EXHIBIT 3.3
BYLAWS
OF
NATIONAL TECHNICAL SYSTEMS, INC.
8.
OFFICES
PRINCIPAL OFFICES. 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
this state, and the corporation has one or more business offices in this state,
the board of directors shall likewise fix and designate a principal business
office in the State of California.
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.
9.
MEETINGS OF SHAREHOLDERS
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.
At the discretion of the board of directors, and subject to
such guidelines and procedures as the board of directors may adopt and as
are required by applicable law, the corporation may permit any shareholder
not physically present in person or by proxy at a meeting of shareholders
to participate in a meeting of the shareholders by electronic transmission
by and to the corporation or by electronic video screen communication, and
the shareholder shall be deemed by such participation to be present in
person or by proxy, and to vote at a meeting of shareholders.
Notwithstanding subsection 2.1(a) above, the corporation may
conduct any shareholder meeting, in whole or in part, by electronic
transmission by and to the corporation or by electronic video screen
communication provided (1) the corporation has obtained from the
shareholders the requisite consent under de of California, (2) the
corporation implements reasonable measures to provide shareholders (in
person or by proxy) a reasonable opportunity to participate in the meeting
and to vote on matters submitted to the shareholders, including an
opportunity to read or hear the proceedings of the meeting concurrently
with those proceedings, and (3) if any shareholder votes or takes other
action at the meeting by means of electronic transmission to the
corporation or electronic video screen communication, a record of that
vote or action is maintained by the corporation.
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ANNUAL MEETINGS OF SHAREHOLDERS.
The corporation shall hold its annual meeting of shareholders
each year at a time designated by the board of directors. At each annual
meeting, directors shall be elected and any other proper business may be
transacted.
Nominations of persons for election to the board of directors
of the corporation and the proposal of business to be transacted by the
shareholders may be made at an annual meeting of shareholders (i) pursuant
to the corporation's notice with respect to such meeting, (ii) by or at
the direction of the board of directors or (iii) by any shareholder of
record of the corporation who was a shareholder of record at the time of
the giving of the notice provided for in this Section 2.2, who is entitled
to vote at the meeting and who has complied with the notice procedures set
forth in this Section 2.2.
For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of
paragraph (b) of this Section 2.2, (i) the shareholder must have given
timely notice of the nominations or proposed business in writing to the
Secretary of the corporation, (ii) the business so proposed must be a
proper matter for shareholder action under the General Corporation Law of
the State of California, (iii) if the shareholder, or the beneficial owner
on whose behalf any such proposal or nomination is made, has provided the
corporation with a Solicitation Notice, as that term is defined in
subclause (iv)(3) of paragraph (d) of this Section 2.2, the shareholder or
beneficial owner must, in the case of a proposal, have delivered a proxy
statement and form of proxy to holders of at least the percentage of the
corporation's voting shares required under applicable law to carry any
such proposal, or, in the case of a nomination or nominations, have
delivered a proxy statement and form of proxy to holders of a percentage
of the corporation's voting shares reasonably believed by such shareholder
or beneficial holder to be sufficient to elect the nominee or nominees
proposed to be nominated by such shareholder, and must, in either case,
have included in such materials the Solicitation Notice and (iv) if no
Solicitation Notice relating thereto has been timely provided pursuant to
this Section 2.2, the shareholder or beneficial owner proposing such
business or nomination must not have solicited a number of proxies
sufficient to have required the delivery of such a Solicitation Notice
under paragraph (d) of this Section 2.2. To be timely, a shareholder's
notice must be delivered to the Secretary at the principal executive
offices of the corporation not less than 45 days nor more than 75 days
prior to the first anniversary (the "Anniversary") of the date on which
the corporation first mailed its proxy materials for the preceding year's
annual meeting of shareholders; provided, however, that if the date of the
annual meeting is advanced by more than 30 days prior to or delayed by
more than 30 days after the anniversary of the preceding year's annual
meeting, notice by the shareholder to be timely must be delivered not
later than the close of business on the later of the 90th day prior to
such annual meeting and the 10th day following the day on which public
announcement of the date of such meeting is first made by the corporation.
The shareholder's notice to be delivered pursuant to clause
(i) of paragraph (c) of this Section 2.2 shall set forth (i) as to each
person whom the shareholder proposes to nominate for election or
reelection as a director, all information relating to such person as would
be required to be disclosed in solicitations of proxies for election of
such nominees as directors pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and such person's
written consent to being named in the proxy
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statement as a nominee and to serve as a director if elected; (ii) as to
any other business that the shareholder proposes to bring before the
meeting, a brief description of such business, the reasons for conducting
such business at the meeting and any material interest in such business of
such shareholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (iv) as to the shareholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is
made (1) the name and address of such shareholder, as they appear on the
corporation's books, and of such beneficial owner, (2) the class and
number of shares of the capital stock of the corporation that are owned
beneficially and of record by such shareholder and such beneficial owner,
and (3) whether either such shareholder or beneficial owner intends to
deliver a proxy statement and form of proxy to holders of, in the case of
a proposal, at least the percentage of the corporation's voting shares
required under applicable law to carry the proposal or, in the case of a
nomination or nominations, a sufficient number of holders of the
corporation's voting shares to elect such nominee or nominees (an
affirmative statement of such intent, a "Solicitation Notice");
Notwithstanding anything in the second sentence of paragraph
(c) of this Section 2.2 to the contrary, in the event that the number of
directors to be elected to the board of directors is increased and there
is no public announcement naming all of the nominees for director or
specifying the size of the increased board of directors made by the
corporation at least 55 days prior to the Anniversary, a shareholder's
notice required by this Section 2.2 shall also be considered timely, but
only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal
executive office of the corporation not later than the close of business
on the 10th day following the day on which such public announcement is
first made by the corporation.
Only persons nominated in accordance with the procedures set
forth in these bylaws shall be eligible to serve as directors, and only
such business shall be conducted at an annual meeting of shareholders as
shall have been brought before the meeting in accordance with the
procedures set forth in these bylaws. The chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting has been made in accordance with
the procedures set forth in these bylaws and, if any proposed nomination
or business is not in compliance with these bylaws, to declare that such
defective proposed nomination or business shall not be presented for
shareholder action at the meeting and shall be disregarded.
For purposes of these bylaws, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or a comparable national news service or in a document
publicly filed by the corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of this Section 2.2,
a shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 2.2. Nothing in this Section 2.2 shall
be deemed to affect any rights of shareholders to request inclusion of
proposals in the corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act.
