EXHIBIT 3.2
BYLAWS
OF
MILLERS AMERICAN GROUP, INC.
a Texas corporation
(the "Company")
(Adopted effective as of March 5, 1999)
<PAGE>
BYLAWS
ARTICLE I.
OFFICES
SECTION 1.1. REGISTERED OFFICE. The registered office and registered
agent of the corporation shall be located in Fort Worth, Texas.
SECTION 1.2. ADDITIONAL OFFICES. The Company may, in addition to its
registered office in the State of Texas, have such other offices and places
of business, both within and without the State of Texas, as the Board of
Directors of the Company (the "Board") may from time to time determine or
as the business and affairs of the Company may require.
ARTICLE II.
SHAREHOLDERS MEETINGS
SECTION 2.1. ANNUAL MEETINGS. Annual meetings of shareholders shall be
held at such place and time on any weekday which is not a holiday as shall
be designated by the Board and stated in the notice of the meeting, at
which the shareholders shall elect the directors of the Company and
transact such other business as may properly be brought before the meeting.
SECTION 2.2. SPECIAL MEETINGS. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by law or by the
articles of incorporation, (i) may be called by the chairman of the board
or the president and (ii) shall be called by the president or secretary at
the request in writing of a majority of the Board or shareholders owning
capital stock of the Company representing at least ten percent (10%) of the
votes of all capital stock of the Company entitled to vote thereat. Such
request of the Board or the shareholders shall state the purpose or
purposes of the proposed meeting.
SECTION 2.3. NOTICES. Written or printed notice of each shareholders'
meeting stating the place, date and hour of the meeting shall be given to
each shareholder of record entitled to vote thereat by or at the direction
of the president, the secretary or the officer or person calling such
meeting not less than ten (10) nor more than sixty (60) days before the
date of the meeting. If said notice is for a shareholders' meeting other
than an annual meeting, it shall in addition state the purpose or purposes
for which said meeting is called, and the business transacted at such
meeting shall be limited to the matters so stated in said notice and any
matters reasonably related thereto. If mailed, such notice shall be deemed
to be delivered when deposited in the United States mail addressed to each
shareholder at his address as it appears on the stock transfer books of the
Company, with postage thereon prepaid.
SECTION 2.4. QUORUM. The presence at a shareholders' meeting of the
holders, present in person or represented by proxy, of capital stock of the
Company representing a majority of the votes of all capital stock of the
Company entitled to vote thereat shall constitute a quorum at such meeting
<PAGE>
for the transaction of business except as otherwise provided by law, the
articles of incorporation or these Bylaws. If a quorum shall not be present
or represented at any meeting of the shareholders, a majority of the
shareholders entitled to vote thereat and present in person or represented
by proxy shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present or represented. At any such reconvened meeting at which a
quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally notified. If
the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the reconvened meeting, a notice
of said reconvened meeting shall be given to each shareholder entitled to
vote at said meeting. The shareholders present at a duly convened meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
SECTION 2.5. VOTING OF SHARES.
SECTION 2.5.1 VOTING LISTS. The officer or agent who has charge of
the stock transfer books of the Company shall prepare, at least ten (10) days
before every meeting of shareholders, a complete list of the shareholders
entitled to vote thereat arranged in alphabetical order and showing the
address and the number of shares registered in the name of each
shareholder. Such list shall be open to the examination of any such
shareholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held and at the
registered office of the Company. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may
be inspected by any shareholder who is present. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer books or to vote at any meeting
of shareholders. Failure to comply with the requirements of this section
shall not affect the validity of any action taken at said meeting.
SECTION 2.5.2 VOTES PER SHARE. Unless otherwise provided by law or in
the articles of incorporation, each shareholder shall be entitled to one vote,
in person or by proxy, on each matter submitted to a vote at a meeting of
the shareholders, for each share of capital stock held by such shareholder.
SECTION 2.5.3 PROXIES. Every shareholder entitled to vote at a meeting
or to express consent or dissent without a meeting or a shareholder's duly
authorized attorney-in-fact may authorize another person or persons to act
for him by proxy. Each proxy shall be in writing, executed by the
shareholder group, the proxy or by his duly authorized attorney. No proxy
shall be voted on or after eleven (11) months from its date, unless the
proxy provides for a longer period. Each proxy shall be revocable unless
expressly provided therein to be irrevocable and unless otherwise made
irrevocable by law.
<PAGE>
SECTION 2.5.4 REQUIRED VOTE. When a quorum is present at any meeting,
the vote of the holders of capital stock of the Company representing a majority
of the votes of all capital stock of the Company entitled to vote thereat
and present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which, by
express provision of law or the articles of incorporation or these Bylaws,
a different vote is required, in which case such express provision shall
govern and control the decision of such question.
SECTION 2.6. CONSENTS IN LIEU OF MEETING. Unless otherwise restricted by
law, the articles of incorporation or these Bylaws, any action required to
be or which may be taken at any meeting of shareholders may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by holders of
shares representing, in the aggregate, a majority of the shares (or, if
applicable, a majority of the shares of each class of capital stock)
entitled to vote with respect to the subject matter thereof. Such signed
consent shall have the same force and effect as a vote of shareholders
representing, in the aggregate, a majority of the shares (or, if
applicable, a majority of the shares of each class of capital stock) and
shall be filed with the minutes of proceedings of the shareholders.
ARTICLE III.
DIRECTORS
SECTION 3.1. GENERAL POWERS. The business and affairs of the Company
shall be managed by or under the direction of the Board, which may exercise
all such powers of the Company and do all such lawful acts and things as
are not by law, the articles of incorporation or these Bylaws directed or
required to be exercised or done by the shareholders. Directors need not be
shareholders or residents of the State of Texas.
SECTION 3.2. NUMBER. The number of directors constituting the Board
shall be fixed from time to time by resolution of the Board, but shall not
be more than twelve (12) nor less than nine (9). Until otherwise fixed by
resolution of the Board, the number of directors shall be the number stated
in the articles of incorporation.
SECTION 3.3. ELECTION. The directors shall be divided into three classes
as nearly equal in number as possible and one class of directors shall be
elected at each annual meeting of shareholders. The directors of the first
class shall be elected for a term of one year; the directors of the second
class shall be elected for a term of two years; the directors of the third
class shall be elected for a term of three years; and at each annual
election thereafter, the successors to the class of directors whose terms
<PAGE>
shall expire that year shall be elected to hold office for the term of
three years so that the term of office of one class of directors shall
expire in each year. Each director shall hold office until his successor
shall be elected and shall qualify. At the discretion of the Board, a
former director may be named a director emeritus. 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 decrease in the number of directors shall have
the effect of shortening the term of any incumbent director.
