BYLAWS
OF
IMAGEWARE SOFTWARE, INC.
ARTICLE I
OFFICES
Section 1. 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 California, and the corporation has one or more business
offices in California, the board of directors shall fix and designate a
principal business office in California.
Section 2. OTHER OFFICES. Branch or subordinate offices may be
established at any time and at any place by the board of directors.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at
any place within or outside the State of California designated by the board
of directors. In the absence of a designation by the board, shareholders'
meetings shall be held at the corporation's principal executive office.
Section 2. ANNUAL MEETING. The annual meeting of the shareholders
shall be held each year on a date and at a time designated by the board of
directors. At each annual meeting, directors shall be elected, and any other
proper business within the power of the shareholders may be transacted. The
date so designated shall be within five (5) months after the end of the
corporation's fiscal year, and within fifteen (15) months after the last
annual meeting.
Section 3. SPECIAL MEETING. A special meeting of the shareholders may
be called at any time by the board of directors, by the chairman of the
board, by the president or by one or more shareholders holding shares that in
the aggregate are entitled to cast ten percent or more of the votes at that
meeting.
If a special meeting is called by anyone other than the board of
directors, the person or persons calling the meeting shall make a request in
writing, delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission, to the chairman of the board or the president,
vice president, or secretary, specifying the time of the meeting (which is
not less than 35 or more than 60 days after receipt of the request) and the
general nature of the business proposed to be transacted. Within 20 days
after receipt, the officer receiving the request shall cause notice to be
given to the shareholders entitled to vote, in accordance with Sections 4 and
5 of this Article II, stating that a meeting will be held at the time
requested by the person(s) calling the meeting, and stating the general
nature of the business proposed to be transacted. If notice is not given
within 20 days after receipt of the request, the person or persons requesting
the meeting may give the notice. Nothing contained in this paragraph shall be
construed as limiting, fixing, or affecting the time when a meeting of
shareholders called by action of the board may be held.
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 5 of
this Article II not fewer than 10 nor more than 60 days before the date of
the meeting. Shareholders entitled to notice shall be determined in
accordance with Section 11 of this Article II. The notice shall specify the
place, date, and hour of the meeting, and (i) in the case of 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. If
directors are to be elected, the notice shall include the names of all
nominees whom the board intends at the time of the notice, to present for
election.
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The notice shall also state the general nature of any proposed action to
be taken at the meeting to approve any of the following matters: (i) a
transaction in which a director has a material financial interest, within the
meaning of Section 310 of the California Corporation Code; (ii) an amendment
of the articles of incorporation under Section 902 of that Code; (iii) a
reorganization under Section 1201 of that Code; (iv) a voluntary dissolution
under Section 1900 of that Code; or (v) a distribution in dissolution that
requires approval of the outstanding shares under Section 2007 of that Code.
Section 5. MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any
shareholders' meeting shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to
the shareholder at the address appearing on the corporation's books or given
by the shareholder to the corporation for the purposes of notice. If no
address appears on the corporation's books or has been given as specified
above, notice shall be either (1) sent by first-class mail addressed to the
shareholder at the corporation's principal executive office, or (2) published
at least once in a newspaper of general circulation in the county where the
corporation's principal executive office is located. Notice is deemed to
have been given at the time when delivered personally or deposited in the
mail or sent by other means of written communication.
If any notice or report mailed to a shareholder at the address appearing
on the corporation's books is returned to the corporation by the United
States Postal Service marked to indicate that the United States Postal
Service is unable to deliver the document to the shareholder at that address,
all future notices or reports shall be deemed to have been duly given without
further mailing if the corporation holds the document available for the
shareholder on written demand at the corporation's principal executive office
for a period of one year from the date the notice or report was given to all
other shareholders.
An affidavit of the mailing, or other authorized means of given notice
or delivering a document, of any notice of shareholders' meeting, report, or
other document sent to shareholders, may be executed by the corporation's
secretary, assistant secretary, or transfer agent, and shall be filed and
maintained in the minute book of the corporation.
Section 6. QUORUM. The presence in person or by proxy of the holders
of a majority of the shares entitled to vote at any 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.
Section 7. ADJOURNED MEETING; NOTICE. Any shareholders meeting, annual
or special, whether or not a quorum is present, may be adjourned from time to
time by the vote of the majority of the shares represented at that meeting,
either in person or by proxy, but in the absence of a quorum, no other
business may be transacted at that meeting, except as provided in Section 6
of this Article II.
When any meeting of the shareholders, either annual or special, is
adjourned to another time or place, notice of the adjourned meeting need not
be given if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless a new record date for the adjourned meeting
is fixed, or unless the adjournment is for more than 45 days from the date
set for the original meeting, in which case the board of directors shall set
a new record date and notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Section 4 and 5 of this Article II. At any
adjourned meeting, the corporation may transact any business which might have
been transacted at the original meeting.
Section 8. VOTING. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section
11 of this Article II, subject to the provisions of Section 702 through 704,
inclusive, of the California Corporations Code (relating to voting shares
held by a fiduciary, in the name of the corporation, or in joint ownership).
