Exhibit 10
Form 10-SB
New Horizon Education, Inc.
BYLAWS
OF
NEW HORIZON EDUCATION, INC.
A Utah Corporation
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INDEX TO BYLAWS
OF
CYBERCENTERS INTERNATIONAL, INC.
Page
ARTICLE I - Offices
Section 1.01 Business Offices 1
Section 1.02 Principal Office 1
Section 1.03 Registered Office 1
ARTICLE II - Shareholders
Section 2.01 Annual Meeting 1
Section 2.02 Special Meetings 2
Section 2.03 Place of Meetings 2
Section 2.04 Notice of Meetings 2
Section 2.05 Fixing of Record Date 3
Section 2.06 Shareholder List for Meetings 4
Section 2.07 Shareholder Quorum and Voting
Requirements 4
Section 2.08 Increasing Quorum or Voting
Requirements 5
Section 2.09 Proxies 5
Section 2.10 Voting of Shares 6
Section 2.11 Corporation's Acceptance of Votes 6
Section 2.12 Action Without a Meeting 7
Section 2.13 Meetings by Telecommunication 8
Section 2.14 Voting Trusts and Agreements 8
Section 2.15 Voting for Directors 9
Section 2.16 Maintenance of Records and Shareholder
Inspection Rights 9
Section 2.17 Financial Statements and Share
Information 10
Section 2.18 Dissenters' Rights 10
Section 2.19 Shares Held by Nominees 10
ARTICLE III - Board of Directors
Section 3.01 General Powers 11
Section 3.02 Number, Tenure and Qualifications 11
Section 3.03 Resignation 11
Section 3.04 Removal 11
Section 3.05 Vacancies 12
Section 3.06 Regular Meetings 12
Section 3.07 Special Meetings 12
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Section 3.08 Place of Meetings -- Meetings by
Telephone 12
Section 3.09 Notice of Meetings 13
Section 3.10 Waiver of Notice 13
Section 3.11 Quorum and Manner of Acting 13
Section 3.12 Action Without a Meeting 14
Section 3.13 Altering Quorum or Voting
Requirements 14
Section 3.14 Compensation 14
Section 3.15 Committees 15
Section 3.16 Standards of Conduct 15
Section 3.17 Limitation of Liability 16
Section 3.18 Liability for Unlawful Distributions 16
Section 3.19 Conflicting Interest Transactions 16
ARTICLE IV - Officers
Section 4.01 Number and Qualifications 17
Section 4.02 Appointment and Term of Office 17
Section 4.03 Removal and Resignation of Officers 17
Section 4.04 Authority and Duties. 17
Section 4.05 Surety Bonds 19
Section 4.06 Compensation 19
ARTICLE V - Standards of Conduct for Officers and Directors
Section 5.01 Standards of Conduct 19
Section 5.02 Reliance on Information and Reports 20
Section 5.03 Limitation on Liability 20
ARTICLE VI - Indemnification
Section 6.01 Indemnification of Directors 20
Section 6.02 Advance Expenses for Directors 21
Section 6.03 Indemnification of Officers, Employees,
Fiduciaries, and Agents 21
Section 6.04 Insurance 22
Section 6.05 Scope of Indemnification 22
Section 6.06 Other Rights and Remedies 23
Section 6.07 Severability 23
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ARTICLE VII - Stock
Section 7.01 Issuance of Shares 23
Section 7.02 Certificates for Shares; Shares
Without Certificates 23
Section 7.03 Restrictions on Transfer of Shares
Permitted 25
Section 7.04 Acquisition of Shares by the
Corporation 25
ARTICLE VIII - Amendments to Bylaws
Section 8.01 Authority to Amend 25
Section 8.02 Bylaw Changing Quorum or Voting
Requirement for Shareholders 26
Section 8.03 Bylaw Changing Quorum or Voting
Requirement for Directors 26
ARTICLE IX - Miscellaneous
Section 9.01 Corporate Seal 26
Section 9.02 Fiscal Year 26
BYLAWS
OF
NEW HORIZON EDUCATION, INC.
ARTICLE I
Offices
Section 1.01 Business Offices. The corporation may have such
offices, either within or outside Utah, as the Board of Directors
may from time to time determine or as the business of the
corporation may from time to time require.
Section 1.02 Principal Office. The principal office of the
corporation shall be located at any place either within or
outside Utah as may be designated in the most recent document on
file with the Utah Department of Commerce, Division of
Corporations and Commercial Code (the "Division") providing
information regarding the principal office of the corporation.
The corporation shall
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maintain at its principal office a copy of such corporate records
as may be required by Section 1601 of the Utah Revised Business
Corporation Act ("the "Act") and Section 2.16 of these bylaws.
Section 1.03 Registered Office. The registered office of the
corporation required by Section 501 of the Act to be maintained
in Utah shall be the registered office as originally so
designated in the corporation's articles of incorporation or
subsequently designated as the corporation's registered office in
the most recent document on file with the Division providing such
information. The corporation shall maintain a registered agent at
the registered office, as required by Section 501 of the Act. The
registered office and registered agent may be changed from time
to time as provided in Sections 502 and 503 of the Act.
