the
Chairman of the Board or a majority of the members of the Board
of Directors then in office and shall be called by the Secretary
at the written request of holders of a majority of the
outstanding shares of Series A Preferred Stock or holders of a
majority of the outstanding shares of Series B Preferred Stock.
Any person or persons entitled to call a special meeting of
shareholders shall do so by delivering written notice to the
Secretary of the corporation stating that a special meeting has
been called and certifying to facts establishing that the person
or persons delivering the notice are entitled to call a special
meeting.
Section 5. Notice of Meetings. Written or printed notice stating the time
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and place of the meeting shall be delivered not less than ten
(10) nor more than sixty (60) days before the date of any
shareholders' meeting, either personally or by telegraph,
teletype or other form of wire or wireless communication, or by
facsimile, by or at the direction of the Chairman of the Board,
the President, the Secretary or other person calling the meeting,
to each shareholder of record entitled to vote at such meeting;
provided that such notice must be given to all shareholders with
respect to any meeting at which a merger, share exchange, sale of
assets other than in the regular course of business or voluntary
dissolution is to be considered and in such other instances as
required by law. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to
the shareholder at his address as it appears on the record of
shareholders of the corporation, with postage thereon prepaid.
In the case of a special meeting, the notice of meeting shall
specifically state the purpose or purposes for which the meeting
is called; but, in the case of an annual or substitute annual
meeting, the notice of meeting need not specifically state the
business to be transacted thereat unless such a statement is
required by the provisions of the North Carolina Business
Corporation Act.
When a meeting is adjourned to a different date, time or place,
notice need not be given of the new date, time or place if the
new date, time or place is announced at the meeting before
adjournment. If, however, a new record date for the adjourned
meeting is fixed, notice of the adjourned meeting will be given
to all persons who are shareholders as of the new record date in
accordance with this Section 5.
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Section 6. Waiver of Notice. Any shareholder may waive notice of any
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meeting. The waiver must be in writing, signed by the
shareholder and delivered to the corporation for inclusion in the
minutes or filing with the corporate records. A shareholder's
attendance at a meeting (a) waives objection to lack of notice or
defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or
transacting business at the meeting; and (b) waives objection to
consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice,
unless the shareholder objects to considering the matter before
it is voted upon.
Section 7. Shareholder Lists. Before each meeting of shareholders, the
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Secretary of the corporation shall prepare an alphabetical list
of the shareholders entitled to notice of such meeting. The list
shall be arranged by voting group (and within each voting group
by class or series of shares) and show the address and number of
shares held by each shareholder. The list shall be kept on file
at the principal office of the corporation, or at a place
identified in the meeting notice in the city where the meeting
will be held, for the period beginning two business days after
notice of the meeting is given and continuing through the
meeting, and shall be subject to inspection by any shareholder at
any time during regular business hours. This list shall also be
produced and kept open at the time and place of the meeting and
shall be subject to inspection by any shareholder during the
meeting or any adjournment thereof.
Section 8. Quorum. (A) A majority of the outstanding shares of the
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corporation entitled to vote and (B) until the consummation of
the corporation's initial public offering of capital stock
pursuant to a registration statement under the Securities Act of
1933, as amended (an "IPO"), (i) the holders of a majority of the
outstanding shares of Series A Preferred Stock and (ii) the
holders of a majority of the outstanding shares of Series B
Preferred Stock, in each case, represented in person or by proxy,
shall be required for, and shall constitute a quorum at all
meetings of shareholders; provided that if the corporation
provides reasonable notice and makes reasonable accommodations
for the holders of a majority of the shares of Series A Preferred
Stock or Series B Preferred Stock, as applicable, to attend a
meeting where such holders are required for a quorum, and such
holders are not present, the holders of a majority of the shares
of Series A Preferred Stock or Series B Preferred Stock, as
applicable, shall not be required for quorum. Shares entitled to
vote as a separate voting group may take action on a matter only
if a quorum of those shares exists; a majority of the votes
entitled to be cast on the matter by the voting group constitutes
a quorum of that voting group. The shareholders present at a
duly organized meeting may continue to do
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business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
In the absence of a quorum at the opening of any meeting of
shareholders, such meeting may be adjourned from time to time by
a vote of a majority of the shares voting on the motion to
adjourn; and at any adjourned meeting at which a quorum is
present, any business may be transacted that might have been
transacted at the original meeting.
Section 9. Organization. Each meeting of shareholders shall be presided
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over by the Chairman of the Board, and in his absence or at his
request by the President, and in their absence or at their
request by any person selected to preside by vote of the holders
of a majority of the shares present and entitled to vote at the
meeting. The Secretary, or in his absence or at his request, any
person designated by the person presiding at the meeting, shall
act as secretary of the meeting.
Section 10. Proxies. Shares may be voted either in person or by one or more
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agents authorized by a written proxy executed by the shareholder
or by his duly authorized attorney-in-fact. A proxy is not valid
after the expiration of eleven months from the date of its
execution, unless the person executing it specifies therein the
length of time for which it is to continue in force, or limits
its use to a particular meeting. Any proxy shall be revocable by
the shareholder unless the written appointment expressly and
conspicuously provides that it is irrevocable and the appointment
is coupled with an interest as required by law.