The shareholders' vote may be by voice vote or
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by ballot, provided, however, that any election for directors must be by
ballot if demanded by any shareholder before the voting has begun. On any
matter other than election of directors, any shareholder may vote part of the
shares in favor of the proposal and refrain from voting the remaining shares
or vote them against the proposal, but, if the shareholder fails to specify
the number of shares that the shareholder is voting affirmatively, it will be
conclusively presumed that the shareholder's approving vote is with respect
to all shares that the shareholder is entitled to vote. If a quorum is
present, (or, if a quorum has been present earlier at the meeting, but some
shareholders have withdrawn), the affirmative vote of a majority of the
shares represented and voting, provided such shares voting affirmatively also
constitute a majority of the number of shares required for a quorum, shall be
the act of the shareholders, unless the vote of a greater number or voting by
classes is required by law or by the articles of incorporation.
At a shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any
candidate a number of votes greater than the number of votes which that
shareholder normally would be entitled to cast) unless such candidates' names
have been placed in nomination before commencement of the voting and a
shareholder has given notice before the voting has begun of the shareholder's
intention to cumulate votes. If any one shareholder has given such a notice,
then all shareholders entitled to vote may cumulate their votes for
candidates in nomination, and may give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of votes to
which that shareholder's shares are normally entitled, or distribute the
shareholders 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.
Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed and wherever held, shall be as valid as though they were
had at a meeting duly held after regular call and notice, if a quorum is
present either in person or by proxy, and if each person entitled to vote who
was not present in person or by proxy, either before or after the meeting,
signs a written waiver of notice or a consent to holding the meeting or an
approval of the minutes of the meeting. The waiver of notice or consent need
not specify either the business to be transacted or the purpose of any annual
or special meeting of shareholders, except that if action is taken or
proposed to be taken for approval of any of those matters specified in
Section 601(f) of the California Corporations Code, the waiver of notice or
consent is required to state the general nature of the action or proposed
action. All waivers, consents, and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
A shareholder's attendance at a meeting also constitutes a waiver of
notice of that meeting, unless the shareholder at the beginning of the
meeting objects to the transaction of any business on the ground that the
meeting was not lawfully called or convened. In addition attendance at a
meeting does not constitute a waiver of any right to object to consideration
of matters required by law to be included in the notice of the meeting which
were not so included, if that objection is expressly made at the meeting.
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Any action that could be taken at an annual or special meeting of
shareholders may be taken without a meeting and without prior notice, if
consent in writing, setting forth the action so taken, is signed by the
holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take that action at a meeting
at which all shares entitled to vote on that action were present and voted.
Directors may be elected by written consent of the shareholders without
a meeting only if the written consents of all outstanding shares entitled to
vote are obtained, except that vacancies on the board (other than vacancies
created by removal) not filled by the board may be filled by the written
consent of the holders of a majority of the outstanding shares entitled to
vote.
All consents shall be filed with the secretary of the corporation and
shall be maintained in the corporate records. Any shareholder or other
authorized person who has given a written consent may revoke it by a writing
received by the secretary of the corporation before written consents of the
number of shares required to authorize the proposed action have been filed
with the secretary.
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Unless the consents of all shareholders entitled to vote have been
solicited in writing, prompt notice shall be given of any corporate action
approved by shareholders without a meeting by less than unanimous consent, to
those shareholders entitled to vote who have not consented in writing. As to
approvals required by California Corporations Code Section 310 (transactions
in which a director has a financial interest), Section 317 (indemnification
of corporate agents), Section 1201 (corporate reorganization), or Section
2007 (certain distributions on dissolution), notice of the approval shall be
given at least 10 days before the consummation of any action authorized by
the approval. Notice shall be given in the manner specified in Section 5 of
this Article II.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING AND
GIVING CONSENT.
(a) For purposes of determining the shareholders entitled to receive
notice of and vote at a shareholders' meeting or give written consent to
corporate action without a meeting, the board may fix, in advance, a record
date that is not more than 60 nor less than 10 days before the date of a
shareholders' meeting, or not more than 60 days before any other action.
(b) If no record date is fixed:
(i) The record date for determining shareholders entitled to
receive notice of and vote at a shareholders' meeting shall be the business
day next preceding the day on which notice is given, or if notice is waived
as provided in Section 9 of this Article II, the business day next preceding
the day on which the meeting is held;
(ii) The record date for determining shareholders entitled to
give consent to corporate action in writing without a meeting, if no prior
action has been taken by the board, shall be the day on which the first
written consent is given;
(iii) The record date for determining shareholders for any other
purpose shall be as set forth in Section 1 of Article VIII of these bylaws.
(c) A determination of shareholders of record entitled to receive
notice of and vote at a shareholder's meeting shall apply to any adjournment
of the meeting unless the board fixes a new record date for the adjourned
meeting. However, the board shall fix a new record date if the adjournment is
to a date more than 45 days after the date set for the original meeting.
(d) Only shareholders of record on the corporation's books at the
close of business on the record date shall be entitled to any of the notice
and voting rights listed in subsection (a) of this section, notwithstanding
any transfer of shares on the corporation's books after the record date,
except as otherwise required by law.