SECTION 3.4. VACANCIES AND NEWLY-CREATED DIRECTORSHIPS.
SECTION 3.4.1 VACANCIES. Any vacancy occurring in the Board may be
filled in accordance with subsection 3.4.3 or may be filled by the affirmative
vote of a majority of the remaining directors that were elected by the
holders of the class of capital stock which elected the director whose
directorship needs to be filled. A director elected to fill a vacancy
shall be elected for the unexpired term of his predecessor in office.
SECTION 3.4.2 NEWLY-CREATED DIRECTORSHIPS. A directorship to be filled
by reason of an increase in the number of directors may be filled in
accordance with subsection 3.4.3 or may be filled by the Board for a term
of office continuing only until the next election of one or more directors
by the shareholders; provided that (i) the Board may not fill more than two
(2) such directorships during the period between any two (2) successive
annual meetings of shareholders and (ii) any such newly created
directorships does not alter the representative ratio of directors to be
elected by the respective classes of capital stock of the Company as
provided in the Articles of Incorporation of the Company, as such articles
may be amended or restated.
SECTION 3.4.3 ELECTION BY SHAREHOLDERS. Any vacancy occurring in the
Board or any directorship to be filled by reason of an increase in the
number of directors may be filled by election at an annual or special
meeting of shareholders called for that purpose.
SECTION 3.5. REMOVAL. Unless otherwise restricted by law, the articles
of incorporation or these Bylaws, any director or the entire Board may be
removed for cause by a majority vote of the shares then entitled to vote at
an election of directors, if notice of the intention to act upon such
matter shall have been given in the notice calling such meeting.
SECTION 3.6. COMPENSATION. Unless otherwise restricted by law, the
articles of incorporation or these Bylaws, the directors may, by resolution
of the Board, be paid their expenses, if any, of attendance at each meeting
of the Board and may, by resolution of the Board, be paid one or more of
the following: (i) a fixed sum for attendance at each meeting of the Board,
(ii) a stated salary and (iii) a bonus as director. No such payment shall
preclude any director from serving the Company in any other capacity and
receiving compensation therefore for professional services performed by
such director for duties not placed by law upon such director. Further, by
resolution of the Board, a director emeritus may be compensated for
<PAGE>
attending meetings of the Board as determined by the Board. Members of
committees of the Board may be allowed like compensation for attending
committee meetings.
ARTICLE IV.
BOARD MEETINGS
SECTION 4.1. ANNUAL MEETINGS. The Board shall meet as soon as
practicable after the adjournment of each annual shareholders' meeting at
the place of such shareholders' meeting. No notice to the directors shall
be necessary to legally convene this meeting, provided a quorum is present.
SECTION 4.2. REGULAR MEETINGS. Regularly scheduled, periodic meetings of
the Board may be held without notice at such times and places as shall from
time to time be determined by resolution of the Board and communicated to
all directors.
SECTION 4.3. SPECIAL MEETINGS. Special meetings of the Board (i) may be
called by the chairman of the board or president and (ii) shall be called
by the president or secretary on the written request of two (2) directors.
Notice of each special meeting of the Board shall be given, either
personally or as hereinafter provided, to each director at least (i) twenty-
four (24) hours before the meeting if such notice is delivered personally
or by means of telephone, telegram, telex or facsimile transmission
delivery; (ii) two (2) days before the meeting if such notice is delivered
by a recognized express delivery service; and (iii) three (3) days before
the meeting if such notice is delivered through the United States mail.
Any and all business may be transacted at a special meeting which may be
transacted at a regular meeting of the Board. Except as may be otherwise
expressly provided by law, the articles of incorporation or these Bylaws,
neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in the notice or waiver of notice of such
meeting.
SECTION 4.4. QUORUM, REQUIRED VOTE. A majority of the directors shall
constitute a quorum for the transaction of business at any meeting of the
Board, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board, except as may be
otherwise specifically provided by law, the articles of incorporation or
these Bylaws. If a quorum shall not be present at any meeting, a majority
of the directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present.
SECTION 4.5. CONSENT IN LIEU OF MEETING. Unless otherwise restricted by
the articles of incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board or any committee thereof
may be taken without a meeting, if a consent in writing, setting forth the
action so taken, is signed by all the members of the Board or committee, as
the case may be. Such signed consent shall have the same force and effect
as a unanimous vote at a meeting and shall be filed with the minutes of
proceedings of the Board or committee.
<PAGE>
ARTICLE V.
COMMITTEES OF DIRECTORS
SECTION 5.1. ESTABLISHMENT; STANDING COMMITTEES. The Board may by
resolution establish, name or dissolve one or more committees (including
the Executive Committee, the Finance Committee, the Audit Committee, and
the Compensation Committee), each committee to consist of one or more of
the directors. Each committee shall keep regular minutes of its meetings
and report the same to the Board when required.
SECTION 5.1.1 EXECUTIVE COMMITTEE. The Executive Committee shall, from
time to time, meet as may deem necessary or advisable by the Chairman of
the Board. The Executive Committee shall consist of not less than three
(3) nor more than twelve (12) directors, two of whom shall be the Chairman
of the Board and the President if such offices are held by different
persons, and if such offices are held by the same person, then such person
shall be a member of the Executive Committee. Any member of the Executive
Committee may be removed by the Board by the affirmative vote of a majority
of the entire Board, whenever in its judgment the best interests of the
Corporation would be served thereby.
The Executive Committee, to the extent provided in applicable
resolutions, shall have and may exercise all of the authority of the Board
in the management of the business and affairs of the corporation, except
where action of the full Board is required by statute or by the articles of
incorporation, and shall have power to authorize the seal of the
corporation to be affixed to all papers which may require it.
At meetings of the Executive Committee, a majority of the number of
members designated by the Board to be the Executive Committee shall
constitute a quorum for the transaction of business. The act of a majority
of the members of the Executive Committee present at any meeting at which a
quorum is present shall be the act of the Executive Committee, except as
otherwise specifically provided by statute or by the articles of
incorporation or by these bylaws. If a quorum is not present at a meeting
of the Executive Committee, the members present thereat may adjourn the
meeting from time to time, without notice other than an announcement at the
meeting, until a quorum is present.
