BYLAWS
OF
THE COBALT GROUP, INC.
SECTION 1
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
1.1 ANNUAL MEETING. The annual meeting of the shareholders of this
corporation (the "Corporation") for the election of directors and for the
transaction of such other business as may properly come before the meeting shall
be held each year at the principal office of the Corporation, or at some other
place either within or without the State of Washington as designated by the
Board of Directors, on such day and time as may be set by the Board of
Directors.
1.2 SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes may be called at any time by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or a Co-Chief Executive
Officer, a majority of the Board of Directors, or any shareholder or
shareholders holding in the aggregate one-fourth of the voting power of all
shareholders. The meetings shall be held at such time and place as the Board of
Directors may prescribe, or, if not held upon the request of the Board of
Directors, at such time and place as may be established by the Chief Executive
Officer or a Co-Chief Executive Officer or by the Secretary in such Chief
Executive Officer's absence. Only business within the purpose or purposes
described in the meeting notice may be conducted.
1.3 NOTICE OF MEETINGS. Written notice of the place, date and time of
the annual shareholders' meeting and written notice of the place, date, time and
purpose or purposes of special shareholders' meetings shall be delivered not
less than 10 (or, if required by Washington law, 20) or more than 60 days before
the date of the meeting, either personally, by facsimile, or by mail, or in any
other manner approved by law, by or at the direction of the Chairman of the
Board, the Chief Executive Officer or a Co-Chief Executive Officer or the
Secretary, to each shareholder of record entitled to notice of such meeting.
Mailed notices shall be deemed to be delivered when deposited in the mail,
first-class postage prepaid, correctly addressed to the shareholder's address
shown in the Corporation's current record of shareholders.
1.4 WAIVER OF NOTICE. Except where expressly prohibited by law or
the Articles of Incorporation, notice of the place, date, time and purpose or
purposes of any shareholders'
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meeting may be waived in a signed writing delivered to the Corporation by any
shareholder at any time, either before or after the meeting. Attendance at the
meeting in person or by proxy 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. A
shareholder waives objection to consideration of a particular matter at a
meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
1.5 SHAREHOLDERS' ACTION WITHOUT A MEETING. Any action that may be
taken at a meeting of the shareholders may be taken without a meeting or a vote
if (i) the action is taken by written consent delivered to the Corporation of
all shareholders entitled to vote on the action or (ii) the action is taken by
written consent delivered to the Corporation by the shareholders of the
Corporation holding of record, or otherwise entitled to vote, in the aggregate
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote on the
action were present and voted. A notice of the taking of action by shareholders
by less than unanimous written consent shall be mailed at least one business
day, or such longer period as is required by law, prior to the date the action
becomes effective to those shareholders entitled to vote on the action who have
not consented in writing, and, if required by law that notice of a meeting of
shareholders to consider the action be given to nonvoting shareholders, to all
nonvoting shareholders of the Corporation. Any such notice shall be in such form
as may be required by applicable law. Any consent delivered to the Corporation
pursuant to this Article shall be inserted in the minute book as if it were the
minutes of a meeting of the shareholders.
1.6 TELEPHONE MEETINGS. Shareholders may participate in a meeting of
shareholders by means of a conference telephone or any similar communications
equipment that enables all persons participating in the meeting to hear each
other during the meeting. Participation by such means shall constitute presence
in person at a meeting.
1.7 LIST OF SHAREHOLDERS. At least ten days before any shareholders'
meeting, the Secretary of the Corporation or the agent having charge of the
stock transfer books of the Corporation shall have compiled a complete list of
the shareholders entitled to notice of a shareholders' meeting, arranged in
alphabetical order and by voting group, with the address of each shareholder and
the number, class, and series, if any, of shares owned by each.
1.8 QUORUM AND VOTING. The presence in person or by proxy of the
holders of a majority of the votes entitled to be cast on a matter at a meeting
shall constitute a quorum of shareholders for that matter. If a quorum exists,
action on a matter shall be approved by a voting group if the votes cast within
a voting group favoring the action exceed the votes cast within the voting group
opposing the action, unless a greater number of affirmative votes is required by
the Articles of Incorporation or by law. If the Articles of Incorporation or
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Washington law provide for voting by two or more voting groups on a matter,
action on a matter is taken only when voted upon by each of those voting groups
counted separately. Action may be taken by one voting group on a matter even
though no action is taken by another voting group.
