BYLAWS
OF
PRINCIPAL INTERNATIONAL EMERGING MARKETS FUND, INC.
ARTICLE 1
Name, Fiscal Year
1.01 The name of this corporation shall be Principal International
Emerging Markets Fund, Inc., Inc. Except as otherwise from time to time provided
by the board of directors, the fiscal year of the corporation shall begin
November 1 and end October 31.
ARTICLE 2
Stockholders' Meetings
2.01 Place of Meetings. All meetings of the stockholders shall be held
at such place within or without the State of Maryland, as is stated in the
notice of meeting.
2.02 Annual Meetings. The Board of Directors of the Fund shall
determine whether or not an annual meeting of stockholders shall be held. In the
event that an annual meeting of stockholders is held, such meeting shall be held
on the first Tuesday after the first Monday of February in each year or on such
other day during the 31-day period following the first Tuesday after the first
Monday of February as the directors may determine.
2.03 Special Meetings. Special meetings of the stockholders shall be
held whenever called by the chairman of the board, the president or the board of
directors, or when requested in writing by 10% of the Fund's outstanding shares.
2.04 Notice of Stockholders' Meetings. Notice of each stockholders'
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called shall be given by mailing such notice
to each stockholder of record at his address as it appears on the records of the
corporation not less than 10 nor more than 90 days prior to the date of the
meeting. Any meeting at which all stockholders entitled to vote are present
either in person or by proxy or of which those not present have waived notice in
writing shall be a legal meeting for the transaction of business notwithstanding
that notice has not been given as herein provided.
2.05 Quorum. Except as otherwise expressly required by law, these
bylaws or the Articles of Incorporation, as from time to time amended, at any
meeting of the stockholders the presence in person or by proxy of the holders of
one-third of the shares of capital stock of the Corporation issued and
outstanding and entitled to vote, shall constitute a quorum, but a lesser
interest may adjourn any meeting from time to time and the meeting may be held
as adjourned without further notice.
2.06 Proxies and Voting Stockholders of record may vote at any meeting
either in person or by written proxy signed by the stockholder or by the
stockholder's duly authorized attorney-in-fact dated not more than eleven months
before the date of exercise, which shall be filed with the Secretary of the
meeting before being voted. Each stockholder shall be entitled to one vote for
each share of stock held, and to a fraction of a vote equal to any fractional
share held.
2.07 Stock Ledger. The Corporation shall maintain at the office of the
stock transfer agent of the Corporation, or at the office of any successor
thereto as stock transfer agent of the Corporation, an original stock ledger
containing the names and addresses of all stockholders and the number of shares
of each class held by each stockholder. Such stock ledger may be in written form
or any other form capable of being converted into written form within a
reasonable time for visual inspection.
ARTICLE 3
Board of Directors
3.01 Number, Service. The Corporation shall have a Board of Directors
consisting of not less than three and no more than fifteen members. The number
of Directors to constitute the whole board within the limits above-stated shall
be fixed by the Board of Directors. The Directors may be chosen (i) by
stockholders at any annual meeting of stockholders held for the purpose of
electing directors or at any meeting held in lieu thereof, or at any special
meeting called for such purpose, or (ii) by the Directors at any regular or
special meeting of the Board to fill a vacancy on the Board as provided in these
bylaws and Maryland General Corporation Law. Each director should serve until
the next annual meeting of shareholders and until a successor is duly qualified
and elected, unless sooner displaced.
3.02 Powers. The board of directors shall be responsible for the entire
management of the business of the Corporation. In the management and control of
the property, business and affairs of the Corporation the board of directors is
hereby vested with all the powers possessed by the corporation itself so far as
this designation of authority is not inconsistent with the laws of the State of
Maryland, but subject to the limitations and qualifications contained in the
Articles of Incorporation and in these bylaws.