SECTION 5.1.2 FINANCE COMMITTEE. The Finance Committee shall, from
time to time, meet to review the Company's consolidated operating and financial
affairs and to report its findings and recommendations to the Board for
final action. The Finance Committee shall not be empowered to approve any
corporate action, of whatever kind or nature, and the recommendations of
the Finance Committee shall not be binding on the Board, except when,
pursuant to the provisions of Section 5.2 of these Bylaws, such power and
authority have been specifically delegated to such committee by the Board
by resolution. In addition to the foregoing, the specific duties of the
Finance Committee shall be determined by the Board by resolution.
<PAGE>
SECTION 5.1.3 AUDIT COMMITTEE. The Audit Committee shall, from time to
time meet to review and monitor the financial and cost accounting practices
and procedures of the Company, and to report its findings and
recommendations to the Board for final action. The Audit Committee shall
not be empowered to approve any corporate action, of whatever kind or
nature, and the recommendations of the Audit Committee shall not be binding
on the Board, except when, pursuant to the provisions of Section 5.2 of
these Bylaws, such power and authority have been specifically delegated to
such committee by the Board by resolution. In addition to the foregoing,
the specific duties of the Audit Committee shall be determined by the Board
by resolution.
SECTION 5.1.4 COMPENSATION COMMITTEE. The Compensation Committee
shall, from time to time, meet to review the various compensation plans,
policies and practices of the Company, and to report its findings and
recommendations to the Board for final action. The Compensation Committee
shall not be empowered to approve any corporate action, of whatever kind or
nature, and the recommendations of the Compensation Committee shall not be
binding on the Board, except when, pursuant to the provisions of Section
5.2 of these Bylaws, such power and authority have been specifically
delegated to such committee by the Board by resolution. In addition to the
foregoing, the specific duties of the Compensation Committee shall be
determined by the Board by resolution.
SECTION 5.2. AVAILABLE POWERS. Any committee established pursuant to
Section 5.1 of these Bylaws, including the Finance Committee, the Audit
Committee and the Compensation Committee, but only to the extent provided
in the resolution of the Board establishing such committee or otherwise
delegating specific power and authority to such committee and as limited by
law, the articles of incorporation and these Bylaws, shall have and may
exercise all the powers and authority of the Board in the management of the
business and affairs of the Company, and may authorize the seal of the
Company to be affixed to all papers which may require it.
SECTION 5.3. ALTERNATE MEMBERS. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of such committee.
SECTION 5.4. PROCEDURES. Time, place and notice, if any, of meetings of
a committee shall be determined by the members of such committee. At
meetings of a committee, a majority of the number of members designated by
the Board shall constitute a quorum for the transaction of business. The
act of a majority of the members present at any meeting at which a quorum
is present shall be the act of the committee, except as otherwise
specifically provided by law, the articles of incorporation or these
Bylaws. If a quorum is not present at a meeting of a committee, the
members present may adjourn the meeting from time to time, without notice
other than an announcement at the meeting, until a quorum is present.
<PAGE>
ARTICLE VI.
OFFICERS
SECTION 6.1. ELECTED OFFICERS. The Board shall elect a chairman, a
president and a secretary (collectively, the "Required Officers") having
the respective duties enumerated below, and the Board may elect such other
officers having the titles and duties set forth below which are not
reserved for the Required Officers or such other titles and duties as the
Board may by resolution from time to time establish:
SECTION 6.1.1 CHAIRMAN OF THE BOARD. The chairman of the Board
(elected from the Board) shall preside at meetings of the Board and shall act as
chairman of meetings of the shareholders. Unless otherwise specified by
the Board, he shall be the chief executive officer of the Company, shall
control its financial policies and shall have authority to vote for the
corporation stock in other corporations held by this Company or may
delegate such authority to any of the other corporate officers. In the
event of a vacancy, the duties of the chairman of the board shall devolve
upon and be performed by the vice chairman of the board.
SECTION 6.1.2 VICE CHAIRMAN OF THE BOARD. The vice chairman of the
Board (elected from the Board) shall advise and counsel the president and other
officers and shall exercise such powers and perform such duties as shall be
assigned to or required of him from time to time by the Board or these
Bylaws. In the absence of the chairman of the Board or in the event of his
inability or refusal to act or at his request, the vice chairman of the
Board shall perform the duties and exercise the powers of the chairman of
the Board.
SECTION 6.1.3 PRESIDENT. The president (elected from the Board) shall
direct the day to day operations of the Company and shall perform such
other duties as are from time to time prescribed by the board of directors
or as are incidental to his office. If determined by the Board, he shall
be the chief executive officer of the Company, shall control its financial
policies and shall have authority to vote for the corporation stock in
other corporations held by this Company or may delegate such authority to
any of the other corporate officers. In the absence of the chairman of the
board and the vice chairman of the Board or in the event of their inability
or refusal to act or at their request, the president shall perform the
duties and exercise the powers of the chairman of the board and the vice
chairman of the board.
SECTION 6.1.4 VICE PRESIDENTS. In the absence of the president or in
the event of his inability or refusal to act, the vice president (or in the
event there be more than one vice president, the vice presidents in the
order designated by the Board, or in the absence of any designation, then
in the order of their election or appointment) shall perform the duties of
the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president. The vice presidents
shall perform such other duties and have such other powers as the Board may
from time to time prescribe.
<PAGE>
SECTION 6.1.5 SECRETARY. The secretary shall attend all meetings of
the shareholders, the Board and (as required) committees of the Board and shall
record all the proceedings of such meetings in minute books to be kept for
that purpose. He shall give, or cause to be given, notice of all meetings
of the shareholders and special meetings of the Board and shall perform
such other duties as may be prescribed by the Board or the president. He
shall have custody of the corporate seal of the Company and he, or an
assistant secretary, shall have authority to affix the same to any
instrument requiring it, and when so affixed, it may be attested by his
signature or by the signature of such assistant secretary. The Board may
give general authority to any other officer to affix the seal of the
Company and to attest the affixing thereof by his signature.
SECTION 6.1.6 ASSISTANT SECRETARIES. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
Board (or if there be no such determination, then in the order of their
election or appointment) shall, in the absence of the secretary or in the
event of his inability or refusal to act, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have
such other powers as the Board may from time to time prescribe.
SECTION 6.1.7 TREASURER. Unless the Board by resolution otherwise
provides, the treasurer shall be the chief accounting and financial officer
of the Company. The Treasurer shall have the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Company and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board. He shall
disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the president
and the Board, at its regular meetings, or when the Board so requires, an
account of all his transactions as treasurer and of the financial condition
of the Company.