Section 12. PROXIES. Every person entitled to vote for directors or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the secretary of the corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the shareholder or
the shareholder's attorney in fact. A validly executed proxy that does not
state that it is irrevocable shall continue in full force and effect unless
(a) revoked by the person executing it, before the vote pursuant to that
proxy, by a writing delivered to the corporation stating that the proxy is
revoked, or voting in person by the person executing the proxy or by a
subsequent proxy executed by the same person and presented at the meeting; or
(b) written notice of the death or incapacity of the maker of that proxy is
received by the corporation before the vote pursuant to that proxy is
counted; provided, however, that no proxy shall be valid after the expiration
of 11 months from the date of the proxy, unless otherwise provided in the
proxy. The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of Sections 705(e) and 705(f)
of the California Corporations Code.
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Section 13. 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 or three. If inspectors are appointed at a meeting on the request
of one or more shareholders or proxies, the meeting shall determine whether
one or three 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 that vacancy.
These inspectors shall:
(a) 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;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes or consents;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct the election or
vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
Section 1. POWERS. Subject to the provisions of the California
General Corporation Law 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 these general powers, and subject to the same
limitations, the directors shall have the power to:
(a) Select and remove all officers, agents and employees of the
corporation; prescribe any powers and duties for them that are consistent
with law, with the articles of incorporation, and with these bylaws; fix
their compensation, and require from them security for faithful service.
(b) 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 country and conduct business within or outside the State of
California; and designate and place within or outside the State of California
for the holding of any shareholders' meeting, or meetings, including annual
meetings.
(c) Adopt, make and use a corporate seal, prescribe the forms of
certificates of stock; and alter the form of the seal and certificates.
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(d) Authorize the issuance of shares of stock of the corporation on
any lawful terms, in consideration of money paid, labor done, services
actually rendered, debts or securities canceled, or tangible or intangible
property actually received.
(e) Borrow money and incur indebtedness on behalf of the
corporation, and cause to be executed and delivered for the corporation's
purposes, in the corporate name, promissory notes, bonds, debentures, deeds
of trust, mortgages, pledges, hypothecations and other evidences of debt and
securities.
Section 2. NUMBER OF DIRECTORS. The number of directors shall not be
less than four (4) nor more than seven (7) as determined by approval of the
board, until changed by a duly adopted amendment to the articles of
incorporation or by an amendment to this bylaw adopted by the vote or written
consent of a majority of the outstanding shares entitled to vote. However, an
amendment that would reduce the authorized number of directors to a number
less than five cannot be adopted if the votes cast against its adoption at a
shareholders' meeting, or the shares not consenting to an action by written
consent, are equal to more than one sixth (16 2/3%) of the outstanding shares
entitled to vote.
Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be
elected at each annual meeting of the shareholders to hold office until the
next annual meeting. Each director, including a director elected to fill a
vacancy, shall hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
No reduction of the authorized number of directors shall have the effect
of removing any director before that director's term of office expires.
Section 4. VACANCIES. A vacancy in the board of directors shall be
deemed to exist (a) if a director dies, resigns, or is removed by the
shareholders or an appropriate court, as provided in sections 303 or 304 of
the California Corporations Code; (b) if the board of directors declares
vacant the office of a director who has been convicted of a felony or
declared of unsound mind by an order of court; (c) if the authorized number
of directors is increased; or (d) if at any shareholders' meeting at which
one or more directors are elected the shareholders fail to elect the full
authorized number of directors to be voted for at that meeting.
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary, or the board of
directors, unless the notice specifies a later effective date. If the
resignation is effective at a future time, the board may elect a successor to
take office when the resignation becomes effective.
Except for a vacancy caused by the removal of a director, vacancies on
the board may be filled by a majority of the directors then in office,
whether or not they constitute a quorum, or by a sole remaining director. A
vacancy on the board caused by the removal of a director may be filled only
by the shareholders, except that a vacancy created when the board declares
the office of a director vacant as provided in clause (b) of the first
paragraph of this section of the bylaws may be filled by the board of
directors.
The shareholders may elect a director at any time to fill a vacancy not
filled by the board of directors.
The term of office of a director elected to fill a vacancy shall run
until the next annual meeting of the shareholders, and such a director shall
hold office until a successor is elected and qualified.
Section 5. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE. Regular meetings
of the board of directors may be held at any place within or outside the
State of California as designated from time to time by the board. In the
absence of a designation, regular meetings shall be held at the principal
executive office of the corporation. Special meetings of the board shall be
held at any place within or outside the State of California designated in the
notice of the meeting, or if the notice does not state a place, or if there
is no notice, at the principal executive office of the corporation. Any
meeting, regular or special, may be held by conference telephone or similar
communication equipment, provided that all directors participating can hear
one another.
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Section 6. ANNUAL DIRECTORS' MEETING. Immediately after each annual
shareholders' meeting, the board of directors shall hold a regular meeting at
the same place, or at any other place that has been designated by the board
of directors, to consider matters of organization, election of officers and
other business as desired. Notice of this meeting shall not be required
unless some place other than the place of the annual shareholders' meeting
has been designated.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the board
of directors shall be held without call at times to be fixed by the board of
directors from time to time. Such regular meetings may be held without notice.