1.9 ADJOURNED MEETINGS. If a shareholders' meeting is adjourned to a
different place, date or time, whether for failure to achieve a quorum or
otherwise, notice need not be given of the new place, date or time if the new
place, date or time is announced at the meeting before adjournment. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in these Bylaws, that determination shall apply to any
adjournment thereof, unless Washington law requires fixing a new record date. If
Washington law requires that a new record date be set for the adjourned meeting,
notice of the adjourned meeting must be given to shareholders as of the new
record date. Any business may be transacted at an adjourned meeting that could
have been transacted at the meeting as originally called.
1.10 PROXIES.
1.10.1 APPOINTMENT. Each shareholder entitled to vote at
a meeting of shareholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act for
such shareholder by proxy. Such authorization may be accomplished by (a) the
shareholder or such shareholder's authorized officer, director, employee or
agent executing a writing or causing his or her signature to be affixed to such
writing by any reasonable means, including facsimile signature or (b) by
transmitting or authorizing the transmission of a telegram, cablegram or other
means of electronic transmission to the intended holder of the proxy or to a
proxy solicitation firm, proxy support service or similar agent duly authorized
by the intended proxy holder to receive such transmission; provided, that any
such telegram, cablegram or other electronic transmission must either set forth
or be accompanied by information from which it can be determined that the
telegram, cablegram or other electronic transmission was authorized by the
shareholder. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission by which a shareholder has
authorized another person to act as proxy for such shareholder may be
substituted or used in lieu of the original writing or transmission for any and
all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or transmission.
1.10.2 DELIVERY TO CORPORATION; DURATION. A proxy shall
be filed with the Secretary before or at the time of the meeting or the delivery
to the corporation of the consent to corporation action in writing. A proxy
shall become invalid three years after the date of its execution unless
otherwise provided in the proxy. A proxy with respect to a specified meeting
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shall entitle the holder thereof to vote at any reconvened meeting following
adjournment of such meeting but shall not be valid after the final adjournment
thereof.
1.11 BUSINESS FOR SHAREHOLDERS' MEETINGS.
1.11.1 BUSINESS AT ANNUAL MEETINGS. In addition to the
election of directors, other proper business may be transacted at an annual
meeting of shareholders, provided that such business must be properly brought
before such meeting. To be properly brought before an annual meeting, business
must be (a) brought by or at the direction of the Board or (b) brought before
the meeting by a shareholder pursuant to written notice thereof, in accordance
with section 1.3 hereof, and received by the Secretary not fewer than 60 nor
more than 90 days prior to the date specified for such annual meeting (or if
less than 60 days' notice or prior to public disclosure of the date of the
annual meeting is given or made to the shareholders, not later than the tenth
day following the day on which the notice of the date of the annual meeting was
mailed or such public disclosure was made). No business shall be conducted at
any annual meeting of shareholders except in accordance with this section 1.11,
unless the application of this section 1.11 to a particular matter is waived in
writing by the Board of Directors. If the facts warrant, the Board, or the
chairman of an annual meeting of shareholders, may determine and declare that
(a) a proposal does not constitute proper business to be transacted at the
meeting or (b) business was not properly brought before the meeting in
accordance with the provisions of this section 1.11 and, if, it is so determined
in either case, any such business shall not be transacted. The procedures set
forth in this section 1.11 for business to be properly brought before an annual
meeting by a shareholder are in addition to, and not in lieu of, the
requirements set forth in Rule 14a-8 under Section 14 of the Securities Exchange
Act of 1934, as amended, or any successor provision.
1.11.2 BUSINESS AT SPECIAL MEETINGS. At any special
meeting of the shareholders, only such business as is specified in the notice of
such special meeting given by or at the direction of the person or persons
calling such meeting, in accordance with section 1.2 hereof, shall come before
such meeting.
1.11.3 NOTICE TO CORPORATION. Any written notice required
to be delivered by a shareholder to the Corporation pursuant to section 1.2 or
section 1.3 hereof must be given, either by personal delivery or by registered
or certified mail, postage prepaid, to the Secretary at the Corporation's
executive offices. Any such shareholder notice shall set forth (i) the name and
address of the shareholder proposing such business; (ii) a representation that
the shareholder is entitled to vote at such meeting and a statement of the
number of shares of the Corporation that are beneficially owned by the
shareholder; (iii) a representation that the stockholder intends to appear in
person or by proxy at the meeting to propose such business; and (iv) as to each
matter the shareholder proposes to bring before the meeting, a brief
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description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting, the language of the
proposal (if appropriate), and any material interest of the shareholder in such
business.