ARTICLE II
Shareholders
Section 2.01 Annual Meeting. The annual meeting of
shareholders shall be held each year on a date and at a time
designated by the Board of Directors. In the absence of such
designation, the annual meeting of shareholders shall be held on
the second Monday of July in each year at 10:00 a.m. However, if
the day fixed for the annual meeting is a legal holiday in Utah,
then the meeting shall be held at the same time and place on the
next succeeding business day. At the meeting, directors shall be
elected and any other proper business may be transacted. If the
election of directors shall not be held on the day designated
herein for any annual meeting of the shareholders, or at any
adjournment thereof, the Board of Directors shall cause the
election to be held at a meeting of the shareholders as soon
thereafter as may be convenient. Failure to hold an annual
meeting as required by these bylaws shall not affect the validity
of any corporate action or work a forfeiture or dissolution of
the corporation. (Section 701 of the Act).
Section 2.02 Special Meetings. Special meetings of the
shareholders may be called at any time by the Board of Directors,
by the Chairman of the Board, by the President of the
corporation, by any two directors of the corporation, or by such
other officers or persons as may be authorized by these Bylaws to
call a special meeting, or by the holders of shares representing
at least ten percent (10%) of all of the votes entitled to be
cast on any issue proposed to be considered at the meeting, all
in accordance with Section 702 of the Act.
Section 2.03 Place of Meetings. Each annual or special
meeting of the shareholders shall be held at such place, either
within or outside Utah, as may be designated by the Board of
Directors. In the absence of any such designation, meetings shall
be held at the principal office of the corporation. (Sections 701
and 702 of the Act)
Section 2.04 Notice of Meetings.
(a) Required Notice. The corporation shall give notice to
shareholders of the date, time, and place of each annual and
special meeting of shareholders no fewer than ten (10) nor more
than sixty
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(60) days before the meeting date, in accordance with the
requirements of Sections 103 and 705 of the Act. Unless otherwise
required by law or the articles of incorporation, the corporation
is required to give the notice only to shareholders entitled to
vote at the meeting. The notice requirement will be excused under
certain circumstances with respect to shareholders whose
whereabouts are unknown, as provided in Section 705(5) of the
Act.
If the proposed corporate action creates dissenters' rights,
the notice must be sent to all shareholders of the corporation as
of the applicable record date, whether or not they are entitled
to vote at the meeting (Section 1320(1) of the Act).
(b) Contents of Notice. The notice of each special meeting
must include a description of the purpose or purposes for which
the meeting is called (see Section 702(4) of the Act). Except as
provided in this Section 2.04(b), or as otherwise required by the
Act, other applicable law, or the articles of incorporation,
notice of an annual meeting need not include a description of the
purpose or purposes for which the meeting is called.
If a purpose of any shareholder meeting is to consider: (1)
a proposed amendment to the articles of incorporation (Section
1003(4) of the Act); (2) a plan of merger or share exchange
(Section 1103(4) of the Act); (3) the sale, lease, exchange or
other disposition of all, or substantially all of the
corporation's property (Section 1202(5) of the Act); (4) the
dissolution of the corporation (Section 1402(4) of the Act); or
(5) the removal of a director (Section 808(4) of the Act), the
notice must so state and be accompanied by a copy or summary of
the transaction documents, as set forth in the above-referenced
sections of the Act. If the proposed corporate action creates
dissenters' rights, the notice must state that shareholders are,
or may be, entitled to assert dissenters' rights, and must be
accompanied by a copy of Part 13 of the Act (see Section 1320(1)
of the Act).
(c) Adjourned Meeting. If any annual or special meeting of
shareholders is adjourned to a different date, time or place,
then subject to the requirements of the following sentence notice
need not be given of the new date, time and place if the new
date, time and place are announced at the meeting before
adjournment. If the adjournment is for more than thirty (30)
days, or if after the adjournment a new record date for the
adjourned meeting is or must be fixed under Section 707 of the
Act and Section 2.05 of these bylaws, notice of the adjourned
meeting must be given pursuant to the requirements of paragraph
2.04(a) of these bylaws to shareholders of record entitled to
vote at the meeting, as provided in Section 705(4)(b) of the Act.
(d) Waiver of Notice. A shareholder may waive notice of any
meeting (or any other notice required by the Act, the articles of
incorporation or these bylaws) by a writing signed by the
shareholder entitled to the notice, which is delivered to the
corporation (either before or after the date and time stated in
the notice as the date and time when any action will occur), for
inclusion in the minutes or filing with the corporation records.
A shareholder's attendance at a meeting: (a) waives objection to
lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting objects to holding
the meeting or transacting business at the meeting because of
lack of notice or defective notice; and (b) waives objection to
consideration of a particular matter at the
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meeting that is not within the purpose or purposes described in
the meeting notice, unless the shareholder objects to considering
the matter when it is presented. (Section 706 of the Act).