Section 8. SPECIAL MEETINGS. Special meetings of the board of
directors may be called for any purpose or purposes at any time by the
chairman of the board, the president or any two directors.
Special meetings shall be held on four days' notice by mail or
forty-eight hours' notice delivered personally or by telephone or telegraph.
Oral notice given personally or by telephone may be transmitted either to the
director or to a person at the director's office who can reasonably be
expected to communicate it promptly to the director. Written notice, if used,
shall be addressed to each director at the address shown on the corporation's
records. The notice need not specify the purpose of the meeting, nor need it
specify the place if the meeting is to be held at the principal executive
office of the corporation.
Section 9. QUORUM. A majority of the number of directors as determined
from time to time by the board as provided for herein shall constitute a
quorum for the transaction of business, except to adjourn as provided in
Section 11 of this Article III and subject to the requirements set forth
under Section 307(a)(7) of the California Corporations Code. 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
California Corporations Code (as to approval of contracts or transactions in
which a director has a direct or indirect material financial interest),
Section 311 (as to appointment of committees), and Section 317(e) (as to
indemnification of directors). A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
directors, if any action taken is approved by at least a majority of the
required quorum for that meeting.
Section 10. WAIVER OF NOTICE. Notice of a meeting although otherwise
required, need not be given to any director who (a) either before or after
the meeting signs a waiver of notice or a consent to holding the meeting
without being given notice, (b) signs an approval of the minutes of the
meeting, or (c) attends the meeting without protesting the lack of notice
before or at the beginning of the meeting. Waivers of notice or consents need
not specify the purpose of the meeting. All waivers, consents, and approvals
of the minutes shall be filed with the corporate records or made a part of
the minutes of the meeting.
Section 11. ADJOURNMENT TO ANOTHER TIME OR PLACE. Whether or not
constituting a quorum, a majority of the directors present may adjourn any
meeting to another time and place.
Section 12. NOTICE OF ADJOURNED MEETING. Notice of the time and place
of resuming a meeting that has been adjourned need not be given, unless the
adjournment is for more than 24 hours, in which case notice shall be given,
before the time set for resuming the adjourned meeting, to the directors who
were not present at the time of adjournment. Notice need not be given in any
case to directors who were present at the time of adjournment.
Section 13. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the board of directors may be taken without a meeting, if all
members of the board shall individually or collectively consent in writing to
that action. Such action by written consent shall have the same force and
effect as a unanimous vote of the board of directors. All written consents
shall be filed with the minutes of the proceedings of the board of directors.
Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors and members
of committees of the board may be compensated for their services, and shall
be reimbursed for expenses, as fixed or
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determined by resolution of the board of directors and approved by the
shareholders. This section shall not be construed to preclude any director
from serving the corporation in any other capacity, as an officer, agent,
employee, or otherwise, and receiving compensation for those services.
ARTICLE IV
COMMITTEES
Section 1. EXECUTIVE AND OTHER COMMITTEES OF THE BOARD. The board of
directors may, by resolution adopted by a majority of the authorized number
of directors, designate an executive committee or one or more other
committees, each consisting of two or more directors. The board may designate
one or more directors as alternate members of any committee, to replace any
absent member at a committee meeting. The appointment of committee members or
alternative members requires a vote of a majority of the authorized number of
directors. A committee may be granted any or all of the powers and authority
of the board, to the extent provided in the resolution of the board, except
with respect to:
(a) Approving any action for which the California Corporations Code
also requires the approval of the shareholders of the outstanding shares;
(b) Filling vacancies on the board of directors or any committee of the
board;
(c) Fixing directors' compensation for serving on the board or a
committee of the board;
(d) Adopting, amending, or repealing bylaws;
(e) Amending or repealing any resolution of the board of directors
which by its express terms is not so amendable or repealable;
(f) Making distributions to shareholders, except at a rate or in a
periodic amount or within a price range determined by the board of directors;
or
(g) Appointing other committees of the board or their members.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and action of
committees shall be governed by, and held and taken in accordance with, bylaw
provisions applicable to meetings and actions of the board of directors, as
provided in Section 5 and Sections 7 through 13 of Article III of these
bylaws, as to the following matters: place of meetings, Section 5; regular
meeting, Section 7; special meetings and notice, Section 8; quorum, Section
9; waiver of notice, Section 10; adjournment, Section 11, notice of
adjournment, Section 12; and action without meeting, Section 13, 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 (a) the time of regular meetings of committees may be determined either
by resolution of the board of directors or by resolution of the committee;
(b) special meetings of committees may also be called by resolution of the
board of directors; and (c) 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
governance of any committee not inconsistent with the provisions of these
bylaws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be a Chief
Executive Officer and 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 3 of this Article
V. Any number of offices may be held by the same person.
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Section 2. ELECTION OF OFFICERS. The officers of the corporation,
except for subordinate officers appointed in accordance with the provisions
of Section 3 of this Article V, shall be chosen by the board of directors,
and shall serve at the pleasure of the board of directors.
Section 3. SUBORDINATE OFFICERS. The board of directors may appoint,
and may empower the president to appoint other officers as required by the
business of the corporation, whose duties shall be as provided in the bylaws
or as determined from time to time by the board of directors or the president.