SECTION 6.1.8 ASSISTANT TREASURERS. The assistant treasurer, or if
there shall be more than one, the assistant treasurers in the order determined
by the Board (or if there be no such determination, then in the order of their
election or appointment) shall, in the absence of the treasurer or in the
event of his inability or refusal to act, perform the duties and exercise
the powers of the treasurer and shall perform such other duties and have
such other powers as the Board may from time to time prescribe.
SECTION 6.1.9 DIVISIONAL OFFICERS. Each division of the Company, if
any, may have a president, secretary, treasurer or controller and one or more
vice presidents, assistant secretaries, assistant treasurers and other
assistant officers. Any number of such offices may be held by the same
<PAGE>
person. Such divisional officers will be appointed by, report to and serve
at the pleasure of the Board and such other officers that the Board may
place in authority over them. The officers of each division shall have
such authority with respect to the business and affairs of that division as
may be granted from time to time by the Board, and in the regular course of
business of such division may sign contracts and other documents in the
name of the division where so authorized; provided that in no case and
under no circumstances shall an officer of one division have authority to
bind any other division of the Company except as necessary in the pursuit
of the normal and usual business of the division of which he is an officer.
Section 6.1.10 Unless otherwise specified by the Board at the time of
election or appointment, or in any employment contract approved by the
Board, each officer's term shall end at the first meeting of directors
after the next annual meeting of members. He shall serve until the end of
his term, or, if earlier, his death, resignation or removal.
SECTION 6.2. ELECTION. All elected officers shall serve until their
successors are duly elected and qualified or until their earlier death,
disqualification, retirement, resignation or removal from office.
SECTION 6.3. APPOINTED OFFICERS. The Board may also appoint or delegate
the power to appoint such other officers, assistant officers and agents,
and may also remove such officers and agents or delegate the power to
remove same, as it shall from time to time deem necessary, and the titles
and duties of such appointed officers may be as described in Section 6.1
for elected officers; provided that the officers and any officer possessing
authority over or responsibility for any functions of the Board shall be
elected officers.
SECTION 6.4. MULTIPLE OFFICEHOLDERS, SHAREHOLDER AND DIRECTOR OFFICERS.
Any number of offices may be held by the same person except that the
president and secretary shall not be the same person, unless the articles
of incorporation or these Bylaws otherwise provide. Officers need not be
shareholders or residents of the State of Texas. The Chairman of the Board,
the Vice-Chairman of the Board and the President must be directors.
SECTION 6.5. COMPENSATION, VACANCIES. The compensation of elected
officers shall be set by the Board. The Board shall also fill any vacancy
in an elected office. The compensation of appointed officers and the
filling of vacancies in appointed offices may be delegated by the Board to
the same extent as permitted by these Bylaws for the initial filling of
such offices.
SECTION 6.6. ADDITIONAL POWERS AND DUTIES. In addition to the foregoing
especially enumerated powers and duties, the several elected and appointed
officers of the Company shall perform such other duties and exercise such
further powers as may be provided by law, the articles of incorporation or
these Bylaws or as the Board may from time to time determine or as may be
assigned to them by any competent committee or superior officer.
<PAGE>
SECTION 6.7. REMOVAL. Any officer or agent or member of a committee
elected or appointed by the Board may be removed by the Board whenever in
its judgment the best interest of the Company will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Election or appointment of an officer or agent or
member of a committee shall not of itself create contract rights.
ARTICLE VII.
SHARE CERTIFICATES
SECTION 7.1. ENTITLEMENT TO CERTIFICATES. Every holder of the capital
stock of the Company, unless and to the extent the Board by resolution
provides that any or all classes or series of stock shall be
uncertificated, shall be entitled to have a certificate, in such form as is
approved by the Board and conforms with applicable law, certifying the
number of shares owned by him. Each certificate representing shares shall
state upon the face thereof:
(1) that the corporation is organized under the laws of the State of
Texas;
(2) the name of the person to whom issued;
(3) the number and class of shares and the designation of the series,
if any, which such certificate represents; and
(4) the par value of each share represented by such certificate, or a
statement that the shares are without par value.
SECTION 7.2. MULTIPLE CLASSES OF STOCK; PREEMPTIVE RIGHTS. In the event
the Company shall be authorized to issue shares of more than one class,
each certificate representing shares issued by the Company (1) shall
conspicuously set forth on the face or back of the certificate a full
statement of (a) all of the designations, preferences, limitations and
relative rights of the shares of each class authorized to be issued and,
(b) if the Company is authorized to issue shares of any preferred or
special class in series, the variations in the relative rights and
preferences of the shares of each such series to the extent they have been
fixed and determined and the authority of the Board to fix and determine
the relative rights and preferences of subsequent series; or (2) shall
conspicuously state on the face or back of the certificate that (a) such a
statement is set forth in the articles of incorporation on file in the
office of the Secretary of State of the State of Texas and (b) the Company
will furnish a copy of such statement to the record holder of the
certificate without charge on written request to the Company at its
principal place of business or registered office. In the event the Company
has by its articles of incorporation limited or denied the preemptive right
of shareholders to acquire unissued or treasury shares of the Company, each
certificate representing shares issued by the Company (1) shall
conspicuously set forth on the face or back of the certificate a full
statement of the limitation or denial of preemptive rights contained in the
articles of incorporation, or (2) shall conspicuously state on the face or
back of the certificate that (a) such a statement is set forth in the
articles of incorporation on file in the office of the Secretary of State
of the State of Texas and (b) the Company will furnish a copy of such
<PAGE>
statement to the record holder of the certificate without charge on request
to the Company at its principal place of business or registered office.
SECTION 7.3. SIGNATURES. Each certificate representing capital stock of
the Company shall be signed by or in the name of the Company by (1) the
chairman of the board, the president or a vice president; and (2) the
treasurer, an assistant treasurer, the secretary or an assistant secretary
of the Company. The signatures of the officers of the Company may be
facsimiles. In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to hold such
office before such certificate is issued, it may be issued by the Company
with the same effect as if he held such office on the date of issue.