Section 2.05 Fixing of Record Date. For the purpose of
determining shareholders of any voting group entitled to: (i)
notice of or to vote at any meeting of shareholders or any
adjournment thereof; (ii) take action without a meeting; (iii)
demand a special meeting; (iv) receive payment of any
distribution or share dividend; or (v) take any other action, the
board of directors may fix in advance a date as the record date
(as defined in Section 102(28) of the Act) for one or more voting
groups. As provided in Section 707(3) of the Act, a record date
fixed pursuant to such section may not be more than 70 days prior
to the date on which the particular action requiring such
determination of shareholders is to be taken. If no record date
is otherwise fixed by the board as provided herein, then the
record date for the purposes set forth below shall be the close
of business on the dates indicated:
(a) With respect to a determination of shareholders entitled
to notice of and to vote at an annual or special meeting of
shareholders, the day before the first notice is delivered to
shareholders (see Section 707(2) of the Act);
(b) With respect to a determination of shareholders entitled
to demand a special meeting of shareholders pursuant to Section
702(1)(b) of the Act, the later of (i) the earliest date of any
of the demands pursuant to which the meeting is called, and (ii)
the date that is sixty days prior to the date the first of the
written demands pursuant to which the meeting is called is
received by the corporation (see Section 702(2) of the Act);
(c) With respect to a determination of shareholders entitled
to a share dividend, the date the board authorizes the share
dividend (see Section 623(3) of the Act);
(d) With respect to a determination of shareholders entitled
to take action without a meeting (pursuant to Section 2.12 of
these bylaws and Section 704 of the Act) or entitled to be given
notice of an action so taken, the date the first shareholder
delivers to the corporation a writing upon which the action is
taken (see Section 704(6) of the Act); and
(e) With respect to a determination of shareholders entitled
to a distribution (other than one involving a purchase or
reacquisition of shares for which no record date is necessary),
the date the board of directors authorizes the distribution (see
Section 640(2) of the Act).
A determination of shareholders entitled to notice of or to
vote at any meeting of shareholders is effective for any
adjournment of the meeting unless the board of directors fixes a
new record date, which it must do if the meeting is adjourned to
a date more than 120 days after the date fixed for the original
meeting (see Section 707(4) of the Act).
Section 2.06 Shareholder List for Meetings. The officer or
agent having charge of the stock transfer books for shares of the
corporation shall prepare a list of the names of all shareholders
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entitled to be given notice of, and to vote at, each meeting of
shareholders, in compliance with the requirements of Section 720
of the Act. The list must be arranged by voting group and within
each voting group by class or series of shares. The list must be
in alphabetical order within each class or series of shares and
must show the address of, and the number of shares held by, each
shareholder. The shareholder list must be available for
inspection by any shareholder, beginning on the earlier of (i)
ten days before the meeting for which the list was prepared, or
(ii) two business days after notice of the meeting is given, and
continuing through the meeting and any adjournments thereof. The
list must be available at the corporation's principal office or
at a place identified in the meeting notice in the city where the
meeting is to be held. A shareholder or a shareholder's agent or
attorney is entitled on written demand to the corporation, and
subject to the provisions of Sections 720, 602 and 1603 of the
Act, to inspect and copy the list during regular business hours,
during the period it is available for inspection. The list is to
be available at the meeting for which it was prepared, and any
shareholder or any shareholder's agent or attorney is entitled to
inspect the list at any time during the meeting for any purpose
germane to the meeting. The shareholder list is to be maintained
in written form or in another form capable of conversion into
written form within a reasonable time (see Section 1601(4) of the
Act).
Section 2.07 Shareholder Quorum and Voting Requirements. If
the articles of incorporation or the Act provides for voting by a
single voting group on a matter, action on that matter is taken
when voted upon by that voting group. Shares entitled to vote as
a separate voting group may take action on a matter at a meeting
only if a quorum of such shares exists with respect to that
matter. Unless the articles of incorporation, a bylaw adopted
pursuant to Section 2.08 hereof, or the Act provide otherwise, a
majority of the votes entitled to be cast on the matter by the
voting group constitutes a quorum of that group for action on
that matter.
If the articles of incorporation or the Act provides for
voting by two or more voting groups on a matter, action on that
matter is taken only when voted upon by each of those voting
groups counted separately. One voting group may vote on a matter
even though another voting group entitled to vote on the matter
has not voted.
Once a share is represented for any purpose at a meeting,
including the purpose of determining that a quorum exists, it is
deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of the meeting, unless a new
record date is or must be set for the adjourned meeting.
If a quorum exists, action on a matter (other than the
election of directors) by a voting group is approved if the votes
cast within the voting group favoring the action exceed the votes
cast within the voting group opposing the action, unless the
articles of incorporation, a bylaw adopted pursuant to Section
2.08 hereof, or the Act requires a greater number of affirmative
votes. (See Sections 725 and 726 of the Act). Those matters as to
which the Act provides for a special voting requirement,
typically requiring the vote of a majority of all votes entitled
to be cast, or a majority of all voting shares within each voting
group which is entitled to vote separately, include certain
amendments to
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the articles of incorporation, mergers, sales of substantially
all corporate assets, and dissolution of the corporation.
Section 2.08 Increasing Quorum or Voting Requirements. As
specified in Section 727 of the Act, the articles of
incorporation may provide for a greater quorum or voting
requirement for shareholders, or voting groups of shareholders,
than is provided for by the Act. An amendment to the articles of
incorporation that changes or deletes a greater quorum or voting
requirement must meet the same quorum
requirement and be adopted by the same vote and voting groups
required to take action under the quorum and voting requirements
then in effect. Pursuant to Section 1021 of the Act, if
authorized by the articles of incorporation, the shareholders may
adopt, amend, or repeal a bylaw that fixes a greater quorum or
voting requirement for shareholders, or voting groups of
shareholders, than is required by the Act. Any such action is
subject to the provisions of Part 7 of the Act. A bylaw that
fixes a greater quorum or voting requirement for shareholders as
set forth in the preceding sentence may not be adopted, amended,
or repealed by the board of directors.