3.03 Executive Committee and Other Committees. The board of directors
may elect from its members an executive committee of not less than three which
may exercise certain powers of the board of directors when the board is not in
session pursuant to Maryland law. The executive committee may make rules for the
holding and conduct of its meetings and keeping the records thereof, and shall
report its action to the board of directors.
The board of directors may elect from its members such other committees
from time to time as it may desire. The number composing such committees and the
powers conferred upon them shall be determined by the board of directors at its
own discretion.
3.04 Meetings. Regular meetings of the board of directors may be held
in such places within or without the State of Maryland, and at such times as the
board may from time to time determine, and if so determined, notices thereof
need not be given. Special meetings of the board of directors may be held at any
time or place whenever called by the president or a majority of the directors,
notice thereof being given by the secretary or the president, or the directors
calling the meeting, to each director. Special meetings of the board of
directors may also be held without formal notice provided all directors are
present or those not present have waived notice thereof.
3.05 Quorum. A majority of the members of the board of directors from
time to time in office but in no event not less than one-third of the number
constituting the whole board shall constitute a quorum for the transaction of
business provided, however, that where the Investment Company Act of 1940
requires a different quorum to transact business of a specific nature, the
number of directors so required shall constitute a quorum for the transaction of
such business.
A lesser number may adjourn a meeting from time to time and the meeting
may be held without further notice. When a quorum is present at any meeting a
majority of the members present thereat shall decide any question brought before
such meeting except as otherwise expressly required by law, the Articles of
Incorporation or these bylaws.
3.06 Action by Directors Other than at a Meeting. Any action required
or permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting, if a written consent to such
action is signed by all members of the Board of Directors or such committee, as
the case may be, and such written consent is filed with the minutes of
proceedings of the Board of Directors or committee.
3.07 Holding of Meetings by Conference Telephone Call. At any regular
or special meeting, members of the Board of Directors or any committee thereof
may participate by conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this Section shall constitute presence in
person at such meeting.
ARTICLE 4
Officers
4.01 Selection. The officers of the corporation shall be a president, one or
more executive vice presidents, senior vice presidents or vice presidents, a
secretary, a treasurer and a counsel. The board of directors may, if it so
determines, also elect a chairman of the board. All officers shall be elected by
the board of directors and shall serve at the pleasure of the board. The same
person may hold more than one office except the offices of president and vice
president.
4.02 Eligibility. The chairman of the board, if any, and the president
shall be directors of the corporation. Other officers need not be directors.
4.03 Additional Officers and Agents. The board of directors may appoint one or
more assistant vice presidents, assistant treasurers, assistant counsels or
assistant secretaries and such other officers or agents as it may deem
advisable, and may prescribe the duties thereof.
4.04 Chairman of the Board of Directors. The chairman of the board, if any,
shall preside at all meetings of the board of directors at which the chairman is
present. The chairman shall have such other authority and duties as the board of
directors shall from time to time determine.
4.05 The President. The president shall be the chief executive officer of the
corporation and shall be responsible for the general and active management of
the business, affairs and property of the corporation, and shall see that all
orders and resolutions of the board of directors are carried into effect. The
president shall preside at meetings of stockholders, and the board of directors
unless a chairman of the board has been elected and is present.
4.06 The Vice Presidents. The vice presidents shall respectively have such
powers and perform such duties as may be assigned to them by the board of
directors or the president. In the absence or disability of the president, the
vice presidents, in the order determined by the board of directors, shall
perform the duties and exercise the powers of the president.
4.07 The Secretary. The secretary shall keep accurate minutes of all meetings of
the stockholders and directors, and shall perform all duties commonly incident
to that office and as provided by law and shall perform such other duties and
have such other powers as the board of directors shall from time to time
designate. In the absence of the secretary an assistant secretary or secretary
pro tempore shall perform the duties of the office and have such other powers as
the board of directors may from time to time designate.