SPECIAL MEETINGS. A special meeting of 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
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shareholders holding shares in the aggregate entitled to cast not less than 10%
of the votes at any such 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 no other business shall be transacted. The notice 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 such request forthwith
shall cause notice to be given to the shareholders entitled to vote, in
accordance with the provisions of Sections 2.4 and 2.5 of this Article II, that
a meeting will be held at the time requested by the person or persons calling
the meeting, not less than thirty-five (35) nor more than sixty (60) days after
the receipt of the request. If the notice is not given within twenty (20) days
after receipt of the request, the person or persons requesting the meeting may
give the notice. Nothing contained in this paragraph of this Section 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.
Whenever the corporation gives notice that the election of a
director is to take place at a special meeting of shareholders, nominations may
be made either (i) by or at the direction of the board of directors, or (ii) by
any shareholder of record of the corporation who is a shareholder of record at
the time of giving of notice provided for in this paragraph, who shall be
entitled to vote at the meeting and who complies with the notice procedures set
forth in this bylaw. Nominations by shareholders of persons for election to the
board of directors may be made at such a special meeting of shareholders if the
shareholder's notice required by Section 2.2(d) of these bylaws shall be
delivered to the Secretary at the principal executive office of the corporation
not later than the close of business on the later of the 90th day prior to such
special meeting or the 10th day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board to be elected at such meeting.
NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 2.5 of
this Article II not less than ten (10) nor more than sixty (60) days before the
date of the meeting being noticed. The notice shall specify the place, date and
hour of the meeting and (i) in the case of a special meeting, the general nature
of the business to be transacted, or (ii) in the case of the annual meeting,
those matters which the board of directors, 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 which, at the time of the notice, the board of directors 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, (ii)
an amendment of the articles of incorporation, pursuant to Section 902 of such
Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of
such Code, (iv) a voluntary dissolution of the corporation, pursuant to Section
1900 of such Code, or (v) a distribution in dissolution other than in accordance
with the rights of outstanding preferred shares, pursuant to Section 2007 of
such Code, the notice shall also state the general nature of such proposal.
2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
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meeting of shareholders shall be given not less than ten (10) (or, if sent by
third-class mail, thirty (30)) nor more than sixty (60) days before the date of
the meeting to each shareholder entitled to vote thereat. That notice shall
state the place, date and hour of the meeting, the means of electronic
transmission by and to the corporation or electronic video screen communication,
if any, by which shareholders may participate in that meeting, and (1) in the
case of a special meeting, the general nature of the business to be transacted,
and no other business may be transacted, or (2) in the case of the annual
meeting, those matters that the board, at the time of the mailing of 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 names of nominees intended
at the time of the notice to be presented by the board for election.
Notice of a shareholders' meeting or any report shall be given
personally, by electronic transmission by the corporation, or by first-class
mail, or, if the corporation's outstanding shares are held of record by five
hundred (500) or more persons (determined as provided in Section 605 of the
Corporations Code of California) on the record date for the shareholders'
meeting, notice may also be sent third-class mail, or other means of written
communication, 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; or if no address appears or is given, at
the place where the principal executive office of the corporation is located or
by publication at least once in a newspaper of general circulation in the county
in which the principal executive office is located, provided that notice shall
be delivered to a shareholder by electronic transmission only to the extent
permitted by the Corporations Code of California. The notice or report shall be
deemed to have been given at the time when delivered personally, sent by
electronic transmission by the corporation, deposited in the mail, or sent by
other means of written communication.
An affidavit of mailing or electronic transmission by the
corporation of any notice or report made in accordance with the provisions of
these bylaws, executed by the secretary, assistant secretary or any transfer
agent of the corporation giving such notice, shall be filed and maintained in
the minute book of the corporation.
QUORUM. The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at a meeting of shareholders shall
constitute a quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
ADJOURNED MEETING AND NOTICE THEREOF. 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 such
meeting, either in person or by proxy, but in the absence of a quorum, no other
business may be transacted at such meeting, except as provided in Section 2.6 of
this Article II.
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 thereof are announced at a meeting at which the
adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the board of directors shall
set a new record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at
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the adjourned meeting in accordance with the provisions of Sections 2.4 and 2.5
of this Article II. At any adjourned meeting the corporation may transact any
business which might have been transacted at the original meeting.
VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section
2.11 of this Article II, subject to the provisions of Sections 702 to 704,
inclusive, of the Corporations Code of California (relating to voting shares
held by a fiduciary, in the name of a corporation or in joint ownership). Such
vote may be by voice vote or by ballot; provided, however, that all elections
for directors must be by ballot upon demand by a shareholder at any election and
before the voting begins. Any shareholder entitled to vote on any matter (other
than elections of directors) may vote part of the shares in favor of the
proposal and refrain from voting the remaining shares or vote them against the
proposal, but, if the shareholder fails to specify the number of shares such
shareholder is voting affirmatively, it will be conclusively presumed that the
shareholder's approving vote is with respect to all shares such shareholder is
entitled to vote. Except as provided in Section 2.6 of this Article II, the
affirmative vote of a majority of the shares represented and voting at a duly
held meeting at which a quorum is present (which shares voting affirmatively
also constitute at least a majority of the required quorum) shall be the act of
the shareholders, unless the vote of a greater number or voting by classes is
required by the Corporations Code of California or the articles of
incorporation.
At a shareholders' meeting involving the election of directors, no
shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes which such shareholder normally
is entitled to cast) unless (i) the right to cumulate votes is required by
Corporations Code of California or the Articles of Incorporation, and (ii) such
candidate or candidates' names have been placed in nomination prior to the
voting and a shareholder has given notice at the meeting prior to the voting of
the shareholder's intention to cumulate votes. If any shareholder has given such
notice, then every shareholder entitled to vote may cumulate such shareholder's
votes for candidates in nomination and give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of votes
to which such shareholder's shares are normally entitled, or distribute the
shareholder's votes on the same principle among any or all of the candidates, as
the shareholder thinks fit. The candidates receiving the highest number of
affirmative votes, up to the number of directors to be elected, shall be
elected. Votes against a director and votes withheld shall have no legal effect.
WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions
at 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, not present in person or by proxy, signs a written waiver of notice or a
consent to a holding of the meeting, or an approval of the minutes thereof. The
waiver of notice, consent to the holding of the meeting or approval of the
minutes thereof 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 this Article II, the waiver of notice,
consent to the holding of the meeting or approval of the minutes thereof shall
state the general nature of such proposal. All such waivers, consents or
approvals shall be filed with the corporate records or made a part of the
minutes of the meeting.