1.12 INSPECTORS OF ELECTION.
1.12.1 APPOINTMENT. In advance of any meeting of
shareholders after this Corporation has become a public company (as defined
below), the Board shall appoint one or more persons to act as inspectors of
election at such meeting and to make a written report thereof. The Board may
designate one or more persons to serve as alternate inspectors to serve in place
of any inspector who is unable or fails to act. If no inspector or alternate is
able to act at a meeting of shareholders, the chairman of such meeting shall
appoint one or more persons to act as inspector of elections at such meeting.
This corporation shall be a "public company" upon the earliest of (a) a vote by
the Board of Directors of the corporation designating the Corporation a public
company, (b) when a registration statement filed by the corporation under the
Securities Act of 1933, as amended, in connection with an offering of the
corporation's securities to the public first becomes effective or (c) upon the
effective date of the registration of the Corporation's securities pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.
1.12.2 DUTIES. The inspectors of election shall:
(a) ascertain the number of shares of the
Corporation outstanding and the voting power of each such share;
(b) determine the shares represented at the
meeting and the validity of proxies and ballots;
(c) count all votes and ballots;
(d) determine and retain for a reasonable period
of time a record of the disposition of any challenges made to any
determination by them; and
(e) certify their determination of the number of
shares represented at the meeting and their count of the votes and
ballots.
The validity of any proxy or ballot shall be determined by the
inspectors of election in accordance with the applicable provisions of these
Bylaws and the Washington Business Corporation Act as then in effect. In
determining the validity of any proxy transmitted by telegram, cablegram or
other electronic transmission, the inspectors shall record in writing the
information upon which they relied in making such determination. Each inspector
of elections
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shall, before entering upon the discharge of his or her duties, take and sign an
oath to faithfully execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors of election may
appoint or retain other persons or entities to assist them in the performance of
their duties.
SECTION 2
BOARD OF DIRECTORS
2.1 NUMBER AND QUALIFICATION. The business affairs and property of
the Corporation shall be managed under the direction of a Board of Directors,
the number of members of which shall be as set by resolution of the Board of
Directors. The Board of Directors may increase or decrease this number by
resolution. A decrease in the number of directors shall not shorten the term of
an incumbent director.
2.2 ELECTION - TERM OF OFFICE. The directors shall be elected by the
shareholders at each annual shareholders' meeting in accordance with the
Articles of Incorporation. Despite the expiration of a director's term, the
director continues to serve until his or her successor is elected and qualified
or until there is a decrease in the authorized number of directors.
2.3 RESIGNATION; REMOVAL. Any Director may resign at any time by
delivering written notice to the Chairman of the Board, the Chief Executive
Officer or a Co-Chief Executive Officer, President, the Secretary or the Board,
or to the registered office of the corporation. Any such resignation shall take
effect at the time specified therein, or if the time is not specified, upon
delivery thereof and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. One or more members of
the Board (including the entire Board) may be removed, but only for cause, at a
meeting of shareholders called expressly for that purpose, by the holders of not
less than a majority of the shares entitled to elect the Director or Directors
whose removal is sought in the manner provided by these Bylaws.
2.4 VACANCIES. Except as otherwise provided by law, vacancies in the
Board of Directors, whether caused by resignation, death, retirement,
disqualification, removal, increase in the number of directors, or otherwise,
may be filled for the remainder of the term by the Board of Directors, by the
shareholders, or, if the directors in office constitute less than a quorum of
the Board of Directors, by an affirmative vote of a majority of the remaining
directors. The term of a director elected to fill a vacancy expires at the next
shareholders' meeting at which such director is to be elected. A vacancy that
will occur at a specific later date may be filled before the vacancy occurs, but
the new director may not take office until the vacancy occurs.