Section 2.09 Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy. A shareholder may
appoint a proxy by signing an appointment form, either personally
or by the shareholder's attorney-in fact, or by any of the other
means set forth in Section 722 of the Act. A proxy appointment is
valid for eleven months unless a longer period is expressly
provided in the appointment form. The effectiveness and
revocability of proxy appointments are governed by Section 722 of
the Act.
Section 2.10 Voting of Shares. Unless otherwise provided in
the articles of incorporation, in Section 721 of the Act, or
other applicable law, each outstanding share, regardless of
class, is entitled to one vote, and each fractional share is
entitled to a corresponding fractional vote, on each matter voted
on at a shareholders' meeting. Only shares are entitled to vote.
Except as otherwise provided by specific court order as
contemplated by Section 721(2) of the Act, shares of this
corporation are not entitled to be voted or to be counted in
determining the total number of outstanding shares eligible to be
voted if they are owned, directly or indirectly, by a second
corporation, domestic or foreign, and this corporation owns,
directly or indirectly, a majority of the shares entitled to vote
for directors of the second corporation. The prior sentence shall
not limit the power of the corporation to vote any shares,
including its own shares, held by it in a fiduciary capacity.
Redeemable shares are not entitled to be voted after notice of
redemption is mailed to the holders and a sum sufficient to
redeem the shares has been deposited with a bank, trust company,
or other financial institution under an irrevocable obligation to
pay the holders the redemption price on surrender of the shares.
Section 2.11 Corporation's Acceptance of Votes. If the name
signed on a vote, consent, waiver, proxy appointment, or proxy
appointment revocation corresponds to the name of a shareholder,
the corporation, if acting in good faith, is entitled to accept
the vote, consent, waiver,
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proxy appointment, or proxy appointment revocation and give it
effect as the act of the shareholder, as provided in Section 724
of the Act.
If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation does not correspond
to the name of a shareholder, the corporation, if acting in good
faith, is nevertheless entitled to accept the vote, consent,
waiver, proxy appointment, or proxy appointment revocation and
give it effect as the act of the shareholder if:
(a) the shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity;
(b) the name signed purports to be that of an administrator,
executor, guardian, or conservator representing the shareholder
and, if the corporation requests, evidence of fiduciary status
acceptable to the corporation has been presented with respect to
the vote, consent, waiver, proxy appointment, or proxy
appointment revocation;
(c) the name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the corporation
has been presented with respect to the vote, consent, waiver,
proxy appointment, or proxy appointment revocation;
(d) the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if
the corporation requests, evidence acceptable to the corporation
of the signatory's authority to sign for the shareholder has been
presented with respect to the vote, consent, waiver, proxy
appointment, or proxy appointment revocation;
(e) two or more persons are the shareholder as cotenants or
fiduciaries and the name signed purports to be the name of- at
least one of the cotenants or fiduciaries and the person signing
appears to be acting on behalf of all cotenants or fiduciaries;
or
(f) the acceptance of the vote, consent, waiver, proxy
appointment, or proxy appointment revocation is otherwise proper
under rules established by the corporation that are not
inconsistent with the provisions of Section 724 of the Act.
If shares are registered in the names of two or more
persons, whether fiduciaries, members of a partnership,
cotenants, husband and wife as community property, voting
trustees, persons entitled to vote under a shareholder voting
agreement or otherwise, or if two or more persons, including
proxyholders, have the same fiduciary relationship respecting the
same shares, then unless the secretary of the corporation or
other officer or agent entitled to tabulate votes is given
written notice to the contrary and is furnished with a copy of
the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect
to voting shall have the effects set forth in Section 724(3) of
the Act.
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The corporation is entitled to reject a vote, consent,
waiver, proxy appointment, or proxy appointment revocation if the
secretary or other officer or agent authorized to tabulate votes,
acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's
authority to sign for the shareholder.
The corporation and its officer or agent who accepts or
rejects a vote, consent, waiver, proxy appointment, or proxy
appointment revocation in good faith and in accordance with the
standards of Section 724 of the Act are not liable in damages to
the shareholder for the consequences of the acceptance or
rejection.
Corporate action based on the acceptance or rejection of a
vote, consent, waiver, proxy appointment, or proxy appointment
revocation under this section and Section 724 of the Act is valid
unless a court of competent jurisdiction determines otherwise.
Section 2.12 Action Without a Meeting. Unless otherwise
provided in the articles of incorporation, and subject to the
provisions of Section 704 of the Act, any action required or
permitted to be taken at a meeting of the shareholders may be
taken without a meeting and without prior notice, if one or more
consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares having no less than
the minimum number of votes that would be necessary to authorize
or take the action at a meeting at which all shares entitled to
vote thereon were present and voted. Unless the written consents
of all shareholders entitled to vote have been obtained, notice
of any shareholder approval without a meeting shall be given at
least ten days before the consummation of the action authorized
by the approval. Such notice shall meet the requirements of, and
be delivered to all shareholders identified in, Section 704(2) of
the Act.
Any shareholder giving a written consent, or the
shareholder's proxyholder, personal representative or transferee
may revoke a consent by a signed writing describing the action
and stating that the shareholder's prior consent is revoked, if
the writing is received by the corporation prior to the
effectiveness of the action, as provided in Section 704(3) of the
Act.