Attendance of a person at a meeting shall also constitute a waiver
of notice of and
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presence at such meeting, except when the person objects, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened, and except that attendance at a meeting is not a
waiver of any right to object to the consideration of matters required by the
Corporations Code of California to be included in the notice but which were not
included in the notice, if such objection is expressly made at the meeting.
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 such action at a meeting at which all shares entitled to vote thereon
were present and voted. In the case of election of directors, such 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 not 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 filed with the
secretary of the corporation and shall be maintained in the corporate records.
Any shareholder giving a written consent, or the shareholder's proxy 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 prior to the time that 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 this
Article II. In the case of approval of (i) contracts or transactions in which a
director has a direct or indirect financial interest, pursuant to Section 310 of
the Corporations Code of California, (ii) indemnification of agents of the
corporation, pursuant to Section 317 of such Code, (iii) a reorganization of the
corporation, pursuant to Section 1201 of such Code, and (iv) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares, pursuant to Section 2007 of such Code, such notice shall be given at
least ten (10) days before the consummation of any such action authorized by any
such approval.
RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS. For
purposes of determining the shareholders entitled to notice of any meeting or to
vote or entitled to give consent to corporate action without a meeting, the
board of directors may fix, in advance, a record date, which shall not be more
than sixty (60) days nor less than ten (10) days prior to the date of any such
meeting nor more than sixty (60) days prior to such action without a meeting,
and in such case only shareholders at the close of business on the record date
so fixed are entitled to notice and to vote or to give consents, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after the record date fixed as aforesaid, except as otherwise provided in the
Corporations Code of California.
If the board of directors does not so fix a record date:
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
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business day next preceding the day on which the meeting is held.
The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting, (i) when no
prior action by the board has been taken, shall be the day on which the
first written consent is given, or (ii) when prior action of the board has
been taken, shall be at the close of business on the day on which the
board adopts the resolution relating thereto, or the sixtieth (60th) day
prior to the date of such other action, whichever is later.
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,
prior to the vote pursuant thereto, by a writing delivered to the corporation
stating that the proxy is revoked or by a subsequent proxy executed by the
person executing the prior proxy and presented to the meeting, or as to any
meeting by attendance at such meeting and voting in person by the person
executing the proxy; or (ii) written notice of the death or incapacity of the
maker of such proxy is received by the corporation before the vote pursuant
thereto is counted; provided, however, that no such proxy shall be valid after
the expiration of eleven (11) months from the date of such proxy, unless
otherwise provided in the proxy. The revocability of a proxy that states on its
face that it is irrevocable shall be governed by the provisions of Section
705(e) and (f) of the Corporations Code of California.
INSPECTORS OF ELECTION. Before any meeting of shareholders, the
board of directors may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so appointed, the chairman of the meeting may, and on the request
of any shareholder or a shareholder's proxy shall, appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or
three (3). If inspectors are appointed at a meeting on the request of one or
more shareholders or proxies, the holders of a majority of shares or their
proxies present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. If any person appointed as inspector fails to
appear or fails or refuses to act, the chairman of the meeting may, and upon the
request of any shareholder or a shareholder's proxy shall, appoint a person to
fill such vacancy.
The duties of these inspectors shall be as follows:
Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies;
Receive votes, ballots or consents;
Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
Count and tabulate all votes or consents;
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Determine when the polls shall close;
Determine the result; and
Do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
10.
DIRECTORS
POWERS. Subject to the provisions of the Corporations Code of
California and any limitations in the articles of incorporation and these bylaws
relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the directors shall have the
power and authority to:
Select and remove all officers, agents, and employees of the
corporation, prescribe such powers and duties for them as may not be
inconsistent with law, with the articles of incorporation or these bylaws,
fix their compensation, and require from them security for faithful
service.
Change the principal executive office or the principal
business office in the State of California from one location to another;
cause the corporation to be qualified to do business in any other state,
territory, dependency, or foreign country and conduct business within or
outside the State of California; designate any place within or without the
State of California for the holding of any shareholders' meeting, or
meetings, including annual meetings; adopt, make and use a corporate seal,
and prescribe the forms of certificates of stock, and alter the form of
such seal and of such certificates from time to time as in their judgment
they may deem best, provided that such forms shall at all times comply
with the provisions of law.
Authorize the issuance of shares of stock of the corporation
from time to time, upon such terms as may be lawful, in consideration of
money paid, labor done or services actually rendered, debts or securities
cancelled or tangible or intangible property actually received.
Borrow money and incur indebtedness for the purposes of the
corporation, and cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations, or other evidences of debt and
securities therefor.
NUMBER AND QUALIFICATION OF DIRECTORS. The authorized number of
directors shall be not less than NINE (9) nor more than SEVENTEEN (17). The
exact number of authorized directors shall be set from time to time by the board
of directors. An amendment to this bylaw adopted by the vote or written consent
of holders of a majority of the outstanding shares entitled to vote which
reduces the number of directors to a number less than five (5) cannot be
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adopted if the votes cast against its adoption at a meeting, or the shares not
consenting in the case of action by written consent, are equal to more than
16-2/3% of the outstanding shares entitled to vote.
ELECTION AND TERM OF OFFICE OF DIRECTORS.
The directors shall be divided into three classes, designated Class
I, Class II and Class III. Each class shall consist of an equal or close to
equal number of directors. The term of the initial Class I directors shall
terminate on the date of the 1997 annual meeting of shareholders; the term of
the initial Class II directors shall terminate on the date of the 1998 annual
meeting of shareholders; and the term of the initial Class III directors shall
terminate on the date of the 1999 annual shareholders. At each annual meeting of
shareholders beginning in 1997, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term. If the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional directors of any class elected to
fill a vacancy resulting from an increase in such a class shall hold office for
a term that shall coincide with the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting for the year in
which his term expires and until his successor shall be elected and shall
qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office.
VACANCIES. Any vacancy on the Board of Directors, howsoever
resulting, may be filled by a majority of the directors then in office, even if
less than a quorum, or by a sole remaining director. Any director elected to
fill a vacancy shall hold office for a term that shall coincide with the term of
the class to which such director shall have been elected.
A vacancy or vacancies in the board of directors shall be deemed to
exist in the case of the death, resignation or removal of any director, or if
the board of directors by resolution declares vacant the office of a director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of directors be increased, or if the
shareholders fail at any meeting of shareholders at which any director or
directors are elected, to elect the full authorized number of directors to be
voted for at that meeting.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors, but any such election
by written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any director may resign effective upon 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 the effectiveness of such
resignation. 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 prior to the expiration of his term of office.