Section 11. Voting of Shares. Subject to the provisions of Section 4 of
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Article III and the corporation's Second Amended and Restated
Articles of Incorporation (as amended from time to time, the
"Articles of Incorporation") each outstanding share entitled to
vote shall be entitled to one vote on each matter submitted to a
vote at a meeting of shareholders. All shares entitled to vote
shall be counted together collectively on a matter as provided by
the Articles of Incorporation or by the North Carolina Business
Corporation Act and shall constitute a single voting group.
Additional required voting groups shall be determined in
accordance with the Articles of Incorporation and these Bylaws of
this corporation and the North Carolina Business Corporation Act.
Except in the election of directors as governed by the provisions
of Section 3 of Article III, the vote of a majority of the shares
voted on any matter at a meeting of shareholders at which a
quorum is present shall be the act of the shareholders on that
matter, unless the vote of a greater number is required by law or
by the Articles of Incorporation or Bylaws of this corporation.
Further, except in the election of directors, action on a matter
by a voting
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group shall be approved if the votes cast within the
voting group favoring the action exceed the votes cast opposing
the action, unless the vote by a greater number is required by
law or by the Articles of Incorporation or Bylaws of this
corporation. Corporate action on such matters shall be taken
only when approved by each and every voting group entitled to
vote as a separate voting group on such matters as provided by
the Articles of Incorporation or Bylaws of this corporation or by
the North Carolina Business Corporation Act. The foregoing
provisions of this Section 11 are subject to the rights of the
holders of Series A Preferred Stock and the holders of Series B
Preferred Stock pursuant to the provisions of the Articles of
Incorporation and the Amended and Restated Shareholders Agreement
(as amended from time to time, the "Shareholders Agreement")
dated as of January 2001 among the corporation and certain
shareholders of the corporation.
Voting on all matters except the election of directors shall be
by voice vote or by a show of hands unless the holders of one-
tenth (1/10th) of the shares represented at the meeting shall,
prior to the voting on any matter, demand a ballot vote on that
particular matter. Abstentions shall not be treated as negative
votes.
Shares of the corporation's stock are not entitled to vote if
they are owned, directly or indirectly, by a second corporation
and the corporation owns, directly or indirectly, a majority of
the shares entitled to vote for directors of the second
corporation, except that shares held in a fiduciary capacity,
including the corporation's own shares, may be voted.
Section 12. Informal Action by Shareholders. Any action that is required or
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permitted to be taken at a meeting of the shareholders may be
taken without a meeting if one or more written consents,
describing the action so taken, shall be signed by all of the
persons who would be entitled to vote upon such action at a
meeting, and such consent is delivered to the corporation for
inclusion in the minutes or filing with the corporate records.
Such consent shall have the same force and effect as a unanimous
vote of shareholders. Any shareholder may retract his consent
until the last shareholder entitled to vote has signed the
appropriate written consent and all consents have been delivered
to the Secretary of the corporation. When notice of a proposed
action is required to be given to nonvoting shareholders as
provided in Section 5 of Article II of these Bylaws, the
corporation shall give the nonvoting shareholders notice at least
ten (10) days before action is taken in lieu of a meeting by
unanimous consent of the voting shareholders. Such notice to
nonvoting shareholders shall contain or be accompanied by any
material that would have been required to be sent to the
nonvoting shareholders in a notice of meeting at which the
proposed action would have been submitted to the shareholders for
action.
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Section 13. Inspectors of Election.
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(a) Appointment of Inspectors of Election. In advance of any
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meeting of shareholders, the Board of Directors may appoint any
persons, other than nominees for office, as inspectors of
election to act at such meeting or any adjournment thereof. If
inspectors of election are not so appointed, the chairman of any
such meeting may appoint inspectors of election at the meeting.
The number of inspectors shall be either one or three. In case
any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the
Board of Directors in advance of the meeting or at the meeting by
the person acting as chairman.
(b) Duties of Inspectors. The inspectors of election shall
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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,
and shall receive votes, ballots or consents, hear and determine
all challenges and questions in any way arising in connection
with the right to vote, count and tabulate all votes or consents,
determine the result and do such acts as may be proper to conduct
the election or vote with fairness to all shareholders. The
inspectors of election shall perform their duties impartially, in
good faith, to the best of their ability and as expeditiously as
is practical.
(c) Vote of Inspectors. If there are three inspectors of
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election, the decision, act or certificate of a majority shall be
effective in all respects as the decision, act or certificate of
all.
(d) Report of Inspectors. On a request of the chairman of the
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meeting, the inspectors shall make a report in writing of any
challenge or question or matter determined by them and shall
execute a certificate of any fact found by them. Any report or
certificate made by them shall be prima facie evidence of the
facts stated therein.
Section 14. Shareholder Proposals. Any shareholder wishing to bring any
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other business before a meeting of the shareholders must provide
notice to the corporation not more than ninety (90) and not less
than fifty (50) days before the meeting in writing by registered
mail, return receipt requested, of the business to be presented
by such shareholder at the shareholders meeting. Any such notice
shall set forth the following as to each matter the shareholder
proposes to bring before the meeting: (A) a brief description of
the business desired to be brought before the meeting and the
reasons for conducting such business at the meeting and, if such
business includes a proposal to amend the Bylaws of the
corporation, the language of the proposed amendment; (B) the name
and address, as they appear on the corporation's books, of the
shareholder
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proposing such business; (C) the class and number of shares of
the corporation which are beneficially owned by such shareholder;
(D) a representation that the shareholder is a holder of record
of stock of the corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to propose
such business; and (E) any material interest of the shareholder
in such business. Notwithstanding the foregoing provisions of
this Section, a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated
thereunder with respect to the matters set forth in this Section.
