BY-LAWS
OF
AEHR TEST SYSTEMS
(As Amended on January 3, 2012)
ARTICLE I
CORPORATE OFFICES
1.1 PRINCIPAL OFFICE.
The board of directors shall fix the location of the
principal executive office of the corporation at any place within
or outside the State of California. If the principal executive
office is located outside such state, and the corporation has one
or more business offices in such state, the board of directors
shall fix and designate a principal business office in the State
of California.
1.2 OTHER OFFICES.
The board of directors may at any time establish branch or
subordinate offices at any place or places where the corporation
is qualified to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
2.1 PLACE OF MEETINGS.
Meetings of shareholders shall be held at any place within
or outside the State of California designated by the board of
directors. In the absence of any such designation, shareholders'
meetings shall be held at the principal executive office of the
corporation.
2.2 ANNUAL MEETING.
The annual meeting of shareholders shall be held each year
on a date and at a time designated by the board of directors. In
the absence of such designation, the annual meeting of
shareholders shall be held on the first Wednesday of October in
each year at 4:00 p.m. However, if such day falls on a legal
holiday, then the meeting shall be held at the same time and
place on the next succeeding full business day. At the meeting,
directors shall be elected, and any other proper business may be
transacted.
2.3 SPECIAL MEETING.
A special meeting of the shareholders may be called at any
time by the board of directors, or by the chairman of the board,
or by the president, or by one or more shareholders holding
shares in the aggregate entitled to cast not less than ten
percent (10%) of the votes at that meeting.
If a special meeting is called by any person or persons
other than the board of directors, the request shall be in
writing, specifying the time of such meeting and the general
nature of the business proposed to be transacted, and shall be
delivered personally or sent by registered mail or by telegraphic
or other facsimile transmission to the chairman of the board, the
president, any vice president or the secretary of the
corporation. The officer receiving the request shall cause
notice to be promptly given to the shareholders entitled to vote,
in accordance with the provisions of Sections 2.4 and 2.5 of
these by-laws, that a meeting will be held at the time requested
by the person or persons calling the meeting, not less than
thirty-five (35) nor more than sixty (60) days after the receipt
of the request. If the notice is not given within twenty (20)
days after receipt of the request, the person or persons
requesting the meeting may give the notice. Nothing contained in
this paragraph of this Section 2.3 shall be construed as
limiting, fixing or affecting the time when a meeting of
shareholders called by action of the board of directors may be
held.
2.4 NOTICE OF SHAREHOLDERS' MEETINGS.
All notices of meetings of shareholders shall be sent or
otherwise given in accordance with Section 2.5 of these by-laws
not less than ten (10) nor more than sixty (60) days before the
date of the meeting. The notice shall specify the place, date
and hour of the meeting and (i) in the case of a special meeting,
the general nature of the business to be transacted (no business
other than that specified in the notice may be transacted) or
(ii) in the case of the annual meeting, those matters which the
board of directors, at the time of giving the notice, intends to
present for action by the shareholders. The notice of any
meeting at which directors are to be elected shall include the
name of any nominee or nominees whom, at the time of the notice,
management intends to present for election.
If action is proposed to be taken at any meeting for
approval of (i) a contract or transaction in which a director has
a direct or indirect financial interest, pursuant to Section 310
of the Corporations Code of California (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 the Code, (iv) a
voluntary dissolution of the corporation, pursuant to
Section 1900 of the Code, or (v) 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
also state the general nature of that proposal.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
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 the shareholder at
the address of that shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for
the purpose of notice. If no such address appears on the
corporation's books or is
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given, notice shall be deemed to have
been given if sent to that shareholder by first-class mail or
telegraphic or other written communication to the corporation's
principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office
is located. Notice shall be deemed to have been given at the
time when delivered personally or deposited in the mail or sent
by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of
that shareholder appearing on the books of the corporation is
returned to the corporation by the United States Postal Service
marked to indicate that the United States Postal Service is
unable to deliver the notice to the shareholder at that address,
all future notices or reports shall be deemed to have been duly
given without further mailing if the same shall be available to
the shareholder on written demand of the shareholder at the
principal executive office of the corporation for a period of one
(1) year from the date of the giving of the notice.
An affidavit of the mailing or other means of giving any
notice of any shareholders' meeting, executed by the secretary,
assistant secretary or any transfer agent of the corporation
giving the notice, shall be prima facie evidence of the giving of
such notice.