PLACE OF MEETINGS AND TELEPHONIC MEETINGS. Regular meetings of the
board of directors may be held at any place within or without the State of
California that has been designated from time to time by resolution of the
board. In the absence of such designation, regular meetings shall be held at the
principal executive office of the corporation. Special meetings of the
35
board shall be held at any place within or without the State of California that
has been designated in the notice of the meeting or, if not stated in the notice
or there is no notice, at the principal executive office of the corporation. Any
meeting, regular or special, may be held by conference telephone, electronic
video screen communication, or electronic transmission by and to the
corporation.
Participation in a meeting through use of conference telephone
or electronic video screen communication shall constitute presence in
person at that meeting as long as all members participating in the meeting
are able to hear one another.
Participation in a meeting through electronic transmission by
and to the corporation (other than conference telephone and electronic
video screen communication) constitutes presence in person at that meeting
as long as (i) each member participating in the meeting can communicate
with all of the other members concurrently, and (ii) Each member is
provided the means of participating in all matters before the board,
including, without limitation, the capacity to propose, or to interpose an
objection to, a specific action to be taken by the corporation.
ANNUAL MEETING. Immediately following each annual meeting of
shareholders, the board of directors shall hold a regular meeting for the
purpose of organization, any desired election of officers and the transaction of
other business. Notice of this meeting shall not be required.
OTHER REGULAR MEETINGS. Other regular meetings of the board of
directors shall be held without call at such time as shall from time to time be
fixed by the board of directors. Such regular meetings may be held without
notice.
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 or
the president or any vice president or 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,
telegram or by telephone, including a voice messaging system or other system or
technology designed to record and communicate messages, facsimile, electronic
mail, or other electronic means, charges pre-paid, addressed to each director at
his or her address as it is shown upon the records of the corporation. In case
such notice is mailed, it shall be deposited in the United States mail at least
four (4) days prior to the time of the holding of the meeting. In case such
notice is delivered personally, or by telegram, telephone, facsimile, electronic
mail or other electronic means, it shall be delivered at least forty-eight (48)
hours prior to the time of the holding of the meeting. Any oral notice given
personally or by telephone may be communicated to either the director or to a
person at the office of the director who the person giving the notice has reason
to believe will promptly communicate it to the director. The notice need not
specify the purpose of the meeting nor the place if the meeting is to be held at
the principal executive office of the corporation.
QUORUM. A majority of the authorized number of directors shall
constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the board of directors, subject to the provisions of
Section 310 of the Corporations Code of California (approval of contracts or
transactions in which a
36
director has a direct or indirect material financial interest), Section 311 of
that Code (appointment of committees), and Section 317(e) of that Code
(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 such meeting.
WAIVER OF NOTICE. Notice of a meeting need not be given to any
director who signs a waiver of notice or a consent to holding the meeting or an
approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of notice. The waiver of notice or consent need not specify the purpose
of the meeting. All such waivers, consents and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
ADJOURNMENT. A majority of the directors present, whether or not
constituting a quorum, may adjourn any meeting to another time and place.
NOTICE OF ADJOURNMENT. Notice of the time and place of holding an
adjourned meeting need not be given, unless the meeting is adjourned for more
than twenty-four hours, in which case notice of such time and place shall be
given prior to the time of the adjourned meeting, in the manner specified in
Section 3.8 of this Article III, to the directors who were not present at the
time of the adjournment.
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 such action. Such
action by written consent shall have the same force and effect as a unanimous
vote of the board of directors. Such written consent or consents shall be filed
with the minutes of the proceedings of the board.
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. Nothing contained herein shall be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation for such services.
11.
COMMITTEES
COMMITTEES OF DIRECTORS. The board of directors may, by resolution
adopted by a majority of the authorized number of directors, designate one or
more committees, each consisting of two or more directors, to serve at the
pleasure of the board. The board may designate one or more directors as
alternate members of any committee, who may replace any absent member at any
meeting of the committee. The appointment of members or alternate members of a
committee requires the vote of a majority of the authorized number of directors.
Any such committee, to the extent provided in the resolution of the board, shall
have all the authority of the board, except with respect to:
the approval of any action which, under the Corporations Code
of California, also requires share holders' approval or approval of the
outstanding shares;
37
the filling of vacancies on the board of directors or in any
committee;
the fixing of compensation of the directors for serving on the
board or on any committee;
the amendment or repeal of bylaws or the adoption of new
bylaws;
the amendment or repeal of any resolution of the board of
directors which by its express terms is not so amendable or repealable;
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
the appointment of any other committees of the board of
directors or the members thereof.
MEETINGS AND ACTION OF COMMITTEES. Meetings and action of committees
shall be governed by, and held and taken in accordance with, the provisions of
Article III of these bylaws, Sections 3.5 (place of meetings), 3.7 (regular
meetings), 3.8 (special meetings and notice), 3.9 (quorum), 3.10 (waiver of
notice), 3.11 (adjournment), 3.12 (notice of adjournment) and 3.13 (action
without meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of directors
and its members, except that the time of regular meetings of committees may be
determined by resolution of the board of directors as well as by resolution of
the committee; special meetings of committees may also be called by resolution
of the board of directors; and notice of special meetings of committees shall
also be given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.
12.
OFFICERS
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 this Article V. Any number of offices may be held
by the same person.
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 this Article V, shall be chosen by the board of directors, and
each shall serve at the pleasure of the board, subject to the rights, if any, of
an officer under any contract of employment.
SUBORDINATE OFFICERS, ETC. The board of directors may appoint, and
may empower the president to appoint, such other officers as the business of the
corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in the bylaws or as the
board of directors may from time to time determine.
REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, if any,
of
38
an officer under any contract of employment, any officer may be removed, either
with or without cause, by the board of directors, at any regular or special
meeting thereof, or, except in case of an officer chosen by the board of
directors, by any officer upon whom such power of removal may be conferred by
the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective. Any such resignation is with out prejudice to the rights, if
any, of the corporation under any contract to which the officer is a party.
VACANCIES IN OFFICES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled in the
manner prescribed in these bylaws for regular appointments to such office.
CHAIRMAN OF THE BOARD. The chairman of the board, if such an officer
be elected, shall, if present, preside at all meetings of the board of directors
and exercise and perform such other powers and duties as may be from time to
time assigned to him by the board of directors or prescribed by the bylaws. If
there is no president, the chairman of the board shall in addition be the chief
executive officer of the corporation and shall have the powers and duties
prescribed in Section 5.7 of this Article V.
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 all meetings
of the board of directors. He shall have the general powers and duties of
management usually vested in the office of president of a corporation, and shall
have such other powers and duties as may be prescribed by the board of directors
or the bylaws.
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 restrictions upon, the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
board of directors or the bylaws, the president or the chairman of the board.