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Any officer chosen by
the board of directors may be removed at any time, with or without cause or
notice, by the board of directors. Subordinate officers appointed by persons
other than the board under Section 3 of this Article V may be removed at any
time, with or without cause or notice, by the board of directors or by the
officer by whom appointed. Officers may be employed for a specified term
under a contract of employment if authorized by the board of directors; such
officers may be removed from office at any time under this section, and shall
have no claim against the corporation nor individual officers or board
members because of the removal except any right to monetary compensation to
which the officer may be entitled under the contract of employment.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect on the date of receipt of the
notice unless a later time is specified in the notice. Unless otherwise
specified in the notice, acceptance of the resignation is not necessary to
make it effective. Any resignation is without prejudice to the rights, if any,
of the corporation to monetary damages under any contract of employment to
which the officer is a party.
Section 5. VACANCIES IN OFFICE. A vacancy in an office because of an
officer's death, resignation, removal, disqualification, or from any other
cause shall be filled in the manner prescribed in these bylaws for regular
election or appointment to that office.
Section 6. CHAIRMAN OF THE BOARD. The Board of Directors may elect a
chairman who shall preside, if present, at board meetings and shall exercise
and perform such other powers and duties as may be assigned from time to time
by the board of directors. 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 7 of this Article V.
Section 7. PRESIDENT. Except to the extent that the bylaws or the
board of directors assign specific powers and duties to the chairman of the
board (if any), the president shall be the corporation's general manager and
chief executive officer and, subject to the control of the board of
directors, shall have general supervision, direction, and control over the
corporation's business and its officers. The managerial powers and duties to
the president shall include, but are not limited to, all the general powers
and duties of management usually vested in the office of president of a
corporation, and the president shall have other powers and duties as
prescribed by the board of directors or the bylaws. The president shall
preside at all meetings of the shareholders and, in the absence of the
chairman of the board or if there is no chairman of the board, shall also
preside at meetings of the board of directors.
Section 8. VICE PRESIDENTS. If desired, one or more vice presidents
may be chosen by the board of directors in accordance with the provisions for
electing officers set forth in Section 2 of this Article V. In the absence or
disability of the president, the president's duties and responsibilities
shall be carried out by the highest ranking available vice president if vice
presidents are ranked, or if not, by a vice president designated by the board
of directors. When so acting, a vice president shall have all the powers of
and be subject to all the restrictions on the president. Vice presidents of
the corporation shall have such other powers and perform such other duties as
prescribed from time to time by the board of directors, the bylaws, or the
president (or chairman of the board if there is no president).
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Section 9. SECRETARY.
(a) MINUTES. The secretary shall be present at all shareholders'
meetings and all board meetings and shall take the minutes of the meeting. If
the secretary is unable to be present, the secretary or the presiding
officer of the meeting shall designate another person to take the minutes of
the meeting.
The secretary shall keep, or cause to be kept, at the principal
executive office or such other place as designated by the board of
directors, a book of minutes of all meetings and actions of the
shareholders, of the board of directors, and of committees of the board. The
minutes of each meeting shall state the time and place the meeting was held;
whether it was regular or special; if special, how it was called or
authorized; the names of directors present at board or committee meetings;
the number of shares present or represented at shareholders' meetings; and an
accurate account of the proceedings.
(b) RECORD OF SHAREHOLDERS. The secretary shall keep, or cause to be
kept at the principal executive office or at the office of the transfer agent
or registrar, a record or duplicate record of shareholders. This record shall
show the names of all shareholders and their addresses, the number and
classes of shares held by each, the number and date of share certificates
issued to each shareholder, and the number and date of cancellation of any
certificates surrendered for cancellation.
(c) NOTICE OF MEETINGS. The secretary shall give notice, or cause
notice to be given, of all shareholders' meetings, board meetings, and
meetings of committees of the board for which notice is required by statute
or by the bylaws. If the secretary or other person authorized by the
secretary to give notice fails to act, notice of any meeting may be given by
any other officer of the corporation.
(d) OTHER DUTIES. The secretary shall keep the seal of the
corporation, if any, in safe custody. The secretary shall have such other
powers and perform other duties as prescribed by the board of directors or by
the bylaws.
Section 10. CHIEF FINANCIAL OFFICER. The chief financial officer shall
keep or cause to be kept 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 (1) deposit corporate funds and other
valuables in the corporation's name and to its credit with depositaries
designated by the board of directors; (2) make disbursements of corporate
funds as authorized by the board; (3) render a statement of the corporation's
financial condition and an account of all transactions conducted as chief
financial officer whenever requested by the president or the board of
directors; and (4) have other powers and perform other duties as prescribed
by the board of directors or the bylaws.