2.6 QUORUM.
The presence in person or by proxy of the holders of a
majority of the shares entitled to vote thereat constitutes a
quorum for the transaction of business at all meetings of
shareholders. The shareholders present at a duly called or held
meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken
(other than adjournment) is approved by at least a majority of
the shares required to constitute a quorum.
2.7 ADJOURNED MEETING; NOTICE.
Any shareholders' meeting, annual or special, whether or
not a quorum is present, may be adjourned from time to time by
the vote of the majority of the shares represented at that
meeting, either in person or by proxy, but in the absence of a
quorum, no other business may be transacted at that meeting,
except as provided in Section 2.6 of these by-laws.
When any meeting of shareholders, either annual or special,
is adjourned to another time or place, notice need not be given
of the adjourned meeting if the time and place are announced at
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 notice of the
adjourned meeting shall be given. Notice of any such adjourned
meeting shall be given to each shareholder of record entitled to
vote at the adjourned meeting in accordance with the provisions
of Sections 2.4 and 2.5 of these by-laws. At any adjourned
meeting the corporation may transact any business which might
have been transacted at the original meeting.
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2.8 VOTING.
The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the
provisions of Section 2.11 of these by-laws, 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).
The shareholders' vote may be by voice vote or by ballot;
provided, however, that any election for directors must be by
ballot if demanded by any shareholder before the voting has
begun.
On any matter other than the election of directors, any
shareholder may vote part of 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 which the shareholder is voting affirmatively, it will
be conclusively presumed that the shareholder's approving vote is
with respect to all shares which the shareholder is entitled to
vote.
If a quorum is present, the affirmative vote of the
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 by the
articles of incorporation.
At a shareholders' meeting at which directors are to be
elected, no shareholder shall be entitled to cumulate votes (i.e.
cast for any one or more candidates a number of votes greater
than the number of the shareholder's shares) unless the
candidates' names have been placed in nomination prior to
commencement of the voting and a shareholder has given notice
prior to commencement of the voting of the shareholder's
intention to cumulate votes. If any shareholder has given such a
notice, then every shareholder entitled to vote may cumulate
votes for candidates placed in nomination and give one candidate
a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which that shareholder's
shares are entitled, or distribute the shareholder's votes on the
same principle among any or all of the candidates, as the
shareholder thinks fit. The candidates receiving the highest
number of votes, up to the number of directors to be elected,
shall be elected.
2.9 VALIDATION OF MEETINGS: WAIVER OF NOTICE; CONSENT.
The transactions of any meeting of shareholders, either
annual or special, however called and noticed, and wherever held,
shall be as valid as though had 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, who was not present in person or by
proxy, signs a written waiver of notice or a consent to the
holding of the meeting or an 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 the second paragraph of Section 2.4 of these by-
laws, the waiver of notice or consent shall state the general
nature of the proposal. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the
minutes of the meeting.
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Attendance by a person at a meeting shall also constitute a
waiver of notice of that meeting, except when the person objects,
at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened,
and except that attendance at a meeting is not a waiver of any
right to object to the consideration of a matter not included in
the notice of the meeting, if that objection is expressly made at
the meeting.
2.10 SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING.
Any action which may be taken at any annual or special
meeting of shareholders may be taken without a meeting and
without prior notice, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares
having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which
all shares entitled to vote on that action were present and
voted.
In the case of election of directors, such a consent shall
be effective only if signed by the holders of all outstanding
shares entitled to vote for the election of directors; provided,
however, that a director may be elected at any time to fill a
vacancy on the board of directors that has not been filled by the
directors, by the written consent of the holders of a majority of
the outstanding shares entitled to vote for the election of
directors.
All such consents shall be maintained in the corporate
records. Any shareholder giving a written consent, or the
shareholder's proxy holders, or a transferee of the shares, or a
personal representative of the shareholder, or their respective
proxy holders, may revoke the consent by a writing received by
the secretary of the corporation before written consents of the
number of shares required to authorize the proposed action have
been filed with the secretary.
If the consents of all shareholders entitled to vote have
not been solicited in writing, and if the unanimous written
consent of all such shareholders shall not have been received,
the secretary shall give prompt notice of the corporate action
approved by the shareholders without a meeting. Such notice
shall be given in the manner specified in Section 2.5 of these
by-laws. In the case of approval of (i) a contract or
transaction in which a director has a direct or indirect
financial interest, pursuant to Section 310 of the Code,
(ii) indemnification of a corporate "agent", 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.