SECRETARY. The secretary shall keep or cause to be kept, at the
principal executive office or such other place as the board of directors may
order, a book of minutes of all meetings and actions of directors, committees of
directors and shareholders, with the time and place of holding, whether regular
or special, and, if special, how authorized, the notice thereof given, the names
of those present at directors' and 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 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
39
their addresses, the number and classes of shares held by each, the number and
date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the board of directors required by the
bylaws or by law to be given, and he shall keep the seal of the corporation, if
one be adopted, in safe custody, and shall have such other powers and perform
such other duties as may be prescribed by the board of directors or by the
bylaws.
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 moneys and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the board of directors. He shall disburse
the funds of the corporation as may be ordered by the board of directors, shall
render to the president and directors, whenever they request it, an account of
all of his transactions as chief financial officer and of the financial
condition of the corporation, and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or the bylaws.
13.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS
INDEMNIFICATION - THIRD PARTY PROCEEDINGS. The corporation shall
indemnify any person (the "Indemnitee") who is or was a party or is threatened
to be made a party to any proceeding (other than an action by or in the right of
the corporation to procure a judgment in its favor) by reason of the fact that
Indemnitee is or was a director or officer of the corporation, or any subsidiary
of the corporation, and the corporation may indemnify a person who is or was a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the corporation to procure a judgment in its favor)
by reason of the fact that such person is or was an employee or other agent of
the corporation (the "Indemnitee Agent") by reason of any action or inaction on
the part of Indemnitee or Indemnitee Agent while an officer, director or agent
or by reason of the fact that Indemnitee or Indemnitee Agent is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including subject to Section 6.19, attorneys' fees and any
expenses of establishing a right to indemnification pursuant to this Article VI
or under California law), judgments, fines, settlements (if such settlement is
approved in advance by the corporation, which approval shall not be unreasonably
withheld) and other amounts actually and reasonably incurred by Indemnitee or
Indemnitee Agent in connection with such proceeding if Indemnitee or Indemnitee
Agent acted in good faith and in a manner Indemnitee or Indemnitee Agent
reasonably believed to be in or not opposed to the best interests of the
corporation and, in the case of a criminal proceeding, if Indemnitee or
Indemnitee Agent had no reasonable cause to believe Indemnitee's or Indemnitee
Agent's conduct was unlawful. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not,
40
of itself, create a presumption that Indemnitee or Indemnitee Agent did not act
in good faith and in a manner which Indemnitee or Indemnitee Agent reasonably
believed to be in or not opposed to the best interests of the corporation, or
with respect to any criminal proceedings, would not create a presumption that
Indemnitee or Indemnitee Agent had reasonable cause to believe that Indemnitee's
or Indemnitee Agent's conduct was unlawful.
INDEMNIFICATION - PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION.
The corporation shall indemnify Indemnitee and may indemnify Indemnitee Agent if
Indemnitee, or Indemnitee Agent, as the case may be, was or is a party or is
threatened to be made a party to any threatened, pending or completed action by
or in the right of the corporation or any subsidiary of the corporation to
procure a judgment in its favor by reason of the fact that Indemnitee or
Indemnitee Agent is or was a director, officer, employee or other agent of the
corporation, or any subsidiary of the corporation, by reason of any action or
inaction on the part of Indemnitee or Indemnitee Agent while an officer,
director or agent or by reason of the fact that Indemnitee or Indemnitee Agent
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including subject to Section 6.19,
attorneys' fees and any expenses of establishing a right to indemnification
pursuant to this Article VI or under California law) and, to the fullest extent
permitted by law, amounts paid in settlement, in each case to the extent
actually and reasonably incurred by Indemnitee or Indemnitee Agent in connection
with the defense or settlement of the proceeding if Indemnitee or Indemnitee
Agent acted in good faith and in a manner Indemnitee or Indemnitee Agent
believed to be in or not opposed to the best interests of the corporation and
its shareholders, except that no indemnification shall be made with respect to
any claim, issue or matter to which Indemnitee (or Indemnitee Agent) shall have
been adjudged to have been liable to the corporation in the performance of
Indemnitee's or Indemnitee Agent's duty to the corporation and its shareholders,
unless and only to the extent that the court in which such proceeding is or was
pending shall determine upon application that, in view of all the circumstances
of the case, Indemnitee (or Indemnitee Agent) is fairly and reasonably entitled
to indemnity for expenses and then only to the extent that the court shall
determine.
SUCCESSFUL DEFENSE ON MERITS. To the extent that Indemnitee (or
Indemnitee Agent) without limitation has been successful on the merits in
defense of any proceeding referred to in Sections 6.1 or 6.2 above, or in
defense of any claim, issue or matter therein, the corporation shall indemnify
Indemnitee (or Indemnitee Agent) against expenses (including attorneys' fees)
actually and reasonably incurred by Indemnitee (or Indemnitee Agent) in
connection therewith.
CERTAIN TERMS DEFINED. For purposes of this Article VI, references
to "other enterprises" shall include employee benefit plans, references to
"fines" shall include any excise taxes assessed on Indemnitee or Indemnitee
Agent with respect to an employee benefit plan, and references to "proceeding"
shall include any threatened, pending or completed action or proceeding, whether
civil, criminal, administrative or investigative. References to "corporation"
include all constituent corporations absorbed in a consolidation or merger as
well as the resulting or surviving corporation, so that any person who is or was
a director, officer, employee, or other agent of such a constituent corporation
or who, being or having been such a director, officer, employee or other agent
of another corporation, partnership, joint venture, trust or other enterprise
shall stand in the same position under the provisions of this Article VI with
respect to the resulting or surviving corporation as such person would if he or
she had served the resulting or surviving corporation in the same capacity.
41
ADVANCEMENT OF EXPENSES. The corporation shall advance all expenses
incurred by Indemnitee and may advance all or any expenses incurred by
Indemnitee Agent in connection with the investigation, defense, settlement
(excluding amounts actually paid in settlement of any action, suit or
proceeding) or appeal of any civil or criminal action, suit or proceeding
referenced in Sections 6.1 or 6.2 hereof. Indemnitee or Indemnitee Agent hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that Indemnitee or Indemnitee Agent is not
entitled to be indemnified by the corporation as authorized hereby. The advances
to be made hereunder shall be paid by the corporation (i) to Indemnitee within
twenty (20) days following delivery of a written request therefor by Indemnitee
to the corporation; and (ii) to Indemnitee Agent within twenty (20) days
following the later of a written request therefor by Indemnitee Agent to the
corporation and determination by the corporation to advance expenses to
Indemnitee Agent pursuant to the corporation's discretionary authority
hereunder.