Unless the board of directors has elected a separate treasurer, the
chief financial officer shall be deemed to be the treasurer for purposes of
giving any reports or executing any certificates or other documents.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS
Section 1. AGENTS, PROCEEDINGS AND EXPENSES. For the purposes of this
Article, "agent" means any person who is or was a director, officer,
employee, or other agent of this corporation, or is or was serving at the
request of this corporation as a director, officer, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, or was a director, officer, employee, or agent of a foreign
or domestic corporation which was a predecessor corporation of this
corporation or of another enterprise at the request of such predecessor
corporation; "proceeding" means any threatened, pending or completed action
or proceeding, whether civil, criminal, administrative, or investigative; and
"expenses" include,
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without limitation, attorney's fees and any expenses of establishing a right
to indemnification under Section 4 or Section 5(c) of this Article VI.
Section 2. ACTIONS OTHER THAN BY THE CORPORATION. This corporation
shall have the power to indemnify any person who was or is a party, or is
threatened to be made a party, to any proceeding (other than an action by or
in the right of this corporation to procure a judgment in its favor), by
reason of the fact that such person is or was an agent of this corporation,
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in the connection with such proceeding if that person
acted in good faith and in a manner that person reasonably believed to be in
the best interests of the corporation and, in the case of a criminal
proceedings, had no reasonable cause to believe the conduct of that person
was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendre or its equivalent
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which the person reasonably believed to be in the
best interests of this corporation, or that the person had reasonable cause
to believe that the person's conduct was unlawful.
Section 3. ACTIONS BY THE CORPORATION. This corporation shall have the
power to indemnify any person who was or is a party, or is threatened to be
made a party, to any threatened, pending or completed action by or in the
right of this corporation to procure a judgment in its favor by reason of the
fact that the person is or was an agent of this corporation, against expenses
actually and reasonably incurred by that person in connection with the
defense or settlement of that action if that person acted in good faith, in a
manner that person believed to be in the best interests of this corporation
and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances. No
indemnification shall be made under this Section 3:
(a) With respect to any claim, issue or matter as to which that person
shall have been adjudged to be liable to this corporation in the performance
of that person's duty to this corporation, unless and only to the extent that
the court in which that action is or was pending shall determine upon
application that, in view of all the circumstances of the case, that person
is fairly and reasonably entitled to indemnity of the expenses which the
court shall determine;
(b) Of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval; or
(c) Of expenses incurred in defending a threatened or pending action
that is settled or otherwise disposed of without court approval.
Section 4. SUCCESSFUL DEFENSE BY AGENT. To the extent that an agent of
this corporation has been successful on the merits in defense of any
proceeding referred to in Section 2 or 3 of this Article VI, or in defense of
any claim, issue, or matter therein, the agent shall be indemnified against
expenses actually and reasonably incurred by the agent in connection
therewith.
Section 5. REQUIRED APPROVAL. Except as provided in Section 4 of this
Article VI, any indemnification under this Article shall be made by this
corporation only if authorized in the specific case, upon a determination
that indemnification of the agent is proper in the circumstances because the
agent has met the applicable standard of conduct set forth in Section 2 or 3
of this Article VI, by one of the following:
(a) A majority vote of a quorum consisting of directors who are not
parties to the proceedings or by independent legal counsel in a written
opinion if such quorum of directors is not obtainable;
(b) (i) the affirmative vote of a majority of the shares of this
corporation entitled to vote represented at a duly held meeting at which a
quorum is present; or
(c) (ii) The written consent of holders of a majority of the
outstanding shares entitled to vote (for purposes of this subsection 5(b),
the shares owned by the person to be indemnified shall not be considered
outstanding or entitled to vote thereon); or
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(c) The court in which the proceedings is or was pending, on
application made by this corporation or the agent or the attorney or other
person rendering services in connection with the defense, whether or not such
application by the agent, attorney, or other person is opposed by this
corporation.
Section 6. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding may be advanced by this corporation before the final disposition of
the proceeding on receipt of an undertaking by or on behalf of the agent to
repay the amount of the advanced unless it shall be determined ultimately
that the agent is entitled to be indemnified as authorized in this Article.
Section 7. OTHER CONTRACTUAL RIGHTS. Nothing contained in this Article
shall affect any right to indemnification to which persons other than
directors and officers of this corporation or any subsidiary hereof may be
entitled by contract or otherwise.
Section 8. LIMITATIONS. No indemnification or advance shall be made
under this Article, except as provided in Section 4 or Section 5(c), in any
circumstances where it appears:
(a) That it would be inconsistent with a provision of the articles, a
resolution of the shareholders, or an agreement in effect at the time of the
accrual of the alleged cause of action asserted in the proceedings in which
the expenses were incurred or other amounts were paid, which prohibits or
otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 9. INSURANCE. If so decided by the board of directors, this
corporation may purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by the agent
in such capacity or arising out of the agent's status as such whether or not
this corporation would have the power to indemnify the agent against that
liability under the provisions of this section.