An action taken by written consent of the shareholders as
provided herein is not effective unless all written consents on
which the corporation relies for the taking of the action are
received by the corporation within a sixty day period. An action
so taken is effective as of the date the last written consent
necessary to effect the action is received by the corporation,
unless all of the written consents necessary to effect the action
specify a later date as the effective date of the action, in
which case the later date shall be the effective date of the
action.
Unless otherwise provided in these bylaws, the written
consents may be received by the corporation by electronically
transmitted facsimile or other form of communication providing
the corporation with a complete copy thereof, including a copy of
the signature thereto.
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Notwithstanding the other provisions of this bylaw,
directors may not be elected by written consent except by
unanimous written consent of all shares entitled to vote for the
election of directors.
As set forth in Section 2.05(d) above, if not otherwise
determined as permitted by the Act and these bylaws, the record
date for determining shareholders entitled to take action without
a meeting or entitled to be given notice of any action so taken
is the date the first shareholder delivers to the corporation a
writing upon which the action is taken.
An action taken by written consent of the shareholders as
provided herein has the same effect as action taken at a meeting
of shareholders, and may be so described in any document.
Section 2.13 Meetings by Telecommunication. As permitted by
Section 708 of the Act, unless otherwise provided in these
bylaws, any or all of the shareholders may participate in an
annual or special meeting of shareholders by, or the meeting may
be conducted through the use of, any means of communication by
which all persons participating in the meeting can hear each
other during the meeting. A shareholder participating in a
meeting by this means is considered to be present in person at
the meeting.
Section 2.14 Voting Trusts and Agreements. Voting trusts and
agreements may be entered into among the shareholders in
compliance with the requirements of Sections 730, 731 and 732 of
the Act.
Section 2.15 Voting for Directors. Unless otherwise provided
in the articles of incorporation or the Act, directors are
elected by a plurality of the votes cast by the shares entitled
to vote in the election at a meeting at which a quorum is
present, in accordance with the requirements and procedures set
forth in Section 728 of the Act. Cumulative voting is permitted
only if specifically provided in the articles of incorporation.
Section 2.16 Maintenance of Records and Shareholder
Inspection Rights.
(a) Corporate Records. As required by Section 1601 of the
Act, the corporation shall keep as permanent records minutes of
all meetings of its shareholders and board of directors, a record
of all actions taken by the shareholders or board of directors
without a meeting, a record of all actions taken on behalf of the
corporation by a committee of the board of directors in place of
the board of directors, and a record of all waivers of notices of
meetings of shareholders, meetings of the board of directors, or
any meetings of committees of the board of directors. The
corporation shall also maintain appropriate accounting and
shareholder records as required by the statute. The corporation
shall keep at its principal office those corporate records and
documents identified in Section 1601(5) of the Act and listed in
the following paragraph.
(b) Inspection Rights of Records Required at Principal
Office. Pursuant to Section 1602(1) of the Act, a shareholder or
director of the corporation (or such person's agent or attorney)
who gives
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the corporation written notice of the demand at least five
business days before the proposed inspection date, has the right
to inspect and copy, during regular business hours, any of the
following records, all of which the corporation is required to
keep at its principal office:
(i) its articles of incorporation as then in effect;
(ii) its bylaws as then in effect;
(iii) the minutes of all shareholders' meetings, and records
of all actions taken by shareholders without a meeting, for the
past three years;
(iv) all written communications within the past three years
to shareholders as a group or to the holders of any class or
series of shares as a group;
(v) a list of the names and addresses of its current
officers and directors;
(vi) its most recent annual report delivered to the
Division; and
(vii) all financial statements prepared for periods ending
during the last three years that a shareholder could request
under Section 1605 of the Act.
(c) Conditional Inspection Rights. In addition to the
inspection rights set forth in paragraph (b) above, as provided
in Section 1602(2) of the Act, a shareholder or director of the
corporation (or such person's agent or attorney) who gives the
corporation a written demand in good faith and for a proper
purpose at least five business days before the requested
inspection date, and describes in the demand with reasonable
particularity the records proposed to be inspected and the
purpose of the inspection, is entitled to inspect and copy,
during regular business hours at a reasonable location specified
by the corporation, any of the following records of the
corporation:
(i) excerpts from minutes of meetings of, and from actions
taken by, the shareholders, the board of directors, or any
committees of the board of directors, to the extent not subject
to inspection under paragraph (b) of this Section 2.16;
(ii) accounting records of the corporation; and
(iii) the record of shareholders (compiled no earlier than
the date of the demand for inspection).
For the purposes of paragraph (c), a proper purpose means a
purpose reasonably related to the demanding party's interest as a
shareholder or director. A party may not use any information
obtained through the inspection or copying of records permitted
by this paragraph (c) for any purposes other than those set forth
in a proper demand as described above, and the officers of the
corporation are authorized to take appropriate steps to ensure
compliance with this limitation.
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Section 2.17 Financial Statements and Share Information.
Upon the written request of any shareholder, the corporation
shall mail to the requesting shareholder:
(i) its most recent annual or quarterly financial statements
showing in reasonable detail its assets and liabilities and the
results of its operations, as required by Section 1605 of the
Act; and
(ii) the information specified by Section 625(3) of the Act,
regarding the designations, preferences, limitations, and
relative rights applicable to each class and series of shares of
the corporation, and the authority of the board of directors to
determine variations for any existing or future class or series,
as required by Section 1606 of the Act.