NOTICE OF CLAIM. Indemnitee shall, as a condition precedent to his
or her right to be indemnified under this Article VI, and Indemnitee Agent
shall, as a condition precedent to his or her ability to be indemnified under
this Article VI, give the corporation notice in writing as soon as practicable
of any claim made against Indemnitee or Indemnitee Agent, as the case may be,
for which indemnification will or could be sought under this Article VI. Notice
to the corporation shall be directed to the secretary of the corporation at the
principal business office of the corporation (or such other address as the
corporation shall designate in writing to Indemnitee). In addition, Indemnitee
or Indemnitee Agent shall give the corporation such information and cooperation
as it may reasonably require and as shall be within Indemnitee's or Indemnitee
Agent's power.
ENFORCEMENT RIGHTS. Any indemnification provided for in Sections 6.1
or 6.2 or 6.3 shall be made no later than sixty (60) days after receipt of the
written request of Indemnitee. If a claim or request under this Article VI,
under any statute, or under any provision of the corporation's Articles of
Incorporation providing for indemnification is not paid by the corporation, or
on its behalf, within sixty (60) days after written request for payment thereof
has been received by the corporation, Indemnitee may, but need not, at any time
thereafter bring suit against the corporation to recover the unpaid amount of
the claim or request, and subject to Section 6.19, Indemnitee shall also be
entitled to be paid for the expenses (including attorneys' fees) of bringing
such action. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in connection with any action,
suit or proceeding in advance of its final disposition) that Indemnitee has not
met the standards of conduct which make it permissible under applicable law for
the corporation to indemnify Indemnitee for the amount claimed, but the burden
of proving such defense shall be on the corporation, and Indemnitee shall be
entitled to receive interim payments of expenses pursuant to Section 6.5 unless
and until such defense may be finally adjudicated by court order or judgment for
which no further right of appeal exists. The parties hereto intend that if the
corporation contests Indemnitee's right to indemnification, the question of
Indemnitee's right to indemnification shall be a decision for the court, and no
presumption regarding whether the applicable standard has been met will arise
based on any determination or lack of determination of such by the corporation
(including its Board or any subgroup thereof, independent legal counsel or its
shareholders). The board of directors may, in its discretion, provide by
resolution for similar or identical enforcement rights for any Indemnitee Agent.
ASSUMPTION OF DEFENSE. In the event the corporation shall be
obligated to pay the expenses of any proceeding against the Indemnitee (or
Indemnitee Agent), the corporation, if appropriate, shall be entitled to assume
the defense of such proceeding with counsel approved by
42
Indemnitee (or Indemnitee Agent), which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee (or Indemnitee Agent) of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee (or Indemnitee Agent) and the retention of such counsel by
the corporation, the corporation will not be liable to Indemnitee (or Indemnitee
Agent) under this Article VI for any fees of counsel subsequently incurred by
Indemnitee (or Indemnitee Agent) with respect to the same proceeding, unless (i)
the employment of counsel by Indemnitee (or Indemnitee Agent) is authorized by
the corporation, (ii) Indemnitee (or Indemnitee Agent) shall have reasonably
concluded that there may be a conflict of interest of such counsel retained by
the corporation between the corporation and Indemnitee (or Indemnitee Agent) in
the conduct of such defense, or (iii) the corporation ceases or terminates the
employment of such counsel with respect to the defense of such proceeding, in
any of which events then the fees and expenses of Indemnitee's (or Indemnitee
Agent's) counsel shall be at the expense of the corporation. At all times,
Indemnitee (or Indemnitee Agent) shall have the right to employ other counsel in
any such proceeding at Indemnitee's (or Indemnitee Agent's) expense.
APPROVAL OF EXPENSES. No expenses for which indemnity shall be
sought under this Article VI, other than those in respect of judgments and
verdicts actually rendered, shall be incurred without the prior consent of the
corporation, which consent shall not be unreasonably withheld.
SUBROGATION. In the event of payment under this Article VI, the
corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of the Indemnitee (or Indemnitee Agent), who shall do all
things that may be necessary to secure such rights, including the execution of
such documents necessary to enable the corporation effectively to bring suit to
enforce such rights.
EXCEPTIONS. Notwithstanding any other provision herein to the
contrary, the corporation shall not be obligated pursuant to this Article VI:
Excluded Acts. To indemnify Indemnitee (i) as to circumstances
in which indemnity is expressly prohibited pursuant to California law, or
(ii) for any acts or omissions or transactions from which a director may
not be relieved of liability pursuant to California law; or
Claims Initiated by Indemnitee. To indemnify or advance
expenses to Indemnitee with respect to proceedings or claims initiated or
brought voluntarily by Indemnitee and not by way of defense, except with
respect to proceedings brought to establish or enforce a right to
indemnification under this Article VI or any other statute or law or as
otherwise required under the Corporations Code of California, but such
indemnification or advancement of expenses may be provided by the
corporation in specific cases if the board of directors has approved the
initiation or bringing of such suit; or
Lack of Good Faith. To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Article VI, if a court of
competent jurisdiction determines that such proceeding was not made in
good faith or was frivolous; or
Insured Claims. To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or
43
penalties, and amounts paid in settlement) which have been paid directly
to Indemnitee by an insurance carrier under a policy of officers' and
directors' liability insurance maintained by the corporation; or
Claims Under Section 16(b). To indemnify Indemnitee for
expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute.
PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any
provision of this Article VI to indemnification by the corporation for some or a
portion of the expenses, judgments, fines or penalties actually or reasonably
incurred by the Indemnitee in the investigation, defense, appeal or settlement
of any civil or criminal action, suit or proceeding, but not, however, for the
total amount thereof, the corporation shall nevertheless indemnify Indemnitee
for the portion of such expenses, judgments, fines or penalties to which
Indemnitee is entitled.
COVERAGE. This Article VI shall, to the extent permitted by law,
apply to acts or omissions of (i) Indemnitee which occurred prior to the
adoption of this Article VI if Indemnitee was a director or officer of the
corporation or was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, at the time such act or omission occurred; and (ii) Indemnitee Agent
which occurred prior to the adoption of this Article VI if Indemnitee Agent was
an employee or other agent of the corporation or was serving at the request of
the corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise at the time such act or omission
occurred. All rights to indemnification under this Article VI shall be deemed to
be provided by a contract between the corporation and the Indemnitee in which
the corporation hereby agrees to indemnify Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the corporation's Articles of Incorporation, these Bylaws or by
statute. Any repeal or modification of these Bylaws, the Corporations Code of
California or any other applicable law shall not affect any rights or
obligations then existing under this Article VI. The provisions of this Article
VI shall continue as to Indemnitee and Indemnitee Agent for any action taken or
not taken while serving in an indemnified capacity even though the Indemnitee or
Indemnitee Agent may have ceased to serve in such capacity at the time of any
action, suit or other covered proceeding. This Article VI shall be binding upon
the corporation and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee Agent and Indemnitee's and Indemnitee Agent's estate,
heirs, legal representatives and assigns.