4.08 The Treasurer. The treasurer shall, subject to the order of the board of
directors and in accordance with any arrangements for performance of services as
custodian, transfer agent or disbursing agent approved by the board, have the
care and custody of the money, funds, securities, valuable papers and documents
of the corporation, and shall have and exercise under the supervision of the
board of directors all powers and duties commonly incident to the office and as
provided by law. The treasurer shall keep or cause to be kept accurate books of
account of the corporation's transactions which shall be subject at all times to
the inspection and control of the board of directors. The treasurer shall
deposit all funds of the corporation in such bank or banks, trust company or
trust companies or such firm or firms doing a banking business as the board of
directors shall designate. In the absence of the treasurer an assistant
treasurer shall perform the duties of the office.
4.09 The Counsel. The counsel shall serve as the chief legal officer of the
corporation and shall perform duties commonly incident to that office and shall
perform such other duties and have such other powers as the board of directors
may from time to time designate. In the absence of the counsel an assistant
counsel shall perform the duties of the office.
ARTICLE 5
Vacancies
5.01 Removals. The stockholders may at any meeting called for the
purpose, by vote of the holders of a majority of the capital stock issued and
outstanding and entitled to vote, remove from office any director and, unless
the number of directors constituting the whole board is accordingly decreased,
elect a successor. To the extent consistent with the Investment Company Act of
1940, the board of directors may by vote of not less than a majority of the
directors then in office remove from office any director, officer or agent
elected or appointed by them and may for misconduct remove any thereof elected
by the stockholders.
5.02 Vacancies. If the office of any director becomes or is vacant by
reason of death, resignation, removal, disqualification, an increase in the
authorized number of directors or otherwise, the remaining directors may by vote
of a majority of said directors choose a successor or successors who shall hold
office for the unexpired term; provided that vacancies on the board of directors
may be so filled only if, after the filling of the same, at least two-thirds of
the directors then holding office would be directors elected to such office by
the stockholders at a meeting or meetings called for the purpose. In the event
that at any time less than a majority of the directors were so elected by the
stockholders, a special meeting of the stockholders shall be called forthwith
and held as promptly as possible and in any event within sixty days for the
purpose of electing an entire new board of directors.
ARTICLE 6
Certificates of Stock
6.01 Certificates. The board of directors may adopt a policy of not
issuing certificates except in extraordinary situations as may be authorized
from time to time by an officer of the Corporation. If such a policy is adopted,
a stockholder may obtain a certificate or certificates of the capital stock of
the Corporation owned by such stockholder only if the stockholder demonstrates a
specific reason for needing a certificate. If issued, the certificate shall be
in such form as shall, in conformity to law, be prescribed from time to time by
the board of directors. Such certificates shall be signed by the chairman of the
board of directors or the president or a vice president and by the treasurer or
an assistant treasurer or the secretary or an assistant secretary. If such
certificates are countersigned by a transfer agent or registrar other than the
Corporation or an employee of the Corporation, the signatures of the
aforementioned officers upon such certificates may be facsimile. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the Corporation, whether because of death, resignation or
otherwise, before such certificate or certificates have been delivered by the
Corporation, such certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.
6.02 Replacement of Certificates. The board of directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed. When authorizing such issue of a new certificate or certificates, the
board of directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate or
certificates, or its legal representative, to advertise the same in such manner
as it shall require and/or to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
6.03 Stockholder Open Accounts. The corporation may maintain or cause
to be maintained for each stockholder a stockholder open account in which shall
be recorded such stockholder's ownership of stock and all changes therein, and
certificates need not be issued for shares so recorded in a stockholder open
account unless requested by the stockholder and such request is approved by an
officer.
6.04 Transfers. Transfers of stock for which certificates have been
issued will be made only upon surrender to the Corporation or the transfer agent
of the Corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, whereupon
the Corporation will issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction on its books. Transfers of
stock evidenced by open account authorized by Section 6.03 will be made upon
delivery to the Corporation or the transfer agent of the Corporation of
instructions for transfer or evidence of assignment or succession, in each case
executed in such manner and with such supporting evidence as the Corporation or
transfer agent may reasonably require.