SECTION 7.4. ISSUANCE AND PAYMENT. Subject to any provision of the
Constitution of the State of Texas to the contrary, the Board may authorize
shares to be issued for consideration consisting of any tangible or
intangible benefit to the Company, including, cash, promissory notes,
services performed, contracts for services to be performed, or other
securities of the Company. Shares may not be issued until the full amount
of the consideration, fixed as provided by law, has been paid. When such
consideration shall have been paid to the Company or to a corporation of
which all the outstanding shares of each class are owned by the Company,
the shares shall be deemed to have been issued and the subscriber or
shareholder entitled to receive such issue shall be a shareholder with
respect to such shares, and the shares shall be considered fully paid and
non-assessable. In the absence of fraud in the transaction, the judgment
of the Board or the shareholders, as the case may be, as to the value of
the consideration received for shares shall be conclusive.
SECTION 7.5. LOST CERTIFICATES. The Board may direct a new certificate
or certificates to be issued in place of any certificate or certificates
theretofore issued by the Company alleged to have been lost, stolen or
destroyed upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or to give the Company a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Company with respect to the certificate alleged to have been lost, stolen
or destroyed.
SECTION 7.6. TRANSFER OF STOCK. Upon surrender to the Company or its
transfer agent, if any, of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer and of the payment of all taxes applicable to the transfer of said
shares, the Company shall be obligated to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the
transaction upon its books; provided, however, that the Company shall not
be so obligated unless such transfer was made in compliance with applicable
state and federal securities laws.
<PAGE>
SECTION 7.7. REGISTERED SHAREHOLDERS. The Company shall be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, vote and be held liable for calls and
assessments and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any person
other than such registered owner, whether or not it shall have express or
other notice thereof, except as otherwise provided by law.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. DEFINITIONS. For purposes of this Article VIII:
(1) "Corporation" includes any domestic or foreign predecessor entity
of the Company in a merger, consolidation, or other transaction
in which the liabilities of the predecessor are transferred to
the Company by operation of law and in any other transaction in
which the Company assumes the liabilities of the predecessor but
does not specifically exclude liabilities that are the subject
matter of this article;
(2) "Director" means any person who is or was a director of the
Company and any person who, while a director of the Company, is
or was serving at the request of the Company as a director,
officer, partner, venturer, proprietor, trustee, employee, agent,
or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise;
(3) "Expenses" include court costs and attorneys' fees;
(4) "Official capacity" means
(i) when used with respect to a Director, the office of Director
in the Company, but does not include service for any other
foreign or domestic corporation or any partnership, joint
venture, sole proprietorship, trust, employee benefit plan,
or other enterprise;
(ii) when used with respect to a person other than a Director,
the elective or appointive office in the Company held by the
officer or the employment or agency relationship undertaken
by the employee or agent on behalf of the Company, but does
not include service for any other foreign or domestic
corporation or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other
enterprise; and
<PAGE>
(5) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could
lead to such an action, suit, or proceeding.
SECTION 8.2. MANDATORY INDEMNIFICATION. The Company shall indemnify a
person who was, is, or is threatened to be made a named defendant or
respondent in a proceeding because the person is or was a Director only if
it is determined in accordance with Section 8.6 of this Article VIII that
the person:
(1) conducted himself in good faith;
(2) reasonably believed:
(i) in the case of conduct in his official capacity as a
Director of the Company, that his conduct was in the
Company's best interests; and
(ii) in all other cases, that his conduct was at least not
opposed to the Company's best interests; and
(3) in the case of any criminal proceeding, had no reasonable cause
to believe his conduct was unlawful.
SECTION 8.3. PROHIBITED INDEMNIFICATION. Except to the extent permitted
by Section 8.5 of this Article VIII, a Director may not be indemnified
under Section 8.2 of this Article VIII in respect of a proceeding:
(1) in which the person is found liable on the basis that personal
benefit was improperly received by him, whether or not the
benefit resulted from an action taken in the person's official
capacity; or
(2) in which the person is found liable to the Company.
SECTION 8.4. TERMINATION OF PROCEEDINGS. The termination of a proceeding
by judgment, order, settlement, or conviction, or on a plea of nolo
contendere or its equivalent is not of itself determinative that the person
did not meet the requirements set forth in Section 8.2 of this Article
VIII. A person shall be deemed to have been found liable in respect of any
claim, issue or matter only after the person shall have been so adjudged by
a court of competent jurisdiction after exhaustion of all appeals
therefrom.
SECTION 8.5. JUDGMENTS, EXPENSES, ETC. A person may be indemnified under
Section 8.2 of this Article VIII against judgments, penalties (including
excise and similar taxes), fines, settlements, and reasonable expenses
actually incurred by the person in connection with the proceeding; but if
the person is found liable to the Company or is found liable on the basis
that personal benefit was improperly received by the person, the
<PAGE>
indemnification (1) is limited to reasonable expenses actually incurred by
the person in connection with the proceeding and (2) shall not be made in
respect of any proceeding in which the person shall have been found liable
for willful or intentional misconduct in the performance of his duty to the
Company.
SECTION 8.6. DETERMINATION OF INDEMNIFICATION. A determination of
indemnification under Section 8.2 of this Article VIII must be made:
(1) by a majority vote of a quorum consisting of directors who at the
time of the vote are not named defendants or respondents in the
proceeding;
(2) if such a quorum cannot be obtained, by a majority vote of a
committee of the Board, designated to act in the matter by a
majority vote of all directors, consisting solely of two or more
directors who at the time of the vote are not named defendants or
respondents in the proceeding;
(3) by special legal counsel selected by the Board or a committee
thereof by vote as set forth in subsection (1) or (2) of this
Section 8.6, or, if such a quorum cannot be obtained and such a
committee cannot be established, by a majority vote of all
Directors; or
(4) by the shareholders of the Company in a vote that excludes the
shares held by Directors who are named defendants or respondents
in the proceeding.
SECTION 8.7. DETERMINATION OF REASONABLENESS OF EXPENSES. Determination
as to reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if the
determination that indemnification is permissible is made by special legal
counsel, determination as to reasonableness of expenses must be made in the
manner specified by subsection (3) of Section 8.6 of this Article VIII for
the selection of special legal counsel.
SECTION 8.8. INDEMNIFICATION AGAINST REASONABLE EXPENSES. The Company
shall indemnify a Director against reasonable expenses incurred by him in
connection with a proceeding in which he is a named defendant or respondent
because he is or was a Director if he has been wholly successful, on the
merits or otherwise, in the defense of the proceeding.
SECTION 8.9. PAYMENTS IN ADVANCE OF DISPOSITION. Reasonable expenses
incurred by a Director who was, is, or is threatened to be made a named
defendant or respondent in a proceeding shall be paid or reimbursed by the
Company, in advance of the final disposition of the proceeding and without
any of the determinations specified in Sections 8.6 and 8.7 of this Article
VIII, after the Company receives a written affirmation by the Director of
his good faith belief that he has met the standard of conduct necessary for
indemnification under this Article VIII and a written undertaking by or on
behalf of the Director to repay the amount paid or reimbursed if it is
ultimately determined that he has not met those requirements.