NON-EXCLUSIVITY. Nothing herein shall be deemed to diminish or
otherwise restrict any rights to which Indemnitee or Indemnitee Agent may be
entitled under the corporation's Articles of Incorporation, these Bylaws, any
agreement, any vote of shareholders or disinterested directors, or under the
laws of the State of California.
SEVERABILITY. Nothing in this Article VI is intended to require or
shall be construed as requiring the corporation to do or fail to do any act in
violation of applicable law. If this Article VI or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify Indemnitee or Indemnitee Agent to the
fullest extent permitted by any applicable portion of this Article VI that shall
not have been invalidated.
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MUTUAL ACKNOWLEDGMENT. Both the corporation and Indemnitee
acknowledge that in certain instances, Federal law or applicable public policy
may prohibit the corporation from indemnifying its directors and officers under
this Article VI or otherwise. Indemnitee understands and acknowledges that the
corporation has undertaken or may be required in the future to undertake with
the Securities and Exchange Commission to submit the question of indemnification
to a court in certain circumstances for a determination of the corporation's
right under public policy to indemnify Indemnitee.
OFFICER AND DIRECTOR LIABILITY INSURANCE. The corporation shall,
from time to time, make the good faith determination whether or not it is
practicable for the corporation to obtain and maintain a policy or policies of
insurance with reputable insurance companies providing the officers and
directors of the corporation with coverage for losses from wrongful acts, or to
ensure the corporation's performance of its indemnification obligations under
this Article VI. Among other considerations, the corporation will weigh the
costs of obtaining such insurance coverage against the protection afforded by
such coverage. Notwithstanding the foregoing, the corporation shall have no
obligation to obtain or maintain such insurance if the corporation determines in
good faith that such insurance is not reasonably available, if the premium costs
for such insurance are disproportionate to the amount of coverage provided, if
the coverage provided by such insurance is limited by exclusions so as to
provide an insufficient benefit, or if Indemnitee is covered by similar
insurance maintained by a subsidiary or parent of the corporation.
NOTICE TO INSURERS. If, at the time of the receipt of a notice of a
claim pursuant to Section 6.6 hereof, the corporation has director and officer
liability insurance in effect, the corporation shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The corporation shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such proceeding
in accordance with the terms of such policies.
ATTORNEYS' FEES. In the event that any action is instituted by
Indemnitee under this Article VI to enforce or interpret any of the terms
hereof, Indemnitee shall be entitled to be paid all court costs and expenses,
including reasonable attorneys' fees, incurred by Indemnitee with respect to
such action, unless as a part of such action, the court of competent
jurisdiction determines that the action was not instituted in good faith or was
frivolous. In the event of an action instituted by or in the name of the
corporation under this Article VI, or to enforce or interpret any of the terms
of this Article VI, Indemnitee shall be entitled to be paid all court costs and
expenses, including attorneys' fees, incurred by Indemnitee in defense of such
action (including with respect to Indemnitee's counterclaims and cross-claims
made in such action), unless as a part of such action the court determines that
Indemnitee's defenses to such action were not made in good faith or were
frivolous. The board of directors may, in its discretion, provide by resolution
for payment of such attorneys' fees to any Indemnitee Agent.
NOTICE. All notices, requests, demands and other communications
under this Article VI shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the addressee, on the date of such
receipt, (ii) if sent by electronic transmission by the corporation, at the time
sent, or (iii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked.
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14.
RECORDS AND REPORTS
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 share holders, 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 may (i) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours upon five days prior
written demand upon the corporation, and/or (ii) obtain from the transfer agent
of the corporation, upon written demand and upon the tender of such transfer
agent's usual charges for such list, a list of the shareholders' names and
addresses, who are entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which such list has been
compiled or as of a date specified by the shareholder subsequent to the date of
demand. Such list shall be made available by the transfer agent on or before the
later of five (5) days after the demand is received or the date specified
therein as the date as of which the list is to be compiled. The record of
shareholders shall also be open to inspection upon the written demand of any
shareholder or holder of a voting trust certificate, at any time during usual
business hours, for a purpose reasonably related to such holder's interests as a
shareholder or as the holder of a voting trust certificate. Any inspection and
copying under this Section may be made in person or by an agent or attorney of
the shareholder or holder of a voting trust certificate making such demand.
MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at
its principal executive office, or if its principal executive office is not in
the State of California at its principal business office in this state, the
original or a copy of the bylaws as amended to date, which shall be open to
inspection by the shareholders at all reason able times during office hours. If
the principal executive office of the corporation is outside this State and the
corporation has no principal business office in this state, the Secretary shall,
upon the written request of any shareholder, furnish to such shareholder a copy
of the bylaws as amended to date.
MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The
accounting books and records and minutes of proceedings of the shareholders and
the board of directors and any committee or committees of the board of directors
shall be kept at such place or places designated by the board of directors, or,
in the absence of such designation, at the principal executive office of the
corporation. The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other form capable of
being converted into written form. Such minutes and accounting books and records
shall be open to inspection upon the written demand of any shareholder or holder
of a voting trust certificate, at any reasonable time during usual business
hours, for a purpose reasonably related to such holder's interests as a
shareholder or as the holder of a voting trust certificate. Such inspection may
be made in person or by an agent or attorney, and shall include the right to
copy and make extracts. The foregoing rights of inspection shall extend to the
records of each subsidiary of the corporation.
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
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properties of the corporation and each of its subsidiary corporations. This
inspection by a director may be made in person or by an agent or attorney and
the right of inspection includes the right to copy and make extracts of
documents.
ANNUAL REPORT TO SHAREHOLDERS. The annual report to shareholders
referred to in Section 1501 of the Corporations Code of California is expressly
dispensed with, but nothing herein shall be interpreted as prohibiting the board
of directors from issuing annual or other periodic reports to the shareholders
of the corporation as they deem appropriate.
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 no annual report for the last fiscal year has been sent to
shareholders, the corporation shall, upon the written request of any shareholder
made more than 120 days after the close of such fiscal year, deliver or mail to
such shareholder, within thirty (30) days after such request a balance sheet as
of the end of such fiscal year and an income statement and statement of changes
in financial position for such fiscal year.