2.11 RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS.
For purposes of determining the shareholders entitled to
notice of any meeting or to vote thereat or entitled to give
consent to corporate action without a meeting, the board of
directors may fix, in advance, a record date, which shall not be
more than sixty (60) days nor less than ten (10) days before the
date of any such meeting nor more than sixty (60) days before any
such action without a meeting, and in such event only
shareholders of record on the date so fixed are entitled to
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notice and to vote or to give consents, as the case may be,
notwithstanding any transfer of any shares on the books of the
corporation after the record date, except as otherwise provided
in the Code.
If the board of directors does not so fix a record date:
(a) the record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next
preceding the day on which the meeting is held; and
(b) the record date for determining shareholders
entitled to give consent to corporate action in writing without a
meeting, (i) when no prior action by the board has been taken,
shall be the day on which the first written consent is given or
(ii) when prior action by the board has been taken, shall be the
day on which the board adopts the resolution relating to that
action, or the sixtieth (60th) day before the date of such other
action, whichever is later.
The record date for any other purpose shall be as provided
in Article VIII of these by-laws.
2.12 PROXIES.
Every person entitled to vote for directors, or on any
other matter, shall have the right to do so either in person or
by one or more agents authorized by a written proxy signed by the
person and filed with the secretary of the corporation. A proxy
shall be deemed signed if the shareholder's name is placed on the
proxy (whether by manual signature, typewriting, telegraphic
transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. 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,
before the vote pursuant to that proxy, by a writing delivered to
the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and
voting in person by, the person executing the proxy or
(ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote
pursuant to that proxy is counted; provided, however, that no
proxy shall be valid after the expiration of eleven (11) months
from the date of the proxy, unless otherwise provided in the
proxy. The revocability of a proxy that states on its face that
it is irrevocable shall be governed by the provisions of
Sections 705(e) and 705(f) of the Code.
2.13 INSPECTORS OF ELECTION.
Before any meeting of shareholders, the board of directors
may appoint an inspector or inspectors of election to act at the
meeting or its adjournment. If no inspector of election is so
appointed, the chairman of the meeting may, and on the request of
any shareholder or a shareholder's proxy shall, appoint an
inspector or inspectors of election to act at the meeting. The
number of inspectors shall be either one (1) or three (3). If
inspectors are appointed at a meeting pursuant to the request of
one (1) 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
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of the meeting may, and upon the request of any shareholder or a
shareholder's proxy shall, appoint a person to fill that vacancy.
Such inspectors shall:
(a) Determine the number of shares outstanding and
the voting power of each, the number of shares represented at the
meeting, the existence of a quorum, and the authenticity,
validity and effect of proxies;
(b) Receive votes, ballots or consents;
(c) Hear and determine all challenges and questions
in any way arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct
the election or vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
3.1 POWERS.
Subject to the provisions of the Code and any limitations
in the articles of incorporation and these by-laws 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.
3.2 NUMBER AND QUALIFICATION OF DIRECTORS.
The number of directors of the corporation shall be not
less than four (4) nor more than seven (7). The exact number of
directors shall be seven (7) until changed, within the limits
specified above, by a by-law amending this Section 3.2, duly
adopted by the board of directors or by the shareholders. The
indefinite number of directors may be changed, or a definite
number fixed without provision for an indefinite number, by a
duly adopted amendment to this by-law duly adopted by the vote or
written consent of holders of a majority of the outstanding
shares entitled to vote; provided, however, that an amendment
reducing the number of the minimum number of directors to a
number less than five (5) cannot be adopted if the votes cast
against its adoption at a meeting of the shareholders, or the
shares not consenting in the case of action by written consent,
are equal to more than sixteen and two-thirds percent (16 2/3%)
of the outstanding shares entitled to
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vote thereon. No amendment may change the stated maximum number of
authorized directors to a number greater than two (2) times the
stated minimum number of directors minus one (1).
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS.
Directors shall be elected at each annual meeting of
shareholders to hold office until the next such annual meeting.
Each director, including a director elected to fill a vacancy,
shall hold office until the expiration of the term for which
elected and until a successor has been elected and qualified.
3.4 VACANCIES.
Vacancies in the board of directors may be filled by a
majority of the remaining directors, though 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 thereon 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 thereon. Each director so elected shall
hold office until the next annual meeting of the shareholders and
until a successor has been elected and qualified.