6.05 Closing Transfer Books. The transfer books of the stock of the
corporation may be closed for such period (not to exceed 20 days) from time to
time in anticipation of stockholders' meetings or the declaration of dividends
as the directors may from time to time determine.
6.06 Record Dates. The board of directors may fix in advance a date,
not exceeding ninety days preceding the date of any meeting of stockholders, or
the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining any consent or for
any other lawful purpose, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date as fixed shall be entitled to such notice of, and to vote
at, such meeting, and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights, or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.
6.07 Registered Ownership. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner 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 other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Maryland.
ARTICLE 7
Notices
7.01 Manner of Giving. Whenever under the provisions of the statutes or
of the Articles of Incorporation or of these bylaws notice is required to be
given to any director, committee member, officer or stockholder, it shall not be
construed to mean personal notice, but such notice may be given, in the case of
stockholders, in writing, by mail, by depositing the same in a United States
post office or letter box, in a postpaid sealed wrapper, addressed to each
stockholder at such address as it appears on the books of the corporation, or,
in default to other address, to such stockholder at the General Post Office in
the City of Baltimore, Maryland, and, in the case of directors, committee
members and officers, by telephone, or by mail or by telegram to the last
business address known to the secretary of the corporation, and such notice
shall be deemed to be given at the time when the same shall be thus mailed or
telegraphed or telephoned.
7.02 Waiver. Whenever any notice is required to be given under the
provisions of the statutes or of the Articles of Incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE 8
General Provisions
8.01 Disbursement of Funds. All checks, drafts, orders or instructions
for the payment of money and all notes of the corporation shall be signed by
such officer or officers or such other person or persons as the board of
directors may from time to time designate.
8.02 Voting of Stock in Other Corporations. Unless otherwise ordered by
the board of directors, any officer or, at the direction of any such officer,
any Manager shall have full power and authority to attend and act and vote at
any meeting of stockholders of any corporation in which this Corporation may
hold stock, at of any such meeting may exercise any and all the rights and
powers incident to the ownership of such stock. Any officer of this corporation
or, at the direction of any such officer, any Manager may execute proxies to
vote shares of stock of other corporations standing in the name of this
Corporation."
8.03 Execution of Instruments. Except as otherwise provided in these
bylaws, all deeds, mortgages, bonds, contracts, stock powers and other
instruments of transfer, reports and other instruments may be executed on behalf
of the corporation by the president or any vice president or by any other
officer or agent authorized to act in such matters, whether by law, the Articles
of Incorporation, these bylaws, or any general or special authorization of the
board of directors. If the corporate seal is required, it shall he affixed by
the secretary or an assistant secretary.
8.04 Seal. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its incorporation and the words "Corporate Seal,
Maryland." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE 9
Regulations
9.01 Investment and Related Matters. The Corporation shall not purchase
or hold securities in violation of the investment restrictions enumerated in its
then current prospectus and the registration statement or statements filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933
and the Investment Company Act of 1940, as amended, nor shall the Corporation
invest in securities the purchase of which would cause the Corporation to
forfeit its rights to continue to publicly offer its shares under the laws,
rules or regulations of any state in which it may become authorized to so offer
its shares unless, by specific resolution of the board of directors, the
Corporation shall elect to discontinue the sale of its shares in such state.
9.02 Other Matters. When used in this section the following words shall
have the following meanings: "Sponsor" shall mean any one or more corporations,
firms or associations which have distributor's contracts in effect with this
Corporation. "Manager" shall mean any corporation, firm or association which may
at the time have an investment advisory contract with this Corporation.