Section 2.18 Dissenters' Rights. Each shareholder of the
corporation shall have the right to dissent from, and obtain
payment of the fair value of shares held by such shareholder in
the event of, any of the corporate actions identified in Section
1302 of the Act or otherwise designated in the articles of
incorporation, these bylaws, or in a resolution of the board of
directors.
Section 2.19 Shares Held by Nominees. As provided in Section
723 of the Act, the Board of Directors is authorized to establish
for the corporation from time to time such procedures as the
directors may determine to be appropriate, by which the
beneficial owner of shares that are registered in a nominee is
recognized by the corporation as a shareholder.
ARTICLE III
Board of Directors
Section 3.01 General Powers. As provided in Section 801 of
the Act, all corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation
shall be managed under the direction of, the board of directors,
subject to any limitation set forth in the articles of
incorporation or in a shareholder agreement permitted by Section
732 of the Act.
Section 3.02 Number, Tenure and Qualifications. Unless
otherwise specifically provided in the articles of incorporation,
and subject to the provisions of Section 803 of the Act, the
number of directors of the corporation shall be as fixed from
time to time by resolution of the board of directors or
shareholders, but in no instance shall there be fewer directors
than the minimum number required by Section 803 of the Act. At
the time of adoption of these bylaws, the articles of
incorporation do include provisions relating to the size and
composition of the Company's Board of Directors, and such
provisions supersede any inconsistent provisions in these bylaws.
As provided in the articles of incorporation, and subject to the
limitations set forth therein, the corporation's board of
directors currently consists of three (3) members, and in no
event shall the number of directors be less than three (3) nor
more than to five (5) members.
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Each director shall hold office until the next annual
meeting of shareholders (unless the articles of incorporation
provide for staggering the terms of directors as permitted by
Section 806 of the Act) or until removed. However. a director
whose term expires shall continue to serve until such director's
successor shall have been elected and qualified or until there is
a decrease in the authorized number of directors. No decrease in
the authorized number of directors shall have the effect of
shortening the term of any incumbent director. Unless required by
the articles of incorporation, directors do not need to be
residents of Utah or shareholders of the corporation.
If the articles of incorporation authorize dividing the
shares into classes or series, the articles of incorporation may
also authorize the election of all or a specified number or
portion of directors by the holders of one or more authorized
classes or series of shares, as provided in Section 804 of the
Act.
Section 3.03 Resignation. Any director may resign at any
time by giving a written notice of resignation to the
corporation. A director's resignation is effective when the
notice is received by the corporation, or on such later date as
may be specified in the notice of resignation. (Section 807 of
the Act).
Section 3.04 Removal. The shareholders may remove one or
more directors at a meeting called for that purpose, as
contemplated by Section 808 of the Act, if the meeting notice
states that a purpose of the meeting is such removal. The removal
may be with or without cause unless the articles of incorporation
provide that directors may be removed only for cause. If a
director is elected by a voting group of shareholders, only the
shareholders of that voting group may participate in the vote to
remove the director. If the articles of incorporation provide for
cumulative voting for the election of directors, a director may
not be removed if a number of votes sufficient to elect the
director under such cumulative voting is voted against removal.
If cumulative voting is not in effect, a director may be removed
only if the number of votes cast to remove the director exceeds
the number of votes cast against removal.
Section 3.05 Vacancies. Unless the articles of incorporation
provide otherwise, if a vacancy occurs on the board of directors,
including a vacancy resulting from an increase in the number of
directors, the vacancy may be filled by the shareholders or the
board of directors (as provided in Section 810 of the Act).
If the vacant office was held by a director elected by a
voting group of shareholders, only the holders of the shares of
that voting group are entitled to vote to fill the vacancy if it
is filled by the shareholders.
A vacancy that will occur at a specific later date (by
reason of a resignation effective at a later date or otherwise)
may be filled before the vacancy occurs, but the new director may
not take office until the vacancy occurs.
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The terms of directors elected to fill vacancies generally
expire at the next annual shareholders' meeting. If a new
director is elected to fill a vacancy in a position having a term
extending beyond the date of the next annual meeting of
shareholders, the term of such new director is governed by
Section 805(4) of the Act.
Section 3.06 Regular Meetings. Regular meetings of the board
of directors may be held without notice of the date, time, place
or purposes of the meetings, if the times of such meetings are
fixed by resolution of the board of directors. (Section 820 of
the Act)
Section 3.07 Special Meetings. Special meetings of the board
of directors may be called by or at the request of the president
or any two directors. The person or persons authorized to call
special meetings of the board of directors may fix the time and
place of the meetings so called. (Section 820 of the Act)
Section 3.08 Place of Meetings -- Meetings by Telephone. The
board of directors may hold regular or special meetings in or out
of the State of Utah. Unless the articles of incorporation or
bylaws provide otherwise, the board of directors may permit any
or all directors to participate in a regular or special meeting
by, or conduct the meeting through the use of, any means of
communication by which all directors participating may hear each
other during the meeting (Section 820(2) of the Act).
Section 3.09 Notice of Meetings. Unless the articles of
incorporation, bylaws, or the Act provide otherwise, regular
meetings of the board may be held without notice of the date,
time, place, or purposes of the meeting. Unless the articles of
incorporation or bylaws provide for a longer or shorter period,
special meetings of the board of directors must be preceded by at
two days' notice of the of the date, time, and place of the
meeting. The notice need not describe the purpose of the special
meeting unless required by the articles of incorporation, bylaws,
or the Act. (Section 822 of the Act)
The giving of notice of any meeting, shall be governed by
the rules set forth in Section 103 of the Act.