A vacancy or vacancies in the board of directors shall be
deemed to exist in the event of the death, resignation or removal
of any director, or if the board of directors by resolution
declares vacant the office of a director who has been declared of
unsound mind by an order of court or convicted of a felony, or if
the authorized number of directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any
director or directors are elected, to elect the number of
directors to be elected at that meeting.
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, if by written consent, shall
require the consent of the holders of a majority of the
outstanding shares entitled to vote thereon.
Any director may resign effective on giving written notice
to the chairman of the board, the president, the secretary or the
board of directors, unless the notice specifies a later time for
that resignation to become effective. If the resignation of a
director is effective at a future time, the board of directors
may elect a successor to take office when the resignation becomes
effective.
No reduction of the authorized number of directors shall
have the effect of removing any director before that director's
term of office expires.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE.
Regular meetings of the board of directors may be held at
any place within or outside the State of California that has been
designated from time to time by resolution of the board. In the
absence of such a designation, regular meetings shall be held at
the principal executive office of the corporation. Special
meetings of the board may be held at any place within or outside
the State of California that has been designated in the notice of
the meeting or, if not stated in the notice or if there is no
notice, at the principal executive office of the corporation.
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Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all
directors participating in the meeting can hear one another; and
all such directors shall be deemed to be present in person at the
meeting.
3.6 REGULAR MEETINGS.
Regular meetings of the board of directors may be held
without notice if the times of such meetings are fixed by the
board of directors.
3.7 SPECIAL MEETINGS.
Special meetings of the board of directors for any purpose
or purposes may be called at any time by the chairman of the
board, the president, any vice president, the secretary or any
two directors.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each director or sent by
first-class mail or telegram, charges prepaid, addressed to each
director at that director's address as it is shown on the records
of the corporation. If the notice is mailed, it shall be
deposited in the United States mail at least four (4) days before
the time of the holding of the meeting. If the notice is
delivered personally, or by telephone or telegram, it shall be
delivered personally or by telephone or to the telegraph company
at least forty-eight (48) hours before the time of the holding of
the meeting. Any oral notice given personally or by telephone
may be communicated either to the director or to a person at the
office of the director who the person giving the notice has
reason to believe will promptly communicate it to the director.
The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive
office of the corporation.
3.8 QUORUM.
A majority of the authorized number of directors shall
constitute a quorum for the transaction of business, except to
adjourn as provided in Section 3.10 of these by-laws. Every act
or decision done or made by a majority of the directors present
at a duly held meeting 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 (as to approval of
contracts or transactions in which a director has a direct or
indirect material financial interest), Section 311 of the Code
(as to appointment of committees) and Section 317(e) of the Code
(as to indemnification of directors).
A meeting at which a quorum is initially present may
continue to transact business notwithstanding the withdrawal of
directors, if any action taken is approved by at least a majority
of the required quorum for that meeting.
3.9 WAIVER OF NOTICE.
The transactions of any meeting of the board of directors,
however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice
if a quorum is present and if, 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
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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, before or at its commencement, the lack of
notice to that director.
3.10 ADJOURNMENT.
A majority of the directors present, whether or not
constituting a quorum, may adjourn any meeting to another time
and place.
3.11 NOTICE OF ADJOURNMENT.
Notice of the time and place of holding an adjourned
meeting need not be given, unless the meeting is adjourned for
more than twenty-four (24) hours, in which case notice of the
time and place shall be given before the time of the adjourned
meeting, in the manner specified in Section 3.7 of these by-laws,
to the directors who were not present at the time of the
adjournment.
3.12 ACTION WITHOUT MEETING.
Any action required or permitted to be taken by the board
of directors may be taken without a meeting, if all members of
the board shall individually or collectively consent in writing
to that action. Such action by written consent shall have the
same force and effect as a unanimous vote of the board of
directors. Such written consent and any counterparts thereof
shall be filed with the minutes of the proceedings of the board.
3.13 FEES AND COMPENSATION OF DIRECTORS.
Directors and members of committees may receive such
compensation, if any, for their services, and such reimbursement
of expenses, as may be fixed or determined by resolution of the
board of directors. This Section 3.13 shall not be construed to
preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise, and
receiving compensation for those services.
ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS.