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2.5 QUORUM AND VOTING. At any meeting of the Board of Directors, the
presence in person (including presence by electronic means such as a telephone
conference call) of a majority of all directors presently in office shall
constitute a quorum for the transaction of business. If a quorum is present at
the time of a vote, the affirmative vote of a majority of the directors present
at the time of the vote shall be the act of the Board of Directors and of the
Corporation except as may be otherwise specifically provided by the Articles of
Incorporation, by these Bylaws, or by law. A director who is present at a
meeting of the Board of Directors when action is taken is deemed to have
assented to the action taken unless: (a) the director objects at the beginning
of the meeting, or promptly upon his or her arrival, to holding it or to
transacting business at the meeting; (b) the director's dissent or abstention
from the action taken is entered in the minutes of the meeting; or (c) the
director delivers written notice of his or her dissent or abstention to the
presiding officer of the meeting before its adjournment or to the Corporation
within a reasonable time after adjournment of the meeting. The right of dissent
or abstention is not available to a director who votes in favor of the action
taken.
2.6 REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such place, date and time as shall from time to time be fixed
by resolution of the Board.
2.7 SPECIAL MEETINGS. Special meetings of the Board of Directors may
be held at any place and at any time and may be called by the Chairman of the
Board, the Chief Executive Officer or a Co-Chief Executive Officer, Vice
President, Secretary or Treasurer, or any two or more directors.
2.8 NOTICE OF MEETINGS. Unless the Articles of Incorporation provide
otherwise, any regular meeting of the Board of Directors may be held without
notice of the date, time, place, or purpose of the meeting. Any special meeting
of the Board of Directors must be preceded by at least two days' notice of the
date, time, and place of the meeting, but not of its purpose, unless the
Articles of Incorporation or these Bylaws require otherwise. Notice may be given
personally, by facsimile or other form of electronic transmission, by mail, or
in any other manner allowed by law. Oral notice shall be sufficient only if a
written record of such notice is included in the Corporation's minute book.
Notice shall be deemed effective at the earliest of: (a) receipt; (b) delivery
to the proper address or telephone number of the director as shown in the
Corporation's records; or (c) five days after its deposit in the United States
mail, as evidenced by the postmark, if correctly addressed and mailed with
first-class postage prepaid. Notice of any meeting of the Board of Directors may
be waived by any director at any time, by a signed writing, delivered to the
Corporation for inclusion in the minutes, either before or after the meeting.
Attendance or participation by a director at a meeting shall constitute a waiver
of any required notice of the meeting unless the director promptly objects to
holding the meeting or to the transaction of any business on the grounds that
the meeting was not lawfully convened and the director does not thereafter vote
for or assent to action taken at the meeting.
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2.9 DIRECTORS' ACTION WITHOUT A MEETING. The Board of Directors or a
committee thereof may take any action without a meeting that it could properly
take at a meeting if one or more written consents setting forth the action are
signed by all of the directors, or all of the members of the committee, as the
case may be, either before or after the action is taken, and if the consents are
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. Such action shall be effective upon the signing of a consent
by the last director to sign, unless the consent specifies a later effective
date.
2.10 COMMITTEES OF THE BOARD OF DIRECTORS.
2.10.1 CREATION AND AUTHORITY. The Board of Directors, by
resolutions adopted by a majority of the members of the Board of Directors in
office, may create from among its members one or more committees and shall
appoint the members thereof. Each such committee must have two or more members,
who shall be directors and who shall serve at the pleasure of the Board of
Directors. Each committee of the Board of Directors may exercise the authority
of the Board of Directors to the extent provided in its enabling resolution and
any pertinent subsequent resolutions adopted in like manner, provided that the
authority of each such committee shall be subject to applicable law. Each
committee of the Board of Directors shall keep regular minutes of its
proceedings and shall report to the Board of Directors when requested to do so.
2.10.2 AUDIT COMMITTEE. In addition to any committees
appointed pursuant to this section 2.10, no later than such time as this
Corporation may become a public company there shall be an Audit Committee,
appointed annually by the Board, consisting of at least two Directors who are
not members of management and are independent members of the Board. It shall be
the responsibility of the Audit Committee, if and when appointed, to review the
scope and results of the annual independent audit of books and records of the
corporation, to review compliance with all corporate policies which have been
approved by the Board and to discharge such other responsibilities as may from
time to time be assigned to it by the Board. The Audit Committee shall meet at
such times and places as the members deem advisable, and shall make such
recommendations to the Board as they consider appropriate.