In the absence of such notice to the corporation meeting the
above requirements, a shareholder shall not be entitled to
present any business at any meeting of shareholders; provided
that until the corporation's IPO, the Investor (as defined in the
Shareholders Agreement) shall be entitled to present any business
at any meeting of shareholders without complying with the notice
requirements of this Section 14.
ARTICLE III
BOARD OF DIRECTORS
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Section 1. General Powers. Subject to and in compliance with the provisions
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of Section 7 of the Shareholders Agreement and Section 6 of the
Articles of Incorporation, all corporate powers shall be
exercised by or under the authority of, and the business and
affairs of the corporation shall be managed under the direction
of, its Board of Directors or by such executive or other
committees as the Board may establish pursuant to these Bylaws.
Section 2. Number and Qualifications. The number of directors constituting
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the initial Board of Directors shall be not less than five (5)
nor more than ten (10) as may be fixed or changed from time to
time, within the minimum and maximum, by the shareholders or by
the Board of Directors. Directors need not be residents of the
State of North Carolina or shareholders of the corporation.
Section 3. Nomination and Election of Directors. The Board of Directors
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shall be constituted as set forth in Sections 5 and 10 of the
Shareholders Agreement. Subject to the provisions of the
Shareholders Agreement, nominations for the election of directors
may only be made by the Board of Directors, by the Nominating
Committee of the Board of Directors (or, if none, any other
committee serving a similar function) or by any shareholder
entitled to vote generally in elections of directors where the
shareholder complies with the requirements of this Section.
Unless otherwise provided in the Shareholders Agreement, any
shareholder of record entitled to vote generally in elections of
directors may nominate one or more persons for election as
directors at a
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meeting of shareholders only if written notice of
such shareholder's intent to make such nomination or nominations
has been given, either by personal delivery or by United States
certified mail, postage prepaid, to the Secretary of the
corporation (i) with respect to an election to be held at an
annual meeting of shareholders, not more than ninety (90) days
nor less than fifty (50) days in advance of such meeting and (ii)
with respect to an election to be held at a special meeting of
shareholders called for the purpose of the election of directors,
not later than the close of business on the tenth business day
following the date on which notice of such meeting is first given
to shareholders; provided that the foregoing notice provisions
shall not apply to the nomination of any directors designated
pursuant to the terms of the Shareholders Agreement. Each such
notice of a shareholder's intent to nominate a director or
directors at an annual or special meeting shall set forth the
following: (A) the name and address, as they appear on the
corporation's books, of the shareholder who intends to make the
nomination and the name and residence address of the person or
persons to be nominated; (B) the class and number of shares of
the corporation which are beneficially owned by the shareholder;
(C) a representation that the shareholder is a holder of record
of stock of the corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (D) a
description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination
or nominations are to be made by the shareholder; (E) such other
information regarding each nominee proposed by such shareholder
as would be required to be disclosed in solicitations of proxies
for election of directors, or as would otherwise be required, in
each case pursuant to Regulation 14A under the Exchange Act,
including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (F) the
written consent of each nominee to be named in a proxy statement
and to serve as director of the corporation if so elected.
Subject to the provisions of the Shareholders Agreement, no
person shall be eligible to serve as a director of the
corporation unless nominated in accordance with the procedures
set forth in this Section. If the chairman of the shareholders
meeting shall determine that a nomination was not made in
accordance with the procedures described by these bylaws, he
shall so declare to the meeting, and the defective nomination
shall be disregarded. Notwithstanding the foregoing provisions
of this Section, a shareholder shall also comply with all
applicable requirements of the Exchange Act and the rules and
regulations promulgated thereunder with respect to the matters
set forth in this Section.
Except as provided in Section 6 of this Article III, the
directors shall be elected at the annual meeting of shareholders;
and those persons who receive
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the highest number of votes at a meeting at which a quorum is
present shall be deemed to have been elected. Every shareholder
entitled to vote at an election of directors shall have the right
to vote the number of shares standing of record in his name for
as many persons as there are directors to be elected and for
whose election he has a right to vote.
Section 4. Term of Directors. Each initial director shall hold office until
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the first shareholders' meeting at which directors are elected,
or until such director's death, resignation or removal. The
terms of every other director shall expire at the next annual
shareholders' meeting following a director's election or upon
such director's death, resignation or removal. The term of a
director elected to fill a vacancy expires at the next
shareholders' meeting at which directors are elected. Despite
the expiration of a director's term, such director shall continue
to serve until a qualified successor shall be elected. A
decrease in the number of directors does not shorten an incumbent
director's term.
Section 5. Removal. Subject to the provisions of the Shareholders
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Agreement, any director may be removed at any time with or
without cause by a vote of the shareholders if the number or
votes cast to remove such director exceeds the number of votes
cast not to remove him. If a director is elected by a voting
group of shareholders, only the shareholders of that voting group
may participate in the vote to remove him. If any directors are
so removed, new directors may be elected at the same meeting. A
director may not be removed by the shareholders at a meeting
unless the notice of the meeting states that the purpose, or one
of the purposes, of the meeting, is removal of the director.