The board of directors may, by resolution adopted by a
majority of the authorized number of directors, designate one (1)
or more committees, each consisting of two or more directors, to
serve at the pleasure of the board. The board may designate one
(1) or more directors as alternate members of any committee, who
may replace any absent member at any meeting of the committee.
Any committee, to the extent provided in the resolution of the
board, shall have all the authority of the board, except with
respect to:
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(a) the approval of any action which, under the
Code, also requires shareholders' approval or approval of the
outstanding shares;
(b) the filling of vacancies in the board of
directors or in any committee;
(c) the fixing of compensation of the directors for
serving on the board or any committee;
(d) the amendment or repeal of these by-laws or the
adoption of new by-laws;
(e) the amendment or repeal of any resolution of
the board of directors which by its express terms is not so
amendable or repealable;
(f) a distribution to the shareholders of the
corporation, except at a rate or in a periodic amount or within a
price range determined by the board of directors; or
(g) the appointment of any other committees of the
board of directors or the members of such committees.
4.2 MEETINGS AND ACTION OF COMMITTEES.
Meetings and actions of committees shall be governed by,
and held and taken in accordance with, the provisions of
Article III of these by-laws, Section 3.5 (place of meetings),
Section 3.6 (regular meetings), Section 3.7 (special meetings and
notice), Section 3.8 (quorum.), Section 3.9 (waiver of notice),
Section 3.10 (adjournment), Section 3.11 (notice of adjournment)
and Section 3.12 (action without meeting), with such changes in
the context of those by-laws as are necessary to substitute the
committee and its members for the board of directors and its
members, except that the time of regular meetings of committees
may be determined either by resolution of the board of directors
or by resolution of the committee; special meetings of committees
may also be called by resolution of the board of directors; and
notice of special meetings of committees shall also be given to
all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with
the provisions of these by-laws.
ARTICLE V
OFFICERS
5.1 OFFICERS.
The officers of the corporation shall be a president, a
secretary, and a chief financial officer. The corporation may
also have, at the discretion of the board of directors, a
chairman of the board, one or more vice presidents, one or more
assistant secretaries, one or more assistant treasurers, and such
other officers as may be appointed in accordance with the
provisions of Section 5.3 of these by-laws. Any number of
offices may be held by the same person.
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5.2 ELECTION OF OFFICERS.
The officers of the corporation, except such officers as
may be appointed in accordance with the provisions of Section 5.3
or Section 5.5 of these by-laws, shall be chosen by the board,
subject to the rights, if any, of an officer under any contract
of employment.
5.3 SUBORDINATE OFFICERS.
The board of directors may appoint, or may empower the
president to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are
provided in these by-laws or as the board of directors may from
time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS.
Subject to the rights, if any, of an officer under any
contract of employment, any officer may be removed, either with
or without cause, by the board of directors at any regular or
special meeting of the board or, except in case of an officer
chosen by the board of directors, by any officer upon whom such
power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice
to the corporation. Any resignation shall take effect at the
date of the receipt of that notice or at any later time specified
in that notice; and, unless otherwise specified in that notice,
the acceptance of the resignation shall not be necessary to make
it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which
the officer is a party.
5.5 VACANCIES IN OFFICES.
A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in
the manner prescribed in these by-laws for regular appointments
to that office.
5.6 CHAIRMAN OF THE BOARD.
The chairman of the board, if such an officer be elected,
shall, if present, preside at meetings of the board of directors
and exercise and perform such other powers and duties as may be
from time to time assigned to him by the board of directors or
prescribed by these by-laws. If there is no president, the
chairman of the board shall also be the chief executive officer
of the corporation and shall have the powers and duties
prescribed in Section 5.7 of these by-laws.
5.7 PRESIDENT.
Subject to such supervisory powers, if any, as 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 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
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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 these
bylaws.
5.8 VICE PRESIDENTS.
In the absence or disability of the president, the vice
presidents, if any, in order of their rank as fixed by the board
of directors or, if not ranked, a vice president designated by
the board of directors, shall perform all the duties of the
president and when so acting shall have all the powers of, and be
subject to all the restrictions upon, the president. The vice
presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them
respectively by the board of directors, these by-laws, the
president or the chairman of the board.