2.10.3 COMPENSATION COMMITTEE. The Board may, in its
discretion, designate a Compensation Committee consisting of one or more
Directors as it may from time to time determine. The duties of the Compensation
Committee shall consist of the following: (a) to establish and review
periodically, but not less than annually, the compensation of the officers of
the Corporation and to make recommendations concerning such compensation to the
Board; (b) to consider incentive compensation plans for the employees of the
Corporation; (c) to carry out the duties assigned to the Compensation Committee
under any stock option plan or other plan approved by the Corporation; (d) to
consult with the Chief Executive Officer or a Co-Chief Executive Officer
concerning any compensation matters deemed appropriate by such
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Chief Executive Officer or the Compensation Committee; and (e) to perform such
other duties as shall be assigned to the Compensation Committee by the Board.
2.11 TELEPHONE MEETINGS. Members of the Board of Directors or of any
committee appointed by the Board of Directors may participate in a meeting of
the Board of Directors or committee by means of a conference telephone or
similar communications equipment that enables all persons participating in the
meeting to hear each other during the meeting. Participation by such means shall
constitute presence in person at a meeting.
2.12 COMPENSATION OF DIRECTORS. The Board of Directors may fix the
compensation of directors as such and may authorize the reimbursement of their
expenses.
SECTION 3
OFFICERS
3.1 OFFICERS ENUMERATED - ELECTION. The officers of the Corporation
shall consist of such officers and assistant officers as may be designated by
resolution of the Board of Directors. The officers may include a Chairman of the
Board, a Chief Executive Officer or Co-Chief Executive Officers, one or more
Vice Presidents, a Secretary, a Treasurer, and any assistant officers. The
officers shall hold office at the pleasure of the Board of Directors. Unless
otherwise restricted by the Board of Directors, a Chief Executive Officer or a
Co-Chief Executive Officer, may appoint any assistant officer, the Secretary may
appoint one or more Assistant Secretaries, and the Treasurer may appoint one or
more Assistant Treasurers; provided that any such appointments shall be recorded
in writing in the corporate records.
3.2 QUALIFICATIONS. None of the officers of the Corporation need be a
director. Any two or more corporate offices may be held by the same person.
3.3 DUTIES OF THE OFFICERS. Unless otherwise prescribed by the Board
of Directors, the duties of the officers shall be as follows:
CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one is elected, shall be a non-executive officer position. The Chairman of the
Board shall preside at meetings of the Board of Directors and of the
shareholders, shall be responsible for carrying out the plans and directives of
the Board of Directors, shall report to and consult with the Board of Directors.
The Chairman of the Board shall have such other powers and duties as the Board
of Directors may from time to time prescribe.
CHIEF EXECUTIVE OFFICER AND CO-CHIEF EXECUTIVE
OFFICER. The Chief Executive Officer or a Co-Chief Executive Officer shall
exercise the usual executive powers
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pertaining to the office of the President and the Chief Executive Officer of the
Company. In the absence of a Chairman of the Board, the Chief Executive Officer
or a Co-Chief Executive Officer shall preside at meetings of the Board of
Directors and of the shareholders, perform the other duties of the Chairman of
the Board prescribed in this Section, and perform such other duties as the Board
of Directors may from time to time designate. In addition, if there is no
Secretary in office, the Chief Executive Officer or a Co-Chief Executive Officer
shall perform the duties of the Secretary.
VICE PRESIDENT. Each Vice President shall perform
such duties as the Board of Directors may from time to time designate. In
addition, the Vice President, or if there is more than one, the most senior Vice
President available, shall act as President in the absence or disability of the
President.
SECRETARY. The Secretary shall be responsible for
and shall keep, personally or with the assistance of others, records of the
proceedings of the directors and shareholders; authenticate records of the
Corporation; attest all certificates of stock in the name of the Corporation;
keep the corporate seal, if any, and affix the same to certificates of stock and
other proper documents; keep a record of the issuance of certificates of stock
and the transfers of the same; and perform such other duties as the Board of
Directors may from time to time designate.
TREASURER. The Treasurer shall have the care and
custody of, and be responsible for, all funds and securities of the Corporation
and shall cause to be kept regular books of account. The Treasurer shall cause
to be deposited all funds and other valuable effects in the name of the
Corporation in such depositories as may be designated by the Board of Directors.
In general, the Treasurer shall perform all of the duties incident to the office
of Treasurer, and such other duties as from time to time may be assigned by the
Board of Directors.