Section 6. Vacancies. Unless otherwise provided in the Shareholders
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Agreement, any vacancy occurring in the Board of Directors,
including, without limitation, a vacancy resulting from an
increase in the number of directors or from the failure by the
shareholders to elect the full authorized number of directors,
may be filled by the shareholders or the Board of Directors,
whichever group shall act first. Unless otherwise provided in
the Shareholders Agreement, if the directors remaining in office
do not constitute a quorum of the Board, the directors may fill
the vacancy by the affirmative vote of a majority of the
remaining directors.
Section 7. Chairman of the Board. There may be a Chairman of the Board of
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Directors elected by the directors from their number at any
meeting of the Board. The Chairman shall preside at all meetings
of the Board of Directors and perform such other duties as may be
directed by the Board. He shall be an ex officio member of all
committees. He shall make a report in writing at the annual
meeting of the Board of Directors stating the condition of the
corporation and shall make such suggestions and recommendations
as he shall deem
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proper for the best interests of the corporation. He shall
appoint delegates and representatives to the organizations with
which the corporation is affiliated. He shall have the power to
call the regular and any special meetings of the Board of
Directors. Until a Chairman is elected, the President of the
corporation shall preside at the meetings of the Board of
Directors and shareholders.
Section 8. Compensation. The Board of Directors, in its discretion, may
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compensate directors for their services as such and may provide
for the payment of all expenses incurred by directors in
attending regular and special meetings of the Board or of the
Executive Committee. Nothing herein contained, however, shall be
construed to preclude any director from serving the corporation
in any other capacity and receiving compensation therefor.
Section 9. Committees. Subject to and in compliance with Section 6 of the
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Shareholders Agreement, the Board of Directors, by resolution
adopted by a majority of the number of directors in office when
the action is taken or, if greater, the number of directors
required to take action pursuant to Section 6 of Article IV, may
designate two or more directors to constitute an Executive
Committee and other committees, each of which, to the extent
authorized by law and provided in such resolution, shall have and
may exercise all of the authority of the Board of Directors in
the management of the corporation. Unless otherwise provided in
Section 6 of the Shareholders Agreement, each committee member
serves at the pleasure of the Board of Directors. The provisions
in these Bylaws that govern meetings, action without meetings,
notice and waiver of notice, and quorum and voting requirements
of the Board of Directors apply to committees established by the
Board.
ARTICLE IV
MEETINGS OF DIRECTORS
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Section 1. Regular Meetings. A regular meeting of the Board of Directors
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shall be held immediately after, and at the same place as, the
annual meeting of shareholders. In addition, the Board of
Directors may provide, by resolution, the time and place, either
within or without the State of North Carolina, for the holding of
additional regular meetings.
Section 2. Special Meetings. Special meetings of the Board of Directors may
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be called by or at the request of the Chairman of the Board of
Directors, if any, by the President or any two directors. Such
meetings may be held either within or without the State of North
Carolina, as fixed by the person or persons calling the meeting.
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Section 3. Notice of Meetings. Regular meetings of the Board of Directors
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may be held without notice.
The person or persons calling a special meeting of the Board of
Directors shall, at least two days before the meeting, give
notice thereof by any usual means of communication. Such notice
need not specify the purpose for which the meeting is called.
Section 4. Waiver of Notice. Any director may waive notice of any meeting.
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The waiver must be in writing, signed by the director entitled to
the notice and delivered to the corporation for inclusion in the
minutes or filing with the corporate records. A director's
attendance at or participation in a meeting shall constitute a
waiver of notice of such meeting, unless the director at the
beginning of the meeting (or promptly on arrival) objects to
holding the meeting or transacting business at the meeting and
does not thereafter vote for or assent to action taken at the
meeting.
Section 5. Quorum. A majority of the directors fixed by these Bylaws shall
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be required for, and shall constitute, a quorum for the
transaction of business at any meeting of the Board of Directors
unless the Articles of Incorporation or these Bylaws provide
otherwise; provided that so long as the Investor (as defined in
the Shareholders Agreement) has the right to designate a director
to the Board of Directors pursuant to the Shareholders Agreement,
a quorum must include at least one director designated by the
Investor unless the corporation has given reasonable prior notice
and has made reasonable accommodations for such Investor designee
or designees to attend such meeting.
Section 6. Manner of Acting. Except as otherwise provided in the Articles
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of Incorporation or these Bylaws, the act of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.
Section 7. Presumption of Assent. A director of the corporation who is
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present at a meeting of the Board of Directors or a committee of
the Board of Directors when corporate action is taken is deemed
to have assented to the action taken unless (a) he objects at the
beginning of the meeting (or promptly upon his arrival) to
holding it or transacting business at the meeting, or (b) his
dissent or abstention from the action taken is entered in the
minutes of the meeting, or (c) he files written notice of his
dissent or abstention with the presiding officer of the meeting
before its adjournment or with the corporation immediately after
the adjournment. Such right to dissent shall not apply to a
director who voted in favor of such action.
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Section 8. Action Without Meeting. Action required or permitted to be taken
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at a meeting of the Board of Directors may be taken without a
meeting if the action is taken by all members of the Board. The
action must be evidenced by one or more written consents signed
by each director before or after such action, describing the
action taken, and included in the minutes or filed with the
corporate records. Such action will become effective when the
last director signs the consent, unless the consent specifies a
different date.
Section 9. Conference Telephone Meetings. Any one or more directors or
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members of a committee may participate in a meeting of the Board
of Directors or committee by means of a conference telephone or
similar communications device that allows all persons
participating in the meeting to hear each other, and such
participation in a meeting shall be deemed presence in person at
such meeting.