5.9 SECRETARY.
The secretary shall keep or cause to be kept, at the
principal executive office of the corporation, or such other
place as the board of directors may direct, a book of minutes of
all meetings and actions of directors, committees of directors,
and shareholders, with the time and place of holding, whether
regular or special (and, if special, how authorized and the
notice given), the names of those present at directors' meetings
or committee meetings, the number of shares present or
represented at shareholders' meetings, and the proceedings
thereof.
The secretary shall keep, or cause to be kept, at the
principal executive office of the corporation 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 and classes of shares held by
each, the number and date of certificates evidencing such shares,
and the number and date of cancellation of every certificate
surrendered for cancellation.
The secretary shall give, or cause to be given, notice of
all meetings of the shareholders and of the board of directors
required by these by-laws 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 these
by-laws.
5.10 CHIEF FINANCIAL OFFICER.
The chief financial officer shall keep and maintain, or
cause to be kept and maintained, adequate and correct books and
records of accounts of the properties and business transactions
of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital,
retained earnings, and shares. The books of account shall at all
reasonable times be open to inspection by any director.
The chief financial officer shall deposit all money 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 disburse the funds of the corporation as may
be ordered by the board of directors, shall render to the
president and directors, whenever they request it, an account of
all of his transactions as chief
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financial officer and of the
financial condition of the corporation, and shall have such other
powers and perform such other duties as may be prescribed by the
board of directors or these by-laws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, AND OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The corporation shall, to the maximum extent and in the
manner permitted by the Code, indemnify each of its directors and
officers against expenses (as defined in Section 317(a) of the
Code), judgments, fines, settlements, and other amounts actually
and reasonably incurred in connection with any proceeding (as
defined in Section 317(a) of the Code), arising by reason of the
fact that such person is or was an agent of the corporation. For
purposes of this Article VI, a "director" or "officer" of the
corporation includes any person (i) who is or was a director or
officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other
enterprise, or (iii) who was a director or officer of a
corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such
predecessor corporation.
6.2 INDEMNIFICATION OF OTHERS.
The corporation shall have the power, to the extent and in
the manner permitted by the Code, to indemnify each of its
employees and agents (other than directors and officers) against
expenses (as defined in Section 317(a) of the Code), judgments,
fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding (as defined in Section
317(a) of the Code), arising by reason of the fact that such
person is or was an agent of the corporation. For purposes of
this Article VI, an "employee" or "agent" of the corporation
(other than a director or officer) includes any person (i) who is
or was an employee or agent of the corporation, (ii) who is or
was serving at the request of the corporation as an employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise, or (iii) who was an employee or agent of a
corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such
predecessor corporation.
6.3 PAYMENT OF EXPENSES IN ADVANCE.
Expenses incurred in defending any civil or criminal action
or proceeding for which indemnification is required pursuant to
Section 6.1 or for which indemnification is permitted pursuant to
Section 6.2 following authorization thereof by the Board of
Directors shall be paid by the corporation in advance of the
final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of the indemnified party to repay
such amount if it shall ultimately be determined that the
indemnified party is not entitled to be indemnified as authorized
in this Article VI.
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6.4 INDEMNITY NOT EXCLUSIVE.
The indemnification provided by this Article VI shall not
be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote
of shareholders or disinterested directors or otherwise, both as
to action in an official capacity and as to action in another
capacity while holding such office, to the extent that such
additional rights to indemnification are authorized in the
Articles of Incorporation.
6.5 INSURANCE INDEMNIFICATION.
The corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation against
any liability asserted against or incurred by such person in such
capacity or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article VI.
6.6 CONFLICTS.
No indemnification or advance shall be made under this
Article VI, except where such indemnification or advance is
mandated by law or the order, judgment or decree of any court of
competent jurisdiction, in any circumstance where it appears:
(a) That it would be inconsistent with a provision
of the Articles of Incorporation, these bylaws, a resolution of
the shareholders or an agreement in effect at the time of the
accrual of the alleged cause of the 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.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF SHARE REGISTER.
The corporation shall keep at its principal executive
office, or at the office of its transfer agent or registrar, if
either be appointed and as determined by resolution of the board
of directors, a record of its shareholders, giving the names and
addresses of all shareholders and the number and class of shares
held by each shareholder.