ASSISTANT OFFICERS. Assistant officers may consist
of one or more Assistant Vice Presidents, one or more Assistant Secretaries, and
one or more Assistant Treasurers. Each assistant officer shall perform those
duties assigned to him or her from time to time by the Board of Directors, the
Chief Executive Officer or a Co-Chief Executive Officer, or the officer who
appointed him or her.
3.4 VACANCIES. Vacancies in any office arising from any cause may be
filled by the Board of Directors at any regular or special meeting.
3.5 REMOVAL. Any officer or agent may be removed by action of the Board
of Directors with or without cause, but any removal shall be without prejudice
to the contract
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rights, if any, of the person removed. Election or appointment of an officer or
agent shall not of itself create any contract rights.
3.6 COMPENSATION. The compensation of all officers of the Corporation
shall be fixed by the Board of Directors or the Compensation Committee of the
Board, as determined by the Board.
SECTION 4
SHARES AND CERTIFICATES OF SHARES
4.1 SHARE CERTIFICATES. Share certificates shall be issued in numerical
order, and each shareholder shall be entitled to a certificate signed by a
Co-Chief Executive Officer, or a Vice President, and attested by the Secretary
or an Assistant Secretary. Share certificates may be sealed with the corporate
seal, if any. Facsimiles of the signatures and seal may be used as permitted by
law. Every share certificate shall state:
(a) the name of the Corporation;
(b) that the Corporation is organized under the laws of
the State of Washington;
(c) the name of the person to whom the share certificate
is issued;
(d) the number, class and series (if any) of shares that
the certificate represents; and
(e) if the Corporation is authorized to issue shares of
more than one class or series, that upon written request and without
charge, the Corporation will furnish any shareholder with a full
statement of the designations, preferences, limitations and relative
rights of the shares of each class or series, and the authority of the
Board of Directors to determine variations for future series.
4.2 CONSIDERATION FOR SHARES. Shares of the Corporation may be issued
for such consideration as shall be determined by the Board of Directors to be
adequate. The consideration for the issuance of shares may be paid in whole or
in part in cash, or in any tangible or intangible property or benefit to the
Corporation, including but not limited to promissory notes, services performed,
contracts for services to be performed, or other securities of the Corporation.
Establishment by the Board of Directors of the amount of consideration received
or to be received for shares of the Corporation shall be deemed to be a
determination that the consideration so established is adequate.
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4.3 TRANSFERS. The transfer of shares of the Corporation shall be
made only on the stock transfer books of the Corporation pursuant to
authorization or document of transfer made by the holder of record thereof or by
his or her legal representative, who shall furnish proper evidence of authority
to transfer, or by his or her attorney-in-fact authorized by power of attorney
duly executed and filed with the Secretary of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificates for a like number of
shares shall have been surrendered and canceled.
4.4 LOSS OR DESTRUCTION OF CERTIFICATES. In the event of the loss or
destruction of any certificate, a new certificate may be issued in lieu thereof
upon satisfactory proof of such loss or destruction, and upon the giving of
security against loss to the Corporation by bond, indemnity or otherwise, to the
extent deemed necessary by the Board of Directors, the Secretary, or the
Treasurer.
4.5 FIXING RECORD DATE. The Board of Directors may fix in advance a
date as the record date for determining shareholders entitled: (i) to notice of
or to vote at any shareholders' meeting or any adjournment thereof; (ii) to
receive payment of any share dividend; or (iii) to receive payment of any
distribution. The Board of Directors may in addition fix record dates with
respect to any allotment of rights or conversion or exchange of any securities
by their terms, or for any other proper purpose, as determined by the Board of
Directors and by law. The record date shall be not more than 70 days and, in
case of a meeting of shareholders, not less than 10 days (or such longer period
as may be required by Washington law) prior to the date on which the particular
action requiring determination of shareholders is to be taken. If no record date
is fixed for determining the shareholders entitled to notice of or to vote at a
meeting of shareholders, the record date shall be the date before the day on
which notice of the meeting is mailed. If no record date is fixed for the
determination of shareholders entitled to a distribution (other than one
involving a purchase, redemption, or other acquisition of the Corporation's own
shares), the record date shall be the date on which the Board adopted the
resolution declaring the distribution. If no record date is fixed for
determining shareholders entitled to a share dividend, the record date shall be
the date on which the Board of Directors authorized the dividend.