<PAGE>
SECTION 8.10. WRITTEN UNDERTAKING. The written undertaking required by
Section 8.9 of this Article VIII must be an unlimited general obligation of
the Director but need not be secured. It may be accepted without reference
to financial ability to make repayment.
SECTION 8.11. CONSISTENCY WITH ARTICLES OF INCORPORATION. Any provision
for the Company to indemnify or to advance expenses to a Director who was,
is, or is threatened to be made a named defendant or respondent in a
proceeding, whether contained in the articles of incorporation, these
Bylaws, a resolution of shareholders or Directors, an agreement, or
otherwise, except in accordance with Section 8.16 of this Article VIII, is
valid only to the extent it is consistent with this Article VIII as limited
by the articles of incorporation, if such a limitation exists.
SECTION 8.12. OTHER EXPENSES. Notwithstanding any other provision of this
Article VIII, the Company may pay or reimburse expenses incurred by a
Director in connection with his appearance as a witness or other
participation in a proceeding at a time when he is not a named defendant or
respondent in the proceeding.
SECTION 8.13. OFFICERS, EMPLOYEES AND AGENTS. An officer, employee or
agent of the Company shall be indemnified as, and to the same extent,
provided by Section 8.8 of this Article VIII for a Director and is entitled
to seek indemnification under such section to the same extent as a
Director. The Company shall advance expenses to an officer and may advance
expenses to an employee or agent of the Company to the same extent that it
shall advance expenses to Directors under this Article VIII.
SECTION 8.14. OTHER CAPACITIES. A corporation may indemnify and advance
expenses to persons who are not or were not officers, employees, or agents
of the Company, but who are or were serving at the request of the Company
as a director, officer, partner, venturer, proprietor, trustee, employee,
agent, or similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise to the same extent that it shall indemnify and
advance expenses to Directors under this Article VIII.
SECTION 8.15. FURTHER INDEMNIFICATION. The Company may indemnify and
advance expenses to an officer, employee, agent, or person identified in
Section 8.14 of this Article VIII and who is not a Director to such further
extent, consistent with law, as may be provided by the articles of
incorporation, these Bylaws, general or specific action of the Board, or
contract or as permitted or required by common law.
SECTION 8.16. INSURANCE. The Company may purchase and maintain insurance
or another arrangement on behalf of any person who is or was a Director,
officer, employee, or agent of the Company or who is or was serving at the
request of the Company as a director, officer, partner, venturer,
<PAGE>
proprietor, trustee, employee, agent, or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, against
any liability asserted against him and incurred by him in such a capacity
or arising out of his status as such a person, whether or not the Company
would have the power to indemnify him against that liability under this
Article VIII. If the insurance or other arrangement is with a person or
entity that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a
liability with respect to which the Company would not have the power to
indemnify the person only if including coverage for the additional
liability has been approved by the shareholders of the Company. Without
limiting the power of the Company to procure or maintain any kind of
insurance or other arrangement, the Company may, for the benefit of persons
indemnified by the Company, (1) create a trust fund; (2) establish any form
of self-insurance; (3) secure its indemnity obligation by grant of a
security interest or other lien on the assets of the Company; or (4)
establish a letter of credit, guaranty, or surety arrangement. The
insurance or other arrangement may be procured, maintained, or established
within the Company or with any insurer or other person deemed appropriate
by the Board regardless of whether all or part of the stock or other
securities of the insurer or other person are owned in whole or part by the
Company. In the absence of fraud, the judgment of the Board as to the
terms and conditions of the insurance or other arrangement and the identity
of the insurer or other person participating in an arrangement shall be
conclusive and the insurance or arrangement shall not be voidable and shall
not subject the Directors approving the insurance or arrangement to
liability, on any ground, regardless of whether Directors participating in
the approval are beneficiaries of the insurance or arrangement.
SECTION 8.17. REPORT TO SHAREHOLDERS. Any indemnification of or advance
of expenses to a Director in accordance with this Article VIII shall be
reported in writing to the shareholders with or before the notice or waiver
of notice of the next shareholders' meeting or with or before the next
submission to shareholders of a consent to action without a meeting
pursuant to Section A, Article 9.10, of the Texas Business Corporation Act
and, in any case, within the 12-month period immediately following the date
of the indemnification or advance.
SECTION 8.18. EMPLOYEE BENEFIT PLANS. For purposes of this Article VIII,
the Company is deemed to have requested a Director to serve in capacity in
connection with an employee benefit plan whenever the performance by him of
his duties to the Company also imposes duties on or otherwise involves
services by him to the plan or participants or beneficiaries of the plan.
Excise taxes assessed on a Director with respect to an employee benefit
plan pursuant to applicable law are deemed fines. Action taken or omitted
by him with respect to an employee benefit plan in the performance of his
duties for a purpose reasonably believed by him to be in the interest of
the participants and beneficiaries of the plan is deemed to be for a
purpose which is not opposed to the best interests of the Company.
SECTION 8.19. CHANGE IN GOVERNING LAW. In the event of any amendment or
addition to Article 2.02-1 of the Texas Business Corporation Act or the
addition of any other section to such law which shall limit indemnification
rights thereunder, the Company shall, to the extent permitted by the Texas
<PAGE>
Business Corporation Act, indemnify to the fullest extent authorized or
permitted hereunder, any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the Company), by reason of the
fact that he is or was a Director, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit
plan or other enterprise, against all judgments, penalties (including
excise and similar taxes), fines, settlements and reasonable expenses
(including attorneys' fees and court costs) actually and reasonably
incurred by him in connection with such action, suit or proceeding.
ARTICLE IX.
INTERESTED DIRECTORS, OFFICERS AND SHAREHOLDERS
SECTION 9.1. VALIDITY; DISCLOSURE; APPROVAL. No contract or transaction
between the Company and one or more of its directors or officers, or
between the Company and any other corporation, partnership, association, or
other organization in which one or more of its directors or officers are
directors or officers or have a financial interest, shall be void or
voidable solely for this reason, solely because the director or officer is
present at or participates in the meeting of the Board or committee thereof
which authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose, if:
(1) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
Board or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or
(2) the material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
shareholders; or
(3) the contract or transaction is fair as to the Company as of the
time it is authorized, approved, or ratified by the Board, a
committee thereof, or the shareholders.