A shareholder or shareholders of the corporation holding at
least five percent (5%) in the aggregate of the outstanding
voting shares of the corporation or who holds at least one
percent (1%) of such voting shares and has filed a Schedule 14B
with the Securities and Exchange Commission relating to the
election of directors, may (i) inspect and copy the records of
shareholders' names and addresses and shareholdings during usual
business hours on five (5) days' prior written demand on
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the corporation, (ii) obtain from the transfer agent of the
corporation, on written demand and on the tender of such transfer
agent's usual charges for such list, a list of the 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 that list has been compiled or as of
a date specified by the shareholder after the date of demand.
Such list shall be made available to any such shareholder by the
transfer agent on or before the later of five (5) days after the
demand is received or five (5) days after the date specified in
the demand as the date as of which the list is to be compiled.
The record of shareholders shall also be open to inspection
on the written demand of any shareholder or holder of a voting
trust certificate, at any time during usual business hours, for a
purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate.
Any inspection and copying under this Section 7.1 may be
made in person or by an agent or attorney of the shareholder or
holder of a voting trust certificate making the demand.
7.2 MAINTENANCE AND INSPECTION OF BY-LAWS.
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 such state,
the original or a copy of these by-laws as amended to date, which
bylaws shall be open to inspection by the shareholders at all
reasonable times during office hours. If the principal executive
office of the corporation is outside the State of California and
the corporation has no principal business office in such state,
the secretary shall, upon the written request of any shareholder,
furnish to that shareholder a copy of these by-laws as amended to
date.
7.3 MAINTENANCE AND INSPECTION OF OTHER CORPORATE
RECORDS.
The accounting books and records, and the 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 absence of such designation, at the principal executive
office of the corporation. The minutes shall be kept in written
form and the accounting books and records shall be kept either in
written form or in any other form capable of being converted into
written form.
The minutes and accounting books and records shall be open
to inspection upon the written demand of any shareholder or
holder of a voting trust certificate, at any reasonable time
during usual business hours, for a purpose reasonably related to
the holder's interests as a shareholder or as the holder of a
voting trust certificate. The inspection may be made in person
or by an agent or attorney, and shall include the right to copy
and make extracts. Such rights of inspection shall extend to the
records of each subsidiary corporation of the corporation.
7.4 INSPECTION BY DIRECTORS.
Every director shall have the absolute right at any
reasonable time to inspect all books, records and documents of
every kind and the physical properties of the corporation and
each of its
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subsidiary corporations. Such inspection by a
director may be made in person or by an agent or attorney, and
the right of inspection includes the right to copy and make
extracts of documents.
7.5 ANNUAL REPORT TO SHAREHOLDERS; WAIVER.
The board of directors shall cause an annual report to be
sent to the shareholders not later than one hundred twenty (120)
days after the close of the fiscal year adopted by the
corporation. Such report shall be sent at least fifteen (15)
days before the annual meeting of shareholders to be held during
the next fiscal year and in the manner specified in Section 2.5
of these by-laws for giving notice to shareholders of the
corporation.
The annual report shall contain a balance sheet as of the
end of the fiscal year and an income statement and statement of
changes in financial position for the fiscal year, accompanied by
any report of independent accountants or, if there is no such
report, the certificate of an authorized officer of the
corporation that the statements were prepared without audit from
the books and records of the corporation.
The foregoing requirement of an annual report may be waived
by the board so long as the shares of the corporation are held by
less than one hundred (100) holders of record.
7.6 FINANCIAL STATEMENTS.
A copy of any annual financial statement and any income
statement of the corporation for each quarterly period of each
fiscal year, and any accompanying balance sheet of the
corporation as of the end of each such period, that has been
prepared by the corporation shall be kept on file in the
principal executive office of the corporation for twelve (12)
months; and each such statement shall be exhibited at all
reasonable times to any shareholder demanding an examination of
any such statement or a copy shall be mailed to any such
shareholder.
If a shareholder or shareholders holding at least five
percent (5%) of the outstanding shares of any class of stock of
the corporation makes a written request to the corporation for an
income statement of the corporation for the three-month, six-
month or nine-month period of the then current fiscal year ended
more than thirty (30) days before the date of the request, and
for a balance sheet of the corporation as of the end of that
period, the chief financial officer shall cause that statement to
be prepared, if not already prepared, and shall deliver
personally or mail that statement or statements to the person
making the request within thirty (30) days after the receipt of
the request. If the corporation has not sent to the shareholders
its annual report for the last fiscal year, such report shall
likewise be delivered or mailed to the shareholder or
shareholders within thirty (30) days after the request.