(a) Limitation of Holdings by this
Corporation of Certain Securities and of Dealings with
Officers or Directors. This Corporation shall not purchase or
retain securities of any issuer if those officers and
directors of the Fund or its Manager owning beneficially more
than one-half of one per cent (0.5%) of the shares or
securities of such issuer together own beneficially more than
five per cent (5%) of such shares or securities; and each
officer and director of this Corporation shall keep the
treasurer of this Corporation informed of the names of all
issuers (securities of which are held in the portfolio of this
Corporation) in which such officer or director owns as much as
one-half of one percent (1/2 of 1%) of the outstanding shares
or securities and (except in the case of a holding by the
treasurer) this Corporation shall not be charged with
knowledge of any such security holding in the absence of
notice given if as aforesaid if this Corporation has requested
such information not less often than quarterly. The
Corporation will not lend any of its assets to the Sponsor or
Manager or to any officer or director of the Sponsor or
Manager or of this Corporation and shall not permit any
officer or director, and any officer or director of the
Sponsor or Manager, to deal for or on behalf of the
Corporation with himself as principal agent, or with any
partnership, association or corporation in which he has a
financial interest. Nothing contained herein shall prevent (1)
officers and directors of the Corporation from buying, holding
or selling shares in the Corporation, or from being partners,
officers or directors of or otherwise financially interested
in the Sponsor or the Manager or any company controlling the
Sponsor or the Manager; (2) employment of legal counsel,
registrar, transfer agent, dividend disbursing agent or
custodian who is, or has a partner shareholder, officer or
director who is, an officer or director of the Corporation, if
only customary fees are charged for services to the
Corporation; (3) sharing statistical and research expenses and
office hire and expenses with any other investment company in
which an officer or director of the Corporation is an officer
or director or otherwise financially interested.
(b) Limitation Concerning Participating by
Interested Persons in Investment Decisions. In any case where
an officer or director of the Corporation or of the Manager,
or a member of an advisory committee or portfolio committee of
the Corporation, is also an officer or a director of another
corporation, and the purchase or sale of shares issued by that
other corporation is under consideration, the officer or
director or committee member concerned will abstain from
participating in any decision made on behalf of the
Corporation to purchase or sell any securities issued by such
other corporation.
(c) Limitation on Dealing in Securities of
this Corporation by certain Officers, Directors, Sponsor or
Manager. Neither the Sponsor nor Manager, nor any officer or
director of this Corporation or of the Sponsor or Manager
shall take long or short positions in securities issued by
this Corporation, provided, however, that:
1) The Sponsor may
purchase from this Corporation shares
issued by this Corporation if the orders to purchase
from this Corporation are entered with this
Corporation by the Sponsor upon receipt by the
Sponsor of purchase orders for shares of this
Corporation and such purchases are not in excess of
purchase orders received by the Sponsor.
(2) The Sponsor may in
the capacity of agent for this Corporation buy
securities issued by this Corporation offered for
sale by other persons.
(3) Any officer or
director of this Corporation or of the
Sponsor or Manager or any Company controlling the
Sponsor or Manager may at any time, or from time to
time, purchase from this Corporation or from the
Sponsor shares issued by this Corporation at a price
not lower than the net asset value of the shares, no
such purchase to be in contravention of any
applicable state or federal requirement.
(d) Securities and Cash of this Corporation
to be held by Custodian subject to certain Terms and
Conditions.
(1) All securities and cash
owned by this Corporation shall as
hereinafter provided, be held by or deposited with a
bank or trust company having (according to its last
published report) not less than two million dollars
($2,000,000) aggregate capital, surplus and undivided
profits (which bank or trust company is hereby
designated as "Custodian"), provided such a Custodian
can be found ready and willing to act.
(2) This Corporation shall
enter into a written contract with
the Custodian regarding the powers, duties and
compensation of the Custodian with respect to the
cash and securities of this Corporation held by the
Custodian. Said contract and all amendments thereto
shall be approved by the board of directors of this
Corporation.