ARTICLE V
OFFICERS
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Section 1. Officers of the Corporation. The officers of the corporation
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shall consist of a Chairman of the Board, a President, a
Secretary, a Treasurer and such Vice-Presidents, Assistant
Secretaries, Assistant Treasurers, and other officers (including
Controllers and Assistant Controllers) as the Board of Directors
may from time to time elect, subject to and in compliance with
Sections 7 and 9 of the Shareholders Agreement. Any two or more
offices may be held by the same person, but no officer may act in
more than one capacity where action of two or more officers is
required.
Section 2. Appointment and Term. The officers of the corporation shall be
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appointed by the Board of Directors and each officer shall hold
office until his death, resignation, retirement, removal,
disqualification, or his successor shall have been appointed and
qualified.
Section 3. Removal. Any officer or agent elected or appointed by the Board
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of Directors may be removed by the Board at any time with or
without cause; but such removal shall be without prejudice to the
contract rights, if any, of the person so removed.
Section 4. Resignation. An officer may resign at any time by communicating
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his resignation to the corporation, orally or in writing. A
resignation is effective when communicated unless it specifies in
writing a later effective date. If a resignation is made
effective at a later date that is accepted by the corporation,
the Board of Directors may fill the pending vacancy before the
effective date if the Board provides that the successor does not
take office
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until the effective date. An officer's resignation does not
affect the corporation's contract rights, if any, with the
officer.
Section 5. Compensation of Officers. The compensation of all officers of
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the corporation shall be fixed by the Board of Directors and no
officer shall serve the corporation in any other capacity and
receive compensation therefor unless such additional compensation
be authorized by the Board of Directors.
Section 6. Chairman of the Board. Unless otherwise specified by resolution
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of the Board, the Chairman of the Board shall be the Chief
Executive Officer of the corporation (and may be identified as
such in his title) and, subject to the direction and control of
the Board of Directors, shall supervise and control the
management of the corporation. The Chairman of the Board shall,
when present, preside at all meetings of the directors and
shareholders and, in general, shall perform all duties incident
to the office of Chairman of the Board and such other duties as
may be prescribed from time to time by the Board of Directors.
Section 7. President. Unless otherwise specified by resolution of the
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Board, the President shall be the Chief Operating Officer of the
corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall, in the
absence of the Chairman of the Board, preside at all meetings of
the shareholders. He shall sign, with the Secretary, an
Assistant Secretary, or any other proper officer of the
corporation thereunto authorized by the Board of Directors,
certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments that the Board of
Directors has authorized to be executed, except in cases where
the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these Bylaws to some other officer
or agent of the corporation, or shall be required by law to be,
otherwise signed or executed; and, in general, he shall perform
all duties incident to the office of President and such other
duties as may be prescribed by the Board of Directors from time
to time.
Section 8. Vice-Presidents. In the absence of the President or in the event
---------------
of his death, inability or refusal to act, the Vice-Presidents in
the order of their length of service as such, unless otherwise
determined by the Board of Directors, shall perform the duties of
the President, and when so acting shall have all the powers of
and be subject to all the restrictions upon the President. Any
Vice-President may sign, with the Secretary or an Assistant
Secretary, certificates of shares of the corporation; and shall
perform such other duties as from time to time may be assigned to
him by the President or Board of Directors. The Board of
Directors may designate one or more
13
Vice-Presidents to be responsible for certain functions,
including, without limitation, Marketing, Finance, Manufacturing
and Personnel.
Section 9. Secretary. The Secretary shall: (a) keep the minutes of the
---------
meetings of shareholders, of the Board of Directors and of all
committees in one or more books provided for that purpose; (b)
see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be
custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed
to all documents the execution of which on behalf of the
corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which
shall be furnished to the Secretary by such shareholder; (e) sign
with the President, or a Vice-President, certificates for shares
of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) maintain
and have general charge of the stock transfer books of the
corporation; (g) prepare or cause to be prepared shareholder
lists prior to each meeting of shareholders as required by law;
(h) attest the signature or certify the incumbency or signature
of any officer of the corporation; and (i) in general perform all
duties incident to the office of Secretary and such other duties
as from time to time may be assigned to him by the President or
by the Board of Directors.
Section 10. Assistant Secretaries. In the absence of the Secretary or in the
---------------------
event of his death, inability or refusal to act, the Assistant
Secretaries in the order of their lengths of service as Assistant
Secretaries, unless otherwise determined by the Board of
Directors, shall perform the duties of the Secretary, and when so
acting shall have all the powers of and be subject to all the
restrictions upon the Secretary. They shall perform such other
duties as may be assigned to them by the Secretary, by the
President, or by the Board of Directors. Any Assistant Secretary
may sign, with the President or a Vice-President, certificates
for shares of the corporation.
Section 11. Treasurer. The Treasurer shall: (a) have charge and custody of
---------
and be responsible for all funds and securities of the
corporation; receive and give receipts for monies due and payable
to the corporation from any source whatsoever, and deposit all
such monies in the name of the corporation in such depositories
as shall be selected in accordance with the provisions of Section
4 of Article VI of these Bylaws; (b) maintain appropriate
accounting records as required by law; (c) prepare, or cause to
be prepared, annual financial statements of the corporation that
include a balance sheet as of the end of the fiscal year and an
income and cash flow statement for that year, which statements,
or a written notice of their availability, shall be mailed to
each shareholder within One Hundred Twenty (120) days after the
end of such fiscal year; and (d) in general perform all of the
duties incident to the office of Treasurer and such other duties
as from time to time may be
14
assigned to him by the President or by the Board of Directors, or
by these Bylaws.