The corporation shall also, on the written request of any
shareholder, mail to the shareholder a copy of the last annual,
semi-annual or quarterly income statement which it has prepared,
and a balance sheet as of the end of that period.
The quarterly income statements and balance sheets referred
to in this section shall be accompanied by the report, if any, of
any independent accountants engaged by the corporation or the
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certificate of an authorized officer of the corporation that the
financial statements were prepared without audit from the books
and records of the corporation.
ARTICLE VIII
GENERAL MATTERS
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND
VOTING.
For purposes of determining the shareholders entitled to
receive payment of any dividend or other distribution or
allotment of any rights or entitled to exercise any rights in
respect of any other lawful action (other than action by
shareholders by written consent without a meeting), the board of
directors may fix, in advance, a record date, which shall not be
more than sixty (60) days before any such action, and in that
case only shareholders of record on the date so fixed are
entitled to receive the dividend, distribution or allotment of
rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
corporation after the record date so fixed, except as otherwise
provided in the Code.
If the board of directors does not so fix a record date,
the record date for determining shareholders for any such purpose
shall be at the close of business on the day on which the board
adopts the applicable resolution or the sixtieth (60th) day
before the date of that action, whichever is later.
8.2 CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS.
All checks, drafts, or other orders for payment of money,
notes, or other evidences of indebtedness, issued in the name of
or payable to the corporation, shall be signed or endorsed by
such person or persons and in such manner as, from time to time,
shall be determined by resolution of the board of directors.
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED.
The board of directors, except as otherwise provided in
these by-laws, may authorize any officer or officers, or agent or
agents, 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; and, unless so
authorized or ratified by the board of directors or within the
agency power of an officer, no officer, agent or employee shall
have any power or authority to bind the corporation by any
contract or engagement or to pledge its credit or to render it
liable for any purpose or for any amount.
8.4 CERTIFICATES FOR SHARES.
A certificate or certificates for shares of the corporation
shall be issued to each shareholder when any of such shares are
fully paid, and the board of directors may authorize the issuance
of certificates or shares as partly paid provided that these
certificates shall state the amount of the consideration to be
paid for them and the amount paid. All certificates shall be
signed in the name of
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the corporation by the chairman or vice
chairman of the board or the president or a vice president and by
the chief financial officer or an assistant treasurer or the
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. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed on a
certificate has ceased to be that 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.
Nothwithstanding the foregoing paragraph, the corporation
may adopt a system of issuance, recordation and transfer of its
shares by electronic or other means not involving any issuance of
certificates, including provisions for notice to purchasers in
substitution for the required statements on certificates under
Sections 417, 418 and 1302 of the Code, and as may be required by
the commissioner in administering the California Corporate
Securities Law of 1968, which system (1) has been approved by the
United States Securities and Exchange Commission, (2) is
authorized in any statute of the United States, or (3) is in
accordance with Division 8 of the California Commercial Code.
Any system so adopted shall not become effective as to issued and
outstanding certificated securities until the certificates
therefor have been surrendered to the corporation.
8.5 LOST CERTIFICATES.
Except as provided in this Section 8.5, no new certificates
for shares shall be issued to replace a previously issued
certificate unless the latter is surrendered to the corporation
and cancelled at the same time. The board of directors may, in
case any share certificate or certificate for any other security
is lost, stolen or destroyed, authorize the issuance of
replacement certificates on such terms and conditions as the
board may require, including provision for indemnification of the
corporation secured by a bond or other adequate security
sufficient to protect the corporation against any claim that may
be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction of the
certificate or the issuance of the replacement certificate.
8.6 CONSTRUCTION AND DEFINITIONS.
Unless the context requires otherwise, the general
provisions, rules of construction and definitions in the Code
shall govern the construction of these by-laws. Without limiting
the generality of this provision, the singular number includes
the plural, the Plural number includes the singular, and the term
"person" includes both a corporation and a natural person.
ARTICLE IX
AMENDMENTS
9.1 AMENDMENT BY SHAREHOLDERS.
New by-laws may be adopted or these by-laws may be amended
or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided,
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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.
9.2 AMENDMENT BY DIRECTORS.
Subject to the rights of the shareholders as provided in
Section 9.1 of these by-laws, by-laws, other than a by-law or an
amendment of a by-law changing the authorized number of directors
(except to fix the authorized number of directors pursuant to a
by-law providing for a variable number of directors), may be
adopted, amended, or repealed by the board of directors.
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