SECTION 5
BOOKS, RECORDS AND REPORTS
5.1 RECORDS OF CORPORATE MEETINGS, ACCOUNTING RECORDS AND SHARE
REGISTERS. The Corporation shall keep, as permanent records, minutes of all
meetings of the Board of Directors and shareholders, and all actions taken
without a meeting, and all actions taken by a committee exercising the authority
of the Board of Directors. The Corporation or its agent
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shall maintain, in a form that permits preparation of a list, a list of the
names and addresses of its shareholders, in alphabetical order by class of
shares, and the number, class, and series, if any, of shares held by each.
The Corporation shall also maintain appropriate accounting records, and at
its principal place of business shall keep copies of: (a) its Articles of
Incorporation or restated Articles of Incorporation and all amendments in
effect; (b) its Bylaws or restated Bylaws and all amendments in effect; (c)
minutes of all shareholders' meetings and records of all actions taken
without meetings for the past three years; (d) the year-end balance sheets
and income statements for the past three fiscal years, prepared as required
by Washington law; (e) all written communications to shareholders generally
in the past three years; (f) a list of the names and business addresses of
its current officers and directors; and (g) its most recent annual report to
the Secretary of State.
5.2 COPIES OF CORPORATE RECORDS. Any person dealing with the
Corporation may rely upon a copy of any of the records of the proceedings,
resolutions, or votes of the Board of Directors or shareholders, when certified
by the Chairman of the Board, the Chief Executive Officer or a Co-Chief
Executive Officer, Vice President, Secretary or Assistant Secretary.
5.3 EXAMINATION OF RECORDS. A shareholder shall have the right to
inspect and copy, during regular business hours at the principal office of the
Corporation, in person or by his or her attorney or agent, the corporate records
referred to in the last sentence of Section 5.1 of these Bylaws if the
shareholder gives the Corporation written notice of the demand at least five
business days before the date on which the shareholder wishes to make such
inspection. In addition, if a shareholder's demand is made in good faith and for
a proper purpose, a shareholder may inspect and copy, during regular business
hours at a reasonable location specified by the Corporation, excerpts from
minutes of any meeting of the Board of Directors, records of any action of a
committee of the Board of Directors, records of actions taken by the Board of
Directors without a meeting, minutes of shareholders' meetings held or records
of action taken by shareholders without a meeting not within the past three
years, accounting records of the Corporation, or the record of shareholders;
provided that the shareholder shall have made a demand describing with
reasonable particularity the shareholder's purpose and the records the
shareholder desires to inspect, and provided further that the records are
directly connected to the shareholder's purpose. This section shall not affect
any right of shareholders to inspect records of the Corporation that may be
otherwise granted to the shareholders by law.
5.4 FINANCIAL STATEMENTS. Not later than four months after the end of
each fiscal year, or in any event prior to its annual meeting of shareholders,
the Corporation shall prepare a balance sheet and income statement in accordance
with Washington law. The Corporation shall furnish a copy of each to any
shareholder upon written request.
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SECTION 6
FISCAL YEAR
The fiscal year of the Corporation shall end on December 31.
SECTION 7
CORPORATE SEAL
The corporate seal of the Corporation, if any, shall be in the form
approved by the Board of Directors.
SECTION 8
MISCELLANEOUS PROCEDURAL PROVISIONS
The Board of Directors may adopt rules of procedure to govern any
meetings of shareholders or directors to the extent not inconsistent with law,
the Corporation's Articles of Incorporation, or these Bylaws, as they are in
effect from time to time. In the absence of any rules of procedure adopted by
the Board of Directors, the chairman of the meeting shall make all decisions
regarding the procedures for any meeting.
SECTION 9
AMENDMENT OF BYLAWS
The Board of Directors is expressly authorized to make, alter and
repeal the Bylaws of the Corporation, subject to the power of the shareholders
of the Corporation to change or repeal the Bylaws.