Section 10. FIDUCIARIES OF CORPORATE EMPLOYEE BENEFIT PLAN. This Article
does not apply to any proceeding against any trustee, investment manager, or
other fiduciary of an employee benefit plan in that person's capacity as such,
event though that person may also be an agent of the corporation. The
corporation shall have the power to indemnify, and to purchase and maintain
insurance on behalf of, any such trustee, investment manager, or other
fiduciary of any benefit plan for any or all of the directors, officers and
employees of the corporation or any of its subsidiary or affiliated
corporations.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The
corporation shall keep at its principal executive office, or at the office of
its transfer agent or registrar, if either be appointed and as determined by
resolution of the board of directors, a record of 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 a least five
percent in the aggregate of the outstanding voting shares of the corporation
have the right to do either of both of the following: (a) inspect and copy
the record of shareholders' names and addresses and shareholdings during usual
business hours, on five days' prior written demand on the corporation, or (b)
obtain from the corporation's transfer agent, on written demand and tender of
the transfer agent's usual charges for this service, a list of the names and
address of shareholders who are entitled to vote for the election of
directors, and their shareholdings, as of the most recent record date for
which a list has been compiled or as of a specified date later than the date
of demand. This list shall be made available within five days after (i)
the date of demand, or (ii) the specified later date as of which the list is
to be compiled. The record of shareholders shall also be open to inspection
on the written demand of any shareholder or holder of a voting trust
certificate, at any time during usual business hours, for a purpose
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reasonably related to the holder's interests as a shareholder or 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 the demand.
Section 2. 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 reasonable times during
office hours. If the principal executive office of the corporation is outside
the State of California and the corporation has no principal business office
in this state, the secretary shall, upon the written request of any
shareholder, furnish to that shareholder a copy of the bylaws as amended to
date.
Section 3. MAINTENANCE AND INSPECTION OF MINUTES AND ACCOUNTING
RECORDS. The minutes of proceedings of the shareholders, board of directors,
and committees of the board, and the accounting books and records shall be
kept at the principal executive office of the corporation, or at such other
place or places as designated by the board of directors. The minutes shall be
kept in written form, and the accounting books and records shall be kept
either in written form or in a form capable of being converted into written
form. The minutes and accounting books and records shall be open to
inspection on the written demand of any shareholder or holder of a voting
trust certificate at any reasonable time during usual business hours, or a
purpose reasonably related to the holder's interests as a shareholder or
holder of a voting trust certificate. The inspection may be made in person or
by an agent or attorney, and shall include the right to copy and make
extracts. These rights of inspection shall extend to the records of each
subsidiary of the corporation.
Section 4. INSPECTION BY DIRECTORS. Every director shall have the
absolute right at any reasonable time to inspect all books, records and
documents of every kind and the physical properties of the corporation and
each of its subsidiary corporations. This inspection by a director may be
made in person or by an agent or attorney and the right or inspection
includes the right to copy and make extracts of documents.
Section 5. ANNUAL REPORT TO SHAREHOLDERS. Inasmuch as, and for as long
as, there are fewer than 100 shareholders, the requirement of an annual
report to shareholders referred to in Section 1501 of the California
Corporations Code is expressly waived. However, nothing in this provision
shall be interpreted as prohibiting the board of directors from issuing
annual or other periodic reports to the shareholders, as the board considers
appropriate.
Section 6. FINANCIAL STATEMENTS. The corporation shall keep a copy of
each annual financial statement, quarterly or other periodic income
statement, and accompanying balance sheets prepared by the corporation on
file in the corporation's principal executive office for 12 months; these
documents shall be exhibited at all reasonable times, or copies provided, to
any shareholder on demand.
If no annual report for the last fiscal year has been sent to
shareholders, on written request of any shareholder made more than 120 days
after the close of the fiscal year the corporation shall deliver or mail to
the shareholder, within 30 days after the receipt of the request, a balance
sheet as of the end of that fiscal year and an income statement and statement
of changes in financial position for that fiscal year.
A shareholder or shareholders holding five percent or more of the
outstanding shares of any class of stock of the corporation may request in
writing an income statement for the most recent three-month, six-month, or
nine-month period (ending more than 30 days before the date of the request)
of the current fiscal year, and a balance sheet of the corporation as of the
end of that period. If such documents are not already prepared the chief
financial officer shall cause them to be prepared and shall deliver the
documents personally or mail them to the requesting shareholders within 30
days after receipt of the request. A balance sheet, income statement, and
statement of changes in financial position for the last fiscal year shall
also be included, unless the corporation has sent the shareholders an annual
report for the last fiscal year.
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Quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of independent
accountants engaged by the corporation or the certificate of an authorized
corporate officer stating that the financial statements were prepared without
audit from the corporation's books and records.
Section 7. ANNUAL STATEMENT OF GENERAL INFORMATION.
(a) Every year, during the calendar month in which the original
articles of incorporation were filed with the California Secretary of State,
or during the preceding five calendar months, the corporation shall file a
statement with the Secretary of State on the prescribed form, setting forth
the authorized number of directors; the names and complete business or
residence addresses of all incumbent directors; the names and complete
business or residence address of the chief executive officer, the secretary,
and the chief financial officer; the street address of the corporation's
principal executive office in this state; a statement of the general type of
business constituting the principal business activity of the corporation; and
a designation of the agent of the corporation for the purpose of service of
process, all in compliance with section 1502 of the California Corporations
Code.
(b) Notwithstanding the provisions of paragraph (a) of this section, if
there has been no change in the information contained in the corporation's
last annual statement on file in the Secretary of State's office, the
corporation may, in lieu of filing the annual statement described in
paragraph (a) of this section, advise the Secretary of State, on the
appropriate form, that no changes in the required information have occurred
during the applicable period.