(3) This Corporation shall
upon the resignation or inability to serve of its
Custodian or upon change of the Custodian:
(aa) in case of such
resignation or inability to serve, use its
best efforts to obtain a successor Custodian;
(bb) require that the
cash and securities owned by this
Corporation be delivered directly to the
successor Custodian; and
(cc) In the event that
no successor Custodian
can be found, submit to the stockholders,
before permitting delivery of the cash and
securities owned by this Corporation
otherwise than to a successor Custodian, the
question whether or not this Corporation
shall be liquidated or shall function
without a Custodian.
(e) Amendment of Investment Advisory
Contract. Any investment advisory contract entered into by
this Corporation shall not be subject to amendment except by
(1) affirmative vote at a shareholders meeting, of the holders
of a majority of the outstanding stock of this Corporation, or
(2) a majority of such Directors who are not interested
persons (as the term is defined in the Investment Company Act
of 1940) of the Parties to such agreements, cast in person at
a board meeting called for the purpose of voting on such
amendment.
(f) Reports relating to Certain Dividends.
Dividends paid from net profits from the sale of securities
shall be clearly revealed by this Corporation to its
shareholders and the basis of calculation shall be set forth.
(g) Maximum Sales Commission. The
Corporation shall, in any distribution contract with respect
to its shares of common stock entered into by it, provide that
the maximum sales commission to be charged upon any sales of
such shares shall not be more than nine per cent (9%) of the
offering price to the public of such shares. As used herein,
"offering price to the public" shall mean net asset value per
share plus the commission charged adjusted to the nearest
cent.
ARTICLE 10
Purchases and Redemption of Shares:
Suspension of Sales
10.01 Purchase by Agreement. The Corporation may purchase its shares by
agreement with the owner at a price not exceeding the net asset value next
computed following the time when the purchase or contract to purchase is made.
10.02 Redemption. The Corporation shall redeem such shares as are
offered by any stockholder for redemption upon the presentation of a written
request therefor, duly executed by the record owner, to the office or agency
designated by the corporation. If the shareholder has received stock
certificates, the request must be accompanied by the certificates, duly endorsed
for transfer, in acceptable form; and the Corporation will pay therefor the net
asset value of the shares next effective following the time at which the
request, in acceptable form, is so presented. Payment for said shares shall
ordinarily be made by the Corporation to the stockholder within seven days after
the date on which the shares are presented.
10.03 Suspension of Redemption. The obligations set out in Section
10.02 may be suspended (i) for any period during which the New York Stock
Exchange, Inc. is closed other than customary week-end and holiday closings, or
during which trading on the New York Stock Exchange, Inc. is restricted, as
determined by the rules and regulations of the Securities and Exchange
Commission or any successor thereto; (ii) for any period during which an
emergency, as determined by the rules and regulations of the Securities and
Exchange Commission or any successor thereto, exists as a result of which
disposal by the Corporation of securities owned by it is not reasonably
practicable or as a result of which it is not reasonably practicable for the
Corporation to fairly determine the value of its net assets; or (iii) for such
other periods as the Securities and Exchange Commission or any successor thereto
may by order permit for the protection of security holders of the Corporation.
Payment of the redemption or purchase price may be made in cash or, at the
option of the Corporation, wholly or partly in such portfolio securities of the
Corporation as the Corporation may select.
10.04 Suspension of Sales. The Corporation reserves the right to
suspend sales of its shares if, in the judgment of the majority of the board of
directors or a majority of the executive committee of its Board, if such
committee exists, it is in the best interest of the Corporation to do so, such
suspension to continue for such period as may be determined by such majority.
ARTICLE 11
Fractional Shares
11.01 The board of directors may authorize the issue from time to time
of shares of the capital stock of the corporation in fractional denominations,
provided that the transactions in which and the terms upon which shares in
fractional denominations may be issued may from time to time be determined and
limited by or under authority of the board of directors.