SECTION 9.2. QUORUM. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board or by a
committee which authorizes the contract or transaction.
SECTION 9.3. NONEXCLUSIVE. This Article IX shall not be construed to
invalidate any contract or transaction which would be valid in the absence
of this Article IX.
<PAGE>
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. PLACE OF MEETINGS. All shareholders, directors and
committee meetings shall be held at such place or places, within or without
the State of Texas, as shall be designated from time to time by the Board
or such committee and stated in the notices thereof. If no such place is
so designated, said meetings shall be held at the principal business office
of the Company.
SECTION 10.2. FIXING RECORD DATES.
(a) In order that the Company may determine the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, to receive payment of any dividend or other
distribution or allotment of any rights, to exercise any rights in respect
of any change, conversion or exchange of stock or to effect any other
lawful action, or to make a determination of shareholders for any other
proper purpose (other than determining shareholders entitled to consent to
action by shareholders proposed to be taken without a meeting of
shareholders), the Board may fix, in advance, a record date for any such
determination of shareholders, which shall not be more than sixty (60) nor
less than ten (10) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken. In the
absence of any action by the Board, the date on which a notice of meeting
is given, or the date the Board adopts the resolution declaring a dividend
or other distribution or allotment or approving any change, conversion or
exchange, as the case may be, shall be the record date. A record date
validly fixed for any meeting of shareholders and the determination of
shareholders entitled to vote at such meeting shall be valid for any
adjournment of said meeting except where such determination has been made
through the closing of stock transfer books and the stated period of
closing has expired.
(b) In order that the Company may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board,
and which date shall not be more than ten (10) days after the date upon
which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is otherwise required, shall be
the first date on which a signed written consent setting forth the action
taken or proposed to be taken is delivered to the Company by delivery to
its registered office in the State of Texas, its principal place of
business, or an officer or agent of the Company having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery
<PAGE>
made to the Company's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board and prior action by the Board is required, the record
date for determining stockholders entitled to consent to corporate action
in writing without a meeting shall be at the close of business on the day
on which the Board adopts the resolution taking such prior action.
SECTION 10.3. WAIVER OF NOTICE. Whenever any notice is required to be
given under law, the articles of incorporation or these Bylaws, a written
waiver of such notice, signed before or after the date of such meeting by
the person or persons entitled to said notice, shall be deemed equivalent
to such required notice. All such waivers shall be filed with the
corporate records. Attendance at a meeting shall constitute a waiver of
notice of such meeting, except where a person attends for the express
purpose of objecting to the transaction of any business on the ground that
the meeting is not lawfully called or convened.
SECTION 10.4. ATTENDANCE VIA COMMUNICATIONS EQUIPMENT. Unless otherwise
restricted by law, the articles of incorporation or these Bylaws, members
of the Board, members of any committee thereof or the shareholders may hold
a meeting by means of conference telephone or other communications
equipment by means of which all persons participating in the meeting can
effectively communicate with each other. Such participation in a meeting
shall constitute presence in person at the meeting, except where a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
SECTION 10.5. RIGHT OF FIRST REFUSAL OF THE COMPANY.
(a) For the period from the date (the "Effective Date") when the
Amended and Restated Articles of the Company as approved by the Eligible
Policyholders (as defined herein) are filed with the Commissioner of
Insurance of the State of Texas to the earlier of (i) the third anniversary
of the Effective Date or (ii) the effective date of an initial public
offering of common stock by the Company that is registered under the
Securities Act of 1933, as amended, through a national or a regional
underwriter or broker/dealer resulting in proceeds to the Company of not
less than $25 million, each holder (each a "Shareholder") of shares of
common stock (the "Shares") issued to the persons who were holders of
insurance policies (excluding persons insured under group policies) (i)
issued by The Millers Mutual Fire Insurance Company, a Texas property and
casualty insurance company, and (ii) in force on January 28, 1998
(collectively, "Eligible Policyholders" and individually, an "Eligible
Policyholder") shall not sell, exchange, convey, pledge, hypothecate,
encumber, assign, transfer or otherwise dispose of (collectively, a
"Transfer"), either directly or indirectly, all or any part of the Shares,
or any right or interest therein, except as provided in Section 10.5(b)
below.
(b) If any Shareholder receives a bona fide offer from any
person (an "Offeror") that such Shareholder desires to accept (an "Offer")
to Transfer any or all of the Shares then owned by such Shareholder (the
"Transfer Shares"), such Shareholder promptly shall provide prior to
<PAGE>
accepting the Offer written notice to the Company by registered mail, which
shall be effective on the date received by the Company at its principal
office, of the terms of such Offer, which notice shall identify the
Offeror, the price offered, and all other material terms and conditions of
such Offer. Such notice shall contain an offer to sell the Transfer Shares
to the Company at the price contained in the Offer and upon substantially
the same terms as contained in the Offer, provided, that, if consideration
other than cash is to be received by such Shareholder for the Transfer
Shares, the Company may purchase such Transfer Shares for an amount equal
to the fair market value of the non-cash consideration offered by the
Offeror. The fair market value of any non-cash consideration shall be
deemed to be (i) the market closing price on the date of the Offer with
respect to any publicly traded securities offered by an Offeror or (ii) an
amount established either by mutual agreement of the Shareholder and the
Company or by an independent third party appraisal (obtained at the
Company's expense) with respect to any other non-cash consideration. The
Company shall have the irrevocable right and option to accept such offer by
providing such Shareholder with a written notice of acceptance within 35
days after the date the notice was received by the Company. Such notice of
acceptance shall include a statement indicating the current book value per
share of the Company, calculated by dividing the book value of the Company
as of the most recent fiscal quarter ended for which the Company has filed
quarterly (or annual if applicable) financial statements with the
Securities and Exchange Commission by the number of shares of common stock
of the Company outstanding as of such quarter ended. Upon receipt of such
notice of acceptance from the Company, the Shareholder shall notify the
Company within seven days whether the Shareholder elects to proceed to sell
the Transfer Shares to the Company. If the Shareholder does not notify the
Company of such Shareholder's election to proceed to sell the Transfer
Shares to the Company, the Shareholder shall be deemed to have withdrawn
the Shareholder's proposal to accept the Offer from the Offeror and shall
not proceed to transfer the Transfer Shares to the Offeror. If the Company
does not elect to purchase the Transfer Shares during such 35-day period,
such failure shall be conclusively presumed to be a refusal of such offer,
and such Shareholder shall have 60 days from the end of such 35-day period
(the "Transfer Period") in which to consummate the Transfer pursuant to the
terms of the Offer, subject to Section 10.5(d). Promptly after the
Transfer is consummated, such Shareholder shall notify the Company of the
consummation of the Transfer and shall furnish such evidence of the
consummation of the Transfer and the terms thereof as the Company may
reasonably request. If, either (i) the Company does not elect to purchase
the Transfer Shares and such Shareholder has not consummated the Transfer
pursuant to the terms of the Offer by the termination of the Transfer
Period or (ii) such Shareholder does not elect to accept the Company's
offer to purchase the Transfer Shares, then any such Transfer if
consummated shall be null and void, the purported successor shall not be
deemed to be a shareholder of the Company and shall not be registered as
the owner of any Shares on the stock transfer books of the Company, and all
of the restrictions contained in this Section 10.5 shall again be in effect
with respect to all of such Shareholder's Shares.