If a shareholder or shareholders holding at least five percent (5%)
of the outstanding shares of any class of stock of the corporation make a
written request to the corporation for an income statement of the corporation
for the three-month, six-month or nine-month period of the then current fiscal
year ended more than thirty (30) days prior to the date of the request and a
balance sheet of the corporation as of the end of such period and, in addition,
if no annual report for the last fiscal year has been sent to shareholders, a
balance sheet as of the end of such fiscal year and an income statement and
statement of changes in financial position for such fiscal year, then, the chief
financial officer shall cause such statements to be prepared, if not already
prepared, and shall deliver personally or mail such statement or statements to
the person making the request within thirty (30) days after the receipt of such
request.
The income statements and balance sheets referred to in this section
shall be accompanied by the report thereon, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that such financial statements were prepared without
audit from the books and records of the corporation.
ANNUAL STATEMENT OF GENERAL INFORMATION. The corporation shall file
annually with the Secretary of State of the State of California, on the
prescribed form, a statement setting forth the names and complete business or
residence addresses of all incumbent directors, the number of vacancies on the
board of directors, if any, the names and complete business or residence
addresses of the chief executive officer, secretary and chief financial officer,
the street address of its principal executive office or principal business
office in this state and the general type of business constituting the principal
business activity of the corporation, together with a designation of the agent
of the corporation for the purpose of service of process, all in compliance with
Section 1502 of the Corporations Code of California.
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15.
GENERAL CORPORATE MATTERS
RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes
of determining the share holders 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 prior to any such
action, and in such case only shareholders of record on the date so fixed are
entitled to receive the dividend, distribution or allotment of rights or to
exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date fixed as aforesaid,
except as otherwise provided in the Corporations Code of California.
If the board of directors does not so fix a record date, the record
date for determining shareholders for any such purpose shall be at the close of
business on the day on which the board adopts the resolution relating thereto,
or the sixtieth (60th) day prior to the date of such action, whichever is later.
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.
CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The board of
directors, except as otherwise provided in these bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the corporation, and 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.
CERTIFICATES FOR SHARES. A certificate or certificates for shares of
the capital stock of the corporation shall be issued to each shareholder when
any such shares are fully paid, and the board of directors may authorize the
issuance of certificates for shares as partly paid provided that such
certificates shall state the amount of the consideration to be paid therefor and
the amount paid thereon. All certificates shall be signed in the name of the
corporation by the chairman of the board or vice chairman of the board or the
president or a 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 upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if such person were an officer, transfer
agent or registrar at the date of issue.
LOST CERTIFICATES. Except as herein after in this Section provided,
no new certificates for shares shall be issued in lieu of an old certificate
unless the latter is surrendered to the corporation and cancelled at the same
time. The board of directors may in case any share certificate or certificate
for any other security is lost, stolen or destroyed, authorize the issuance of a
new
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certificate in lieu thereof, upon such terms and conditions as the board may
require including provision for indemnification of the corporation secured by a
bond 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 such certificate or the
issuance of such new certificate.
REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The chairman of the
board, the president, or any vice president, or any other person authorized by
resolution of the board of directors by any of the foregoing designated
officers, is authorized to vote on behalf of the corporation any and all shares
of any other corporation or corporations, foreign or domestic, standing in the
name of the corporation. The authority herein granted to said officers to vote
or represent on behalf of the corporation any and all shares held by the
corporation in any other corporation or corporations may be exercised by any
such officer in person or by any person authorized to do so by proxy duly
executed by said officer.
CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise,
the general provisions, rules of construction, and definitions in the
Corporations Code of California shall govern the construction of these bylaws.
Without limiting the generality of the foregoing, the singular number includes
the plural, the plural number includes the singular, and the term "person"
includes both a corporation and a natural person.
TIME NOTICE GIVEN OR SENT. Any reference in these bylaws to the time
a notice is given or sent means, unless otherwise expressly provided herein or
by law, the time a written notice (a) is deposited in the United States mail, is
personally delivered to the recipient, or is delivered to a common carrier for
transmission; (b) is actually transmitted to the recipient by the person giving
the notice by electronic transmission; or (c) is communicated, in person or by
telephone, to the recipient or to a person at the office of the recipient who
the person giving the notice has reason to believe will promptly communicate it
to the recipient
ELECTRONIC TRANSMISSION BY OR TO THE CORPORATION.
(a) When used in these bylaws, the term "electronic transmission by
the corporation" means a communication (a) delivered by (1) facsimile
telecommunication or electronic mail when directed to the facsimile number or
electronic mail address, respectively, for that recipient on record with the
corporation, (2) posting on an electronic message board or network which the
corporation has designated for those communications, together with a separate
notice to the recipient of the posting, which transmission shall be validly
delivered upon the later of the posting or delivery of the separate notice
thereof, or (3) other means of electronic communication, (b) to a recipient who
has provided an unrevoked consent to the use of those means of transmission for
communications under or pursuant to the Corporations Code of California, (c)
that creates a record that is capable of retention, retrieval, and review, and
that may thereafter be rendered into clearly legible tangible form, and (d) that
satisfies the requirements applicable to consumer consent to electronic records
as set forth in the Electronic Signatures in Global and National Commerce Act
(15 U.S.C. Sec. 7001(c)(1)), or any similar law that replaces such act.
(b) When used in these bylaws, "electronic transmission to the
corporation" means a communication (a) delivered by (1) facsimile
telecommunication or electronic mail when directed to the facsimile number or
electronic mail address, respectively, which the corporation has provided from
time to time to shareholders or members and directors for sending communications
to the
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corporation, (2) posting on an electronic message board or network which the
corporation has designated for those communications, and which transmission
shall be validly delivered upon the posting, or (3) other means of electronic
communication, (b) as to which the corporation has placed in effect reasonable
measures to verify that the sender is the shareholder or member (in person or by
proxy) or director purporting to send the transmission, and (c) that creates a
record that is capable of retention, retrieval, and review, and that may
thereafter be rendered into clearly legible tangible form.
16.
AMENDMENTS
AMENDMENT BY SHAREHOLDERS. New bylaws may be adopted or these bylaws
may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided, however, that if
the articles of incorporation of the corporation set forth the number of
authorized directors of the corporation, the authorized number of directors may
be changed only by an amendment of the articles of incorporation.
AMENDMENT BY DIRECTORS. Subject to the rights of the shareholders as
provided in Section 9.1 of this Article IX, bylaws, other than a bylaw or an
amendment thereof changing the authorized number of directors, may be adopted,
amended or repealed by the board of directors.
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