ARTICLE 12
Indemnification
12.01
(a) Every person who is or was a director,
officer or employee of this Corporation or of any other
corporation which he served at the request of this Corporation
and in which this Corporation owns or owned shares of capital
stock or of which it is or was a creditor shall have a right
to be indemnified by this Corporation against all liability
and reasonable expenses incurred by him in connection with or
resulting from a claim, action, suit or proceeding in which he
may become involved as a party or otherwise by reason of his
being or having been a director, officer or employee of this
Corporation or such other corporation, provided (1) said
claim, action, suit or proceeding shall be prosecuted to a
final determination and he shall be vindicated on the merits,
or (2) in the absence of such a final determination
vindicating him on the merits, the board of directors shall
determine that he acted in good faith and in a manner he
reasonably believed to be in the best interest of the
Corporation in the case of conduct in the director's official
capacity with the Corporation and in all other cases, that the
conduct was at least not opposed to the best interest of the
Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful; said determination to be made by the board of
directors acting through a quorum of disinterested directors,
or in its absence on the opinion of counsel.
(b) For purposes of the preceding
subsection: (1) "liability and reasonable expenses" shall
include hut not be limited to reasonable counsel fees and
disbursements, amounts of any judgment, fine or penalty, and
reasonable amounts paid in settlement; (2) "claim, action,
suit or proceeding" shall include every such claim, action,
suit or proceeding, whether civil or criminal, derivative or
otherwise, administrative, judicial or legislative, any appeal
relating thereto, and shall include any reasonable
apprehension or threat of such a claim, action, suit or
proceeding; (3) the termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo
contendere or its equivalent creates a rebuttable presumption
that the director did not meet the standard of conduct set
forth in subsection (a)(2), supra.
(c) Notwithstanding the foregoing, the
following limitations shall apply with respect to any action
by or in the right of the Corporation: (1) no indemnification
shall be made in respect of claim, issue or matter as to which
the person seeking indemnification shall have been adjudged to
be liable for negligence or misconduct in the performance of
his duty to the Corporation unless and only to the extent that
the Court of Chancery of the State of Maryland or the court in
which such action or suit was brought shall determine upon
application that despite the adjudication of liability but in
view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem
proper; and (2) indemnification shall extend only to
reasonable expenses, including reasonable counsel's fees and
disbursements.
(d) The right of indemnification shall
extend to any person otherwise entitled to it under this bylaw
whether or not that person continues to be a director, officer
or employee of this Corporation or such other corporation at
the time such liability or expense shall be incurred. The
right of indemnification shall extend to the legal
representative and heirs of any person otherwise entitled to
indemnification. If a person meets the requirements of this
bylaw with respect to some matters in a claim, action suit, or
proceeding, but not with respect to others, he shall be
entitled to indemnification as to the former. Advances against
liability and expenses may be made by the Corporation on terms
fixed by the board of directors subject to an obligation to
repay if indemnification proves unwarranted.
(e) This bylaw shall not exclude any other
rights of indemnification or other rights to which any
director, officer or employee may be entitled to by contract,
vote of the stockholders or as a matter of law.
If any clause, provision or application of
this section shall be determined to be invalid, the other
clauses, provisions or applications of this section shall not
be affected but shall remain in full force and effect. The
provisions of this bylaw shall be applicable to claims,
actions, suits or proceedings made or commenced after the
adoption hereof, whether arising from acts or omissions to act
occurring before or after the adoption hereof.
(f) Nothing contained in this bylaw shall be
construed to protect any director or officer of the
Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of
his office.
ARTICLE 13
Amendments
13.01 These bylaws may be amended or added to, altered or repealed at
any annual or special meeting of the stockholders by the affirmative vote of the
holders of a majority of the shares of capital stock issued and outstanding and
entitled to vote, provided notice of the general purport of the proposed
amendment, addition, alteration or repeal is given in the notice of said
meeting, or, at any meeting of the board of directors by vote of a majority of
the directors then in office, except that the board of directors may not amend
Article 5 to permit removal by said board without cause of any director elected
by the stockholders.