ARTICLE VIII
GENERAL CORPORATE MATTERS
Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For
purposes of determining the shareholders entitled to receive payment of
dividends or other distributions or allotment of rights, or entitled to
exercise any rights in respect of any other lawful action (other than voting
at and receiving notice of shareholders' meetings and giving written consent
of the shareholders without a meeting), the board of directors may fix in
advance a record date which shall be not more than 60 nor less than 10 days
before the date of the dividend payment, distribution, allotment, or other
action. If a record date is so fixed, only shareholders of record at the
close of business on that date shall be entitled to receive the dividend,
distribution, or allotment of rights, or to exercise the other rights, as the
case may be, notwithstanding any transfer of shares on the corporation's book
after the record date, except as otherwise provided by statute.
If the board of directors does not so fix a record date in advance, the
record date shall be at the close of business on the later of (1) the day on
which the board of directors adopts the applicable resolution or (2) the 60th
day before the date of the dividend payment, distribution, allotment of
rights, or other action.
Section 2. AUTHORIZED SIGNATORIES FOR CHECKS. All checks, drafts, 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 authorized from time to time by
resolution of the board of directors.
Section 3. EXECUTING CORPORATE CONTRACTS AND INSTRUMENTS. Except as
otherwise provided in the articles or in these bylaws, the board of directors
by resolution may authorize any officer, officers, agent, or agents to enter
into any contract or to execute any instrument in the name of and on behalf
of the corporation. This authority may be general or it may be confined to
one or more specific matters. No officer, agent, employee, or other person
purporting to act on behalf of the corporation shall have any power or
authority to bind the corporation in any way, to pledge the corporation's
credit, or to render the corporation liable for any purpose or in any amount,
unless that person was acting with authority duly granted by the board of
directors as provided in these bylaws, or unless an unauthorized act was
later ratified by the corporation.
Section 4. CERTIFICATES FOR SHARES. A certificate or certificates for
shares of the capital stock of the corporation shall be issued to each
shareholder when any of the shares are fully paid. In addition to
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certificates for fully paid shares, the board of directors may authorize the
issuance of certificates for shares that are partly paid and subject to call
for the remainder of the purchase price, provided that the certificates
representing partly paid shares shall state the total amount of the
consideration to be paid for the shares and the amount actually paid.
All certificates shall certify the number of shares and the class or
series of shares represented by the certificate. All certificates shall be
signed in the name of the corporation by (1) either the chairman of the board
of directors, the vice chairman of the board of directors, the president, or
any vice president, and (2) either the chief financial officer, treasurer,
any assistant treasurer, the secretary, or any assistant secretary.
Any of the signatures on the certificate may be facsimile. If any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed on a certificate shall cease to be that officer,
transfer agent, or registrar before that certificate is issued, the
certificate may be issued by the corporation with the same effect as if that
person were an officer, transfer agent, or registrar at the date of issue.
Section 5. LOST CERTIFICATES. Except as provided in this Section 5, no
new certificates for shares shall be issued to replace old certificates
unless the old certificate is surrendered to the corporation for cancellation
at the same time. If share certificates or certificates for any other
security have been lost, stolen, or destroyed, the board of directors may
authorize the issuance of replacement certificates on terms and conditions as
required by the board, which may include a requirement that the owner give
the corporation a bond (or other adequate security) sufficient to indemnify
the corporation against any claim that may be made against it (including any
expense or liability) on account of the alleged loss, theft, or destruction
of the old certificate or the issuance of the replacement certificate.
Section 6. SHARES OF OTHER CORPORATIONS; HOW VOTED. Shares of other
corporations standing in the name of this corporation shall be voted by one
of the following persons, listed in order of preference: (1) chairman of the
board, or person designated by the chairman of the board; (2) president, or
person designated by the president; (3) first vice president, or person
designated by the first vice president; (4) other person designated by the
board of directors.
The authority to vote shares granted by this section includes the
authority to execute a proxy in the name of the corporation for purposes of
voting the shares.
Section 7. CONSTRUCTION AND DEFINITIONS. Unless the context requires
otherwise, the general provisions, rules of construction, and definitions in
sections 100 through 195 of the California Corporations Code shall govern the
construction of these bylaws. Without limiting the generality of this
provision, the singular number includes the plural, the plural number
includes the singular, and the term "person" includes both a corporation and a
natural person.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY BOARD OF DIRECTORS OR SHAREHOLDERS. Except as
otherwise required or prohibited by law or by the articles of incorporation,
these bylaws may be amended or repealed, and new bylaws may be adopted, by
the board of directors or by the holders of a majority of the outstanding
shares entitled to vote.
Section 2. AMENDMENT IN CONFORMITY WITH LAW. To the extent these bylaws
make reference to a provision or provisions of the California Corporations
Code and any such provisions are renumbered, then these bylaws shall be
deemed to be amended to reflect such renumbering and, further, to the extent
any of the provisions of these bylaws are or subsequently become conflicting
with any substantive, mandatory requirement of the California Corporations
Code, then these bylaws shall be deemed to be amended to conform to such
applicable provisions of the California Corporations Code.
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