Section 3.10 Waiver of Notice. Any director may waive notice
of any meeting before or after the date of the meeting, as
provided in Section 823 of the Act. Except as provided in the
next sentence, the waiver must be in writing, signed by the
director entitled to the notice, and delivered to the corporation
for filing with the corporate records (but delivery and filing
are not conditions to its effectiveness). A director's attendance
at or participation in a meeting waives any required notice to
the director of the meeting unless the director at the beginning
of the meeting, or promptly upon the director's arrival, objects
to holding the meeting or transacting business at the meeting
because of lack of notice or defective notice, and does not
thereafter vote for or assent to action taken at the meeting.
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Section 3.11 Quorum and Manner of Acting. As set forth in
Section 824 of the Act, unless the articles of incorporation or
these bylaws establish a different quorum requirement, a quorum
of the board of directors consists of a majority of the number of
directors fixed or prescribed in accordance with these bylaws,
except that if a variable-range board is permitted by these
bylaws and no resolution prescribing the exact number within the
permitted range is in effect, then a quorum consists of a
majority of the number of directors in office immediately before
the meeting. The articles of incorporation or bylaws may
authorize a quorum of the board of directors to consist of no
fewer than one-third of the fixed or prescribed number of
directors. Any adjustment of the then applicable quorum
requirement is subject to the provisions of Section 1022 of the
Act and Section 3.13 of these bylaws.
The affirmative vote of a majority of directors present at a
meeting at which a quorum is present when the vote is taken shall
be the act of the board of directors, unless the articles of
incorporation, bylaws, or the Act require the vote of a greater
vote of directors. Any action to change the percentage of
directors needed to take action is subject to the provisions of
Section 1022 of the Act and Section 3.13 of these bylaws.
As set forth in Section 824(4) of the Act, a director who is
present at a meeting of the board of directors when corporate
action is taken is considered to have assented to the action
taken at the meeting unless:
(i) the director objects at the beginning of the meeting (or
promptly upon arrival) to holding the meeting or transacting
business at the meeting and does not thereafter vote for or
assent to any action taken at the meeting;
(ii) the director contemporaneously requests that such
directors dissent or abstention as to any specific action be
entered into the minutes of the meeting; or
(iii) the director causes written notice of a dissent or
abstention as to any specific action to be received by the
presiding officer of the meeting before adjournment of the
meeting or by the corporation promptly after adjournment of the
meeting. The right of dissent or abstention as to a specific
action is not available to a director who votes in favor of the
action taken.
Section 3.12 Action Without a Meeting. Unless the articles
of incorporation, these bylaws or the Act provide otherwise, any
action required or permitted to be taken by the board of
directors at a meeting may be taken without a meeting if all the
directors consent in writing to the action as permitted by
Section 821 of the Act. Action is considered to have been taken
by such written consents when the last director signs a writing
describing the action taken, unless prior to that time any
director has revoked a consent by a writing signed by the
director and received by an authorized officer of the
corporation. An action so taken is effective at the time it is
taken, unless the board of directors establishes a different
effective date. An action taken by written consent of the
directors as described in this section has the same effect as
action taken at a meeting of directors and may be described as
such in any document.
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Section 3.13 Altering Quorum or Voting Requirements. As
provided in Section 1022 of the Act, a bylaw that fixes a greater
quorum or voting requirement for the board of directors than is
required by the Act may be amended or repealed:
(i) if originally adopted by the shareholders, only by the
shareholders, unless the bylaw specifically provided that it
could be amended by a vote of either the shareholders or the
board of directors; or
(ii) if originally adopted by the board of directors, by the
shareholders or, unless otherwise provided in the articles of
incorporation or bylaws, by the board of directors.
Action by the board of directors to amend or repeal a bylaw
that changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by
the same vote required to take action under the quorum and voting
requirement then in effect or proposed to be adopted, whichever
is greater.
Section 3.14 Compensation. Unless otherwise provided in the
articles of incorporation or these bylaws, the board of directors
may fix the compensation of directors, as permitted by Section
811 of the Act. Pursuant to this authority, the directors may, by
resolution, provide for directors to be paid their expenses, if
any, of attendance at each meeting of the board of directors, and
may be paid a stated salary as director or a fixed sum for
attendance at each meeting of the board of directors or both. No
such payment shall preclude any director from serving the
corporation in any capacity and receiving compensation therefor.
Section 3.15 Committees.
(a) Creation of Committees. Unless the articles of
incorporation or these bylaws provide otherwise, a board of
directors may create one or more committees and appoint members
of the board of directors to serve on them. Each committee must
have one or more members, who serve at the pleasure of the board
of directors (Section 825 of the Act).
(b) Selection of Committee Members. The creation of a
committee and appointment of members to it must be approved by
the greater of:
(i) a majority of all the directors in office when the
action is taken; or
(ii) the number of directors required by the articles of
incorporation or bylaws to take action under Section 824 of the
Act and Section 3.11 (including paragraph 3.11(b)) of these
bylaws.