Section 12. Assistant Treasurers. In the absence of the Treasurer or in the
--------------------
event of his death, inability or refusal to act, the Assistant
Treasurers in the order of their length of service as such,
unless otherwise determined by the Board of Directors, shall
perform the duties of the Treasurer, and when so acting shall
have all the powers of and be subject to all the restrictions
upon the Treasurer. They shall perform such other duties as may
be assigned to them by the Treasurer, by the President, or by the
Board of Directors.
Section 13. Controller and Assistant Controllers. The Controller, if one has
------------------------------------
been appointed, shall have charge of the accounting affairs of
the corporation and shall have such other powers and perform such
other duties as the Board of Directors shall designate. Each
Assistant Controller shall have such powers and perform such
duties as may be assigned by the Board of Directors and the
Assistant Controller shall exercise the powers of the Controller
during that officer's absence or inability to act.
Section 14. Delegation of Duties of Officers. In case of the absence of any
--------------------------------
officer of the corporation or for any other reason that the Board
may deem sufficient, the Board may delegate the powers or duties
of such officer to any other officer or to any director for the
time being provided a majority of the entire Board of Directors
concurs herein.
Section 15. Bonds. The Board of Directors may by resolution, require any or
-----
all officers, agents or employees of the corporation to give bond
to the corporation, with sufficient sureties, conditioned on the
faithful performance of the duties of their respective offices or
positions, and to comply with such other conditions as may from
time to time be required by the Board of Directors.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------
Section 1. Contracts. The Board of Directors may authorize any officer or
---------
officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the
corporation, and such authority may be general or confined to
specific instances. Any resolution of the Board of Directors
authorizing the execution of documents by the proper officers of
the corporation or by the officers generally shall be deemed to
authorize such execution by the Chairman of the Board, the
President, any Vice-President, or the Treasurer, or any other
officer if such execution is
15
generally within the scope of the duties of his office. The Board
of Directors may by resolution authorize such execution by means
of one or more facsimile signatures.
Section 2. Loans. No loans shall be contracted on behalf of the corporation
-----
and no evidence of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors.
Such authority may be general or confined to specific instances.
Section 3. Checks and Drafts. All checks, drafts or other orders for the
-----------------
payment of money issued in the name of the corporation shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise employed
--------
shall be deposited from time to time to the credit of the
corporation in such depositories as the Board of Directors may
select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
------------------------------------------
Section 1. Certificates for Shares. The Board of Directors may authorize
-----------------------
the issuance of some or all of the shares of the corporation's
classes or series of capital stock without issuing certificates
to represent such shares. If shares are represented by
certificates, the certificates shall be in such form as required
by law and shall be determined by the Board of Directors.
Certificates shall be signed (either manually or in facsimile) by
the Chairman of the Board, President or a Vice-President and by
the Secretary or Treasurer or an Assistant Secretary or an
Assistant Treasurer. The signatures of any such officers upon a
certificate may be facsimiles or may be engraved or printed. In
case any officer who has signed or whose facsimile or other
signature has been placed upon such certificate shall have ceased
to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such
officer at the date of its issue. All certificates for shares
shall be consecutively numbered or otherwise identified and
entered into the stock transfer books of the corporation. When
shares are represented by certificates, the corporation shall
issue and deliver to each shareholder to whom such shares have
been issued or transferred, certificates representing the shares
owned by him. When shares are not represented by certificates,
then within a reasonable time after the issuance or transfer of
such shares, the corporation shall send the shareholder to whom
such shares have been issued or transferred a written statement
of the information required by law to be on certificates.
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Section 2. Stock Transfer Books. The corporation shall keep a book or set
--------------------
of books, to be known as the stock transfer books of the
corporation, containing the name of each shareholder of record,
together with such shareholder's address and the number and class
or series of shares held by him. Transfer of shares shall be
made only on the stock transfer books of the corporation by the
holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed
and filed with the Secretary, and on surrender for cancellation
of the certificate for such shares (if the shares are represented
by certificates). All certificates surrendered for transfer (if
the shares are represented by certificates) shall be cancelled
before new certificates (or written statements in lieu thereof)
for the transferred shares shall be issued or delivered to the
shareholder.
Section 3. Fixing Record Date. The Board of Directors may fix a future date
------------------
as the record date for one or more voting groups in order to
determine the shareholders entitled to notice of or to vote at
any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any distribution, or in order to
make a determination of shareholders for any other proper
purpose. Such record date may not be more than seventy (70) days
before the meeting or date on which the particular action
requiring such determination of shareholders is to be taken. A
determination of shareholders entitled to notice of or to vote at
a shareholders' meeting is effective for any adjournment of the
meeting unless the Board of Directors fixes a new record date for
the adjourned meeting, which it must do if the meeting is
adjourned to a date more than One Hundred Twenty (120) days after
the date fixed for the original meeting.
If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a distribution, the
close of business on the day before the first notice of the
meeting is delivered to shareholders or the date on which the
resolution of the Board of Directors declaring such distribution
is adopted, as the case may be, shall be the record date for such
determination of shareholders.