SECTION 10
INDEMNIFICATION OF DIRECTORS AND OTHERS
10.1 GRANT OF INDEMNIFICATION. Subject to Section 10.2, each person who
was or is made a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any threatened, pending, or
completed action, suit or proceeding, whether formal or informal, civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she is or was a director of the Corporation or
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who, while a director of the Corporation, is or was serving at the request of
the Corporation as a director, officer, employee or agent of this or another
Corporation or of a partnership, joint venture, trust, other enterprise, or
employee benefit plan, whether the basis of such proceeding is alleged action in
an official capacity as a director or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent permitted by applicable law, as then in
effect, against all expense, liability and loss (including attorneys' fees,
costs, judgments, fines, ERISA excise taxes or penalties and amounts to be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith, and such indemnification shall continue as to a person who has ceased
to be a director and shall inure to the benefit of his or her heirs, executors
and administrators.
10.2 LIMITATIONS ON INDEMNIFICATION. Notwithstanding Section 10.1, no
indemnification shall be provided hereunder to any such person to the extent
that such indemnification would be prohibited by the Washington Business
Corporation Act or other applicable law as then in effect, nor, except as
provided in Section 10.4 with respect to proceedings seeking to enforce rights
to indemnification, shall the Corporation indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person except where such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation.
10.3 ADVANCEMENT OF EXPENSES. The right to indemnification conferred in
this section shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition,
except where the Board of Directors shall have adopted a resolution expressly
disapproving such advancement of expenses.
10.4 RIGHT TO ENFORCE INDEMNIFICATION. If a claim under Section 10.1 is
not paid in full by the Corporation within 60 days after a written claim has
been received by the Corporation, or if a claim for expenses incurred in
defending a proceeding in advance of its final disposition authorized under
Section 10.3 is not paid within 20 days after a written claim has been received
by the Corporation, the claimant may at any time thereafter bring suit against
the Corporation to recover the unpaid amount of the claim and, to the extent
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. The claimant shall be presumed to be
entitled to indemnification hereunder upon submission of a written claim (and,
in an action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition, where the required undertaking
has been tendered to the Corporation), and thereafter the Corporation shall have
the burden of proof to overcome the presumption that the claimant is so
entitled. It shall be a defense to any such action (other than an action with
respect to expenses authorized under Section 10.3) that the claimant has not met
the standards of conduct which make it permissible hereunder or under the
Washington Business Corporation Act for the Corporation to indemnify
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the claimant for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its shareholders) to have
made a determination prior to the commencement of such action that
indemnification of or reimbursement or advancement of expenses to the claimant
is proper in the circumstances because he or she has met the applicable standard
of conduct set forth herein or in the Washington Business Corporation Act nor
(except as provided in Section 10.3) an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
shareholders) that the claimant is not entitled to indemnification or to the
reimbursement or advancement of expenses shall be a defense to the action or
create a presumption that the claimant is not so entitled.
10.5 NONEXCLUSIVITY. The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this section shall be valid to the extent consistent with
Washington law.
10.6 INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS. The Corporation
may, by action of its Board of Directors from time to time, provide
indemnification and pay expenses in advance of the final disposition of a
proceeding to officers, employees and agents of the Corporation on the same
terms and with the same scope and effect as the provisions of this section with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation or pursuant to rights granted pursuant to, or
provided by, the Washington Business Corporation Act or on such other terms as
the Board may deem proper.
10.7 INSURANCE AND OTHER SECURITY. The Corporation may maintain
insurance, at its expense, to protect itself and any individual who is or was a
director, officer, employee or agent of the Corporation or another Corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against or incurred by the individual in that capacity or arising from
his or her status as an officer, director, agent, or employee, whether or not
the Corporation would have the power to indemnify such person against the same
liability under the Washington Business Corporation Act. The Corporation may
enter into contracts with any director or officer of the Corporation in
furtherance of the provisions of this section and may create a trust fund, grant
a security interest or use other means (including, without limitation, a letter
of credit) to ensure the payment of such amounts as may be necessary to effect
indemnification as provided in this section.
10.8 AMENDMENT OR MODIFICATION. This section may be altered or amended
at any time as provided in these Bylaws, but no such amendment shall have the
effect of diminishing the rights of any person who is or was an officer or
director as to any acts or omissions taken or omitted to be taken prior to the
effective date of such amendment.
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10.9 EFFECT OF SECTION. The rights conferred by this section shall be
deemed to be contract rights between the Corporation and each person who is or
was a director or officer. The Corporation expressly intends each such person to
rely on the rights conferred hereby in performing his or her respective duties
on behalf of the Corporation.
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