(c) The provisions of Sections 10.5(a) and (b) shall not apply
to a Transfer of Shares by a Shareholder without consideration to any of
the following parties, whether such Transfer be inter vivos, testamentary,
<PAGE>
or by intestate succession: (i) a spouse of such Shareholder or (ii)
descendants of such Shareholder, and upon such Transfer, the Shares so
transferred shall continue to be restricted as set forth in this Section
10.5; provided, however, the requirements of Section 10.5(d) must be met
for such Transfer to be effective.
(d) No Transfer pursuant to this Section 10.5 shall occur unless
prior to the consummation of such Transfer the transferee executes a
written acknowledgment, in form satisfactory to the Company, of such
transferee's understanding that the Shares to be received by such
transferee are subject to the restrictions contained in this Section 10.5.
(e) Stock certificates representing the Shares shall contain an
appropriate restrictive legend, which shall be conspicuously placed on the
face of each such certificate, notifying the holder(s) thereof of the
Company's right of first refusal pursuant to this Section 10.5.
SECTION 10.6. DIVIDENDS. Dividends on the capital stock of the Company,
paid in cash, property, or securities of the Company, or any combination
thereof, and as may be limited by applicable law and applicable provisions
of the articles of incorporation (if any), may be declared by the Board at
any regular or special meeting.
SECTION 10.7. RESERVES. Before payment of any dividend, there may be set
aside out of any funds of the Company available for dividends such sum or
sums as the Board from time to time, in its absolute discretion, thinks
proper as a reserve or reserves to meet contingencies, for equalizing
dividends, for repairing or maintaining any property of the Company, or for
such other purpose as the Board shall determine to be in the best interest
of the Company; and the Board may modify or abolish any such reserve in the
manner in which it was created.
SECTION 10.8. REPORTS TO SHAREHOLDERS. The Board shall present at each
annual meeting of shareholders, and at any special meeting of shareholders
when called for by vote of the shareholders, a statement of the business
and condition of the Company.
SECTION 10.9. CONTRACTS AND NEGOTIABLE INSTRUMENTS. Except as otherwise
provided by law or these Bylaws, any contract or other instrument relative
to the business of the Company may be executed and delivered in the name of
the Company and on its behalf by the chairman of the board, the president
or any vice president; and the Board may authorize any other officer or
agent of the Company to enter into any contract or execute and deliver any
contract in the name and on behalf of the Company, and such authority may
be general or confined to specific instances as the Board may by resolution
determine. All bills, notes, checks or other instruments for the payment
of money shall be signed or countersigned by such officer, officers, agent
or agents and in such manner as are permitted by these Bylaws and/or as,
from time to time, may be prescribed by resolution (whether general or
special) of the Board. Unless authorized so to do by these Bylaws or by
the Board, no officer, agent or employee shall have any power or authority
to bind the Company by any contract or engagement, or to pledge its credit,
or to render it liable pecuniarily for any purpose or to any amount.
<PAGE>
SECTION 10.10. FISCAL YEAR. The fiscal year of the Company shall be fixed
by resolution of the Board.
SECTION 10.11. SEAL. The seal of the Company shall be in such form as
shall from time to time be adopted by the Board. The seal may be used by
causing it or a facsimile thereof to be impressed, affixed or otherwise
reproduced.
SECTION 10.12. BOOKS AND RECORDS. The Company shall keep correct and
complete books and records of account and shall keep minutes of the
proceedings of its shareholders, Board and committees and shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving the names
and addresses of all shareholders and the number and class of the shares
held by each.
SECTION 10.13. RESIGNATION. Any director, committee member, officer or
agent may resign by giving written notice to the chairman of the board, the
president or the secretary. The resignation shall take effect at the time
specified therein, or immediately if no time is specified. Unless
otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 10.14. SURETY BONDS. Such officers and agents of the Company (if
any) as the chairman of the board, the president or the Board may direct,
from time to time, shall be bonded for the faithful performance of their
duties and for the restoration to the Company, in case of their death,
resignation, retirement, disqualification or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in their
possession or under their control belonging to the Company, in such amounts
and by such surety companies as the chairman of the board, the president or
the Board may determine. The premiums on such bonds shall be paid by the
Company and the bonds so furnished shall be in the custody of the
Secretary.
SECTION 10.15. PROXIES IN RESPECT OF SECURITIES OF OTHER CORPORATIONS. The
chairman of the board, the president, any vice president or the secretary
may from time to time appoint an attorney or attorneys or an agent or
agents for the Company to exercise, in the name and on behalf of the
Company, the powers and rights which the Company may have as the holder of
stock or other securities in any other corporation to vote or consent in
respect of such stock or other securities, and the chairman of the board,
the president, any vice president or the secretary may instruct the person
or persons so appointed as to the manner of exercising such powers and
rights; and the chairman of the board, the president, any vice president or
the secretary may execute or cause to be executed, in the name and on
behalf of the Company and under its corporate seal or otherwise, all such
written proxies or other instruments as he may deem necessary or proper in
order that the Company may exercise such powers and rights.
<PAGE>
SECTION 10.16. AMENDMENTS. Unless otherwise provided by the Articles of
Incorporation, these Bylaws may be altered, amended, repealed or replaced
at any annual or regular meeting of the Board at which a quorum is present,
if notice of such alteration, amendment, repeal or replacement is contained
in the notice of such special meeting, by the affirmative vote of the
directors present at the meeting.
SECTION 10.17. TIME PERIODS. All references in these Bylaws to numbers of
days shall refer to calendar days.