Section 4. Lost or Destroyed Certificate. The Board of Directors may direct
-----------------------------
a new certificate to be issued in place of any certificate
theretofore issued by the corporation claimed to have been lost,
destroyed or wrongfully taken, upon receipt of an affidavit of
such fact from the person claiming the certificate of stock to
have been lost or destroyed. When authorizing such issue of a
new certificate, the Board of Directors shall require that the
owner of such lost or destroyed certificate, or his legal
representative, give the corporation a bond in such sum as the
Board may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate claimed
to
17
have been lost or destroyed, except where the Board of Directors
by resolution finds that in the judgment of the directors the
circumstances justify omission of a bond.
Section 5. Holder of Record. Except as otherwise required by law, the
----------------
corporation may treat as absolute owner of shares the person in
whose name the shares stand of record on its books just as if
that person had full competency, capacity and authority to
exercise all rights of ownership irrespective of any knowledge or
notice to the contrary or any description indicating a
representative, pledge or other fiduciary relation or any
reference to any other instrument or to the rights of any other
person appearing upon its record or upon the share certificate
except that any person furnishing to the corporation proof of his
appointment as a fiduciary shall be treated as if he were a
holder of record of its shares.
Section 6. Shares Held By Nominees.
-----------------------
(a) The corporation shall recognize the beneficial owner of
shares registered in the name of a nominee as the owner and
shareholder of such shares for certain purposes if the nominee in
whose name such shares are registered files with the Secretary of
the corporation a written certificate in a form prescribed by the
corporation, signed by the nominee and indicating the following:
(1) the name, address and taxpayer identification number of the
nominee; (2) the name, address and taxpayer identification number
of the beneficial owner; (3) the number and class or series of
shares registered in the name of the nominee as to which the
beneficial owner shall be recognized as the shareholder; and (4)
the purposes for which the beneficial owner shall be recognized
as the shareholder.
(b) The purposes for which the corporation shall recognize a
beneficial owner as the shareholder may include the following:
(1) receiving notice of, voting at and otherwise participating in
shareholders' meetings; (2) executing consents with respect to
the shares; (3) exercising dissenters' rights under Article 13 of
the North Carolina Business Corporation Act; (4) receiving
distributions and share dividends with respect to the shares; (5)
exercising inspection rights; (6) receiving reports, financial
statements, proxy statements and other communications from the
corporation; (7) making any demand upon the corporation required
or permitted by law; and (8) exercising any other rights or
receiving any other benefits of a shareholder with respect to the
shares.
(c) The certificate shall be effective ten (10) business days
after its receipt by the corporation and until it is changed by
the nominee, unless the certificate specifies a later effective
time or an earlier termination date.
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(d) If the certificate affects less than all of the shares
registered in the name of the nominee, the corporation may
require the shares affected by the certificate to be registered
separately on the books of the corporation and be represented by
a share certificate that bears a conspicuous legend stating that
there is a nominee certificate in effect with respect to the
shares represented by that share certificate.
Section 7. Acquisition by Corporation of its Own Shares. Subject to the
--------------------------------------------
provisions of the Articles of Incorporation, the corporation may
acquire its own shares and shares so acquired shall constitute
authorized but unissued shares. Unless otherwise prohibited by
the Articles of Incorporation, the corporation may reissue such
shares. If reissue is prohibited, the Articles of Incorporation
shall be amended to reduce the number of authorized shares by the
number of shares so acquired. Such required amendment may be
adopted by the Board of Directors without shareholder action.
ARTICLE VIII
GENERAL PROVISIONS
------------------
Section 1. Distributions. The Board of Directors may from time to time
-------------
authorize, and the corporation may make distributions to its
shareholders pursuant to law and subject to the provisions of its
Articles of Incorporation.
Section 2. Seal. The corporate seal of the corporation shall consist of two
----
concentric circles between which is the name of the corporation
and in the center of which is inscribed CORPORATE SEAL; and such
seal, as impressed on the margin hereof, is hereby adopted as the
corporate seal of the corporation.
Section 3. Fiscal Year. The fiscal year of the corporation shall be fixed
-----------
by the Board of Directors.
Section 4. Amendments. Except as otherwise provided herein and by law,
----------
these Bylaws may be amended or repealed and new bylaws may be
adopted by the affirmative vote of a majority of the directors
then holding office at any regular or special meeting of the
Board of Directors; provided that (i) any provision of these
Bylaws that is governed by or subject to the provisions of the
Shareholders Agreement or the Articles of Incorporation shall not
be amended except in accordance with the terms thereof and (ii)
Section 2 of Article III shall not be amended without the prior
written consent of the Investor (as defined in the Shareholders
Agreement) for so long as the Investor has the right to designate
a director to the Board of Directors pursuant to the Shareholders
Agreement.
19
No bylaw adopted or amended or repealed by the shareholders shall
be readopted, amended or repealed by the Board of Directors,
unless the Articles of Incorporation or a bylaw adopted by the
shareholders authorizes the Board of Directors to adopt, amend or
repeal that particular bylaw or the Bylaws generally.
Section 5. Salary and Other Compensation. Any payments made to an officer
-----------------------------
of the corporation such as salary, commission, bonus, interest,
or reimbursement of rent or entertainment expenses incurred by
him, that shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service, shall be reimbursed by
such officer of the corporation to the full extent of such
disallowance.
Section 6. Indemnification. Any person who at any time serves or has served
---------------
as a director or officer of the corporation or in such capacity
at the request of this corporation as a director or officer of
another corporation, partnership, joint venture, trust or other
enterprise, shall have a right to be indemnified by the
corporation to the fullest extent permitted by law against (a)
reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him in connection with any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (and any appeal
therein), formal or informal, and whether or not brought by or on
behalf of the corporation, seeking to hold him liable by reason
of the fact that he is or was acting in such capacity, and (b)
reasonable payments made by him in satisfaction of any judgment,
money decree, fine, penalty or settlement for which he may have
become liable in any such action, suit or proceeding.
The Board of Directors of the corporation shall take all such
action as may be necessary and appropriate to authorize the
corporation to pay the indemnification required by this bylaw,
including without limitation, to the extent needed, making a good
faith evaluation of the manner in which the claimant for
indemnity acted and of the reasonable amount of indemnity due him
and giving notice to, and obtaining approval by, the shareholders
of the corporation.
Any person who is entitled to indemnification by the corporation
hereunder shall, subject to applicable law, also be entitled to
reimbursement of reasonable costs, expenses and attorneys' fees
incurred in obtaining such indemnification.
Expenses incurred by a director in defending an action, suit or
proceeding shall be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director to pay such
amount unless it shall ultimately be determined that
20
he or she is entitled to be indemnified by the corporation
against such expenses.
Any person who at any time after the adoption of this bylaw
serves or has served in any of the aforesaid capacities for or on
behalf of the corporation shall be deemed to be doing or to have
done so in reliance upon, and as consideration for, the right of
indemnification provided herein. Such right shall inure to the
benefit of the legal representatives of any such person and shall
not be exclusive of any other rights to which such person may be
entitled apart from the provision of this bylaw.
Section 7. Advance Payment of Expenses. The corporation shall (upon receipt
---------------------------
of an undertaking by or on behalf of the director or officer
involved to repay the expenses described herein unless it shall
ultimately be determined that he is entitled to be indemnified by
the corporation against such expenses) pay expenses (including
attorneys' fees) incurred by such director, officer, employee or
agent in defending any threatened, pending or completed action,
suit or proceeding and any appeal therein whether civil,
criminal, administrative, investigative or arbitrative and
whether formal or informal or appearing as a witness at a time
when he has not been named as a defendant or a respondent with
respect thereto in advance of the final disposition of such
proceeding.
Section 8. Directors and Officers Liability Insurance. The Board of
------------------------------------------
Directors may cause the corporation to purchase and maintain
"Directors and Officers Liability Insurance" in amounts as are
reasonable and customary for companies conducting business
similar to that of the corporation for the benefit of any person
who is or was serving as a director, officer, employee or agent
of this corporation or for the benefit of any person who is or
was serving at the request of this corporation as a director,
officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise. This insurance may
cover any liability incurred by such person in any capacity
arising out of this status as such even if the corporation would
not otherwise have the power to indemnify him against that
liability.
Section 9. Effective Date of Notice. Except as provided in Section 5 of
------------------------
Article II, written notice shall be effective at the earliest of
the following: (1) when received; (2) five days after its
deposit in the United States mail, as evidenced by the postmark,
if mailed with postage thereon prepaid and correctly addressed;
or (3) on the date shown on the return receipt, if sent by
registered or certified mail, return receipt requested and the
receipt is signed by or on behalf of the addressee.
Section 10. Corporate Records. Any records maintained by the corporation in
-----------------
the regular course of its business, including its stock ledger,
books of account
21
and minute books, may be kept on or be in the form of punch
cards, magnetic tape, photographs, microphotographs or any other
information storage device; provided that the records so kept can
be converted into clearly legible form within a reasonable time.
The corporation shall so convert any records so kept upon the
request of any person entitled to inspect the same. The
corporation shall maintain at its principal office the following
records: (1) Articles of Incorporation and all amendments
thereto; (2) Bylaws and all amendments thereto; (3) resolutions
by the Board of Directors creating classes or series of shares
and affixing rights, preferences or limitations to shares; (4)
minutes of all shareholder meetings or action taken without a
meeting for the past three years; (5) all written communications
to shareholders for the past three years, including financial
statements; and (6) the corporation's most recent annual report
filed with the North Carolina Secretary of State.
Section 11. Amendments to Articles of Incorporation. To the extent permitted
---------------------------------------
by law, the Board of Directors may amend the Articles of
Incorporation without shareholder approval to (1) delete the
initial directors' names and addresses; (2) change the initial
registered agent or office in any state in which it is qualified
to do business, provided such change is on file with the
applicable Secretary of State; (3) change each issued and
unissued share of an outstanding class into a greater number of
whole shares, provided that class is the corporation's only
outstanding share class; (4) change the corporate name by
substituting "corporation," "incorporated," "company," "limited"
or the abbreviations therefor for a similar word or abbreviation
or by adding, deleting or changing a geographic designation in
the name; (5) make any other change expressly permitted by the
North Carolina Business Corporation Act to be made without
shareholder action. All other amendments to the Articles of
Incorporation must be approved by the appropriate voting group or
groups as required by law.
Section 12 The provisions of these Bylaws are subject in all respects to the
provisions of the Shareholders Agreement and the Articles of
Incorporation. In the event of any conflict between any
provision of these Bylaws and any provision of the Shareholders
Agreement or the Articles of Incorporation, the applicable
provisions of the Shareholders Agreement and the Articles of
Incorporation shall control.
22