(c) Required Procedures. Sections 820 and 824 of the Act,
and Sections 3.06 through 3.11 of these bylaws (but not the
special voting and quorum requirements established by paragraph
3.11(b) of these bylaws), which govern meetings, action without
meeting, notice, waiver of notice, and
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quorum and voting requirements of the board of directors, apply
to committees and their members as well. Any resolutions adopted
by the board of directors in connection with the creation of any
committee may establish additional quorum and voting requirements
applicable to such committee, including provisions to ensure
representation of each of the corporation's investor groups at
each meeting of such committee.
(d) Authority. Unless limited by the articles of
incorporation or these bylaws, each committee may exercise those
aspects of the authority of the board of directors (as set forth
in Section 801 of the Act and Section 3.01 of these bylaws) which
the board of directors confers upon such committee in the
resolution creating the committee.
(e) Impact on Duty of Directors. The creation of, delegation
of authority to, or action by a committee does not alone
constitute compliance by a director with the standards of conduct
described in Section 840 of the Act and referenced in Section
3.16 of these bylaws.
Section 3.16 Standards of Conduct. Each director is to
discharge such director's duties as a director, including duties
as a member of a committee, in compliance with the standards of
conduct set forth in Section 840 of the Act and described in
Article V of these bylaws.
Section 3.17 Limitation of Liability. If not already so
provided in the articles of incorporation of this corporation,
the corporation, as provided in Section 841 of the Act, may
eliminate or limit the liability of directors to the corporation
or to its shareholders for monetary damages for any action taken
or any failure to take action as a director, by an amendment to
its articles of incorporation, or by the adoption of a bylaw or
resolution approved by the same percentage of shareholders as
would be required to approve an amendment to the articles of
incorporation to include such provision. No such provision may
eliminate or limit the liability of a director for:
(i) the amount of a financial benefit received by a director
to which the director is not entitled;
(ii) an intentional infliction of harm on the corporation or
the shareholders;
(iii) an unlawful distribution in violation of the standards
set forth in Section 824 of the Act as referenced in Section 3.18
of these bylaws;
(iv) an intentional violation of criminal law; or
(v) liability for any act or omission occurring prior to the
date such a provision becomes effective.
Section 3.18 Liability for Unlawful Distributions. A
director who votes for or assents to a distribution made in
violation of the requirements of Section 640 of the Act or the
articles of incorporation, and who does not discharge such duties
in compliance with the standards of conduct
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set forth in Section 840 of the Act and referenced in Sections
3.16 and 5.01 of these bylaws, is personally liable to the
corporation for the amount by which the distribution exceeds the
amount that could have been properly distributed, as provided in
Section 842 of the Act.
Section 3.19 Conflicting Interest Transactions. Transactions
in which a director has a conflicting interest will be handled in
accordance with Sections 850 to 853 of the Act. In accordance
with such sections, each director's conflicting interest
transaction as defined therein, which has not otherwise been
established to be fair to the corporation, is to be presented to
the shareholders for approval in accordance with Section 853 of
the Act, or approved by the directors in compliance with the
requirements of Section 822 of the Act.
Directors may take action with respect to a director's
conflicting interest transaction by the affirmative vote of a
majority of those "qualified directors" (defined in Section 850
of the Act as essentially those directors without conflicting
interests with respect to the transaction) on the board of
directors or on a duly empowered and constituted committee of the
board who voted on the transaction after receipt of the required
disclosures (as defined in Sections 850 and 852(2) of the Act).
For purposes of such action, a majority of the qualified
directors on the board or on the committee, as the case may be,
constitutes a quorum. Such action is not affected by the presence
or vote of a director who is not a qualified director.
ARTICLE IV
Officers
Section 4.01 Number and Qualifications. The officers
of the corporation shall be a president, a secretary, a
treasurer, each of whom shall be appointed by the board of
directors. The corporation may also have such other officers and
assistant officers as the board of directors in its discretion
may determine, by resolution, to be appropriate, including a
chairman of the board, one or more vice-presidents, a controller,
assistant secretaries and assistant treasurers. All such officers
shall be appointed by the board of directors, except that if
specifically authorized by the board of directors, an officer may
appoint one or more officers or assistant officers (see Section
830 of the Act). The same individual may simultaneously hold more
than one office in the corporation.
Section 4.02 Appointment and Term of Office. The officers of
the corporation shall be appointed by the board of directors (or,
to the extent permitted by Section 4.01 above, by an officer
specifically authorized by the board to make such appointments),
for such terms as may be determined by the board of directors.
Neither the appointment of an officer nor the designation of a
specified term creates or grants to the officer any contract
rights, and the board can remove the officer at any time prior to
the termination of any term for which the officer may have been
appointed. If no other term is specified, officers shall hold
office until they resign, die, or until they are removed or
replaced in the manner provided in Section 4.03 below, or Section
832 of the Act.
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Section 4.03 Removal and Resignation of Officers. Any
officer or agent of the corporation may be removed or replaced by
the board of directors at any time with or without cause, as
permitted by Section 832 of the Act. The Chief Financial Officer
may also be removed by the Chief Executive Officer, or
Co-Chairmen of the Board of Directors. The election of a
replacement officer shall constitute the removal of the person
previously holding such office. An officer may resign at any time
by giving written notice of the resignation to the corporation.
Resignations shall become effective as provided in Section 832 of
the Act. An officer's resignation or removal does not affect the
contract rights of the parties, if any (See Section 833 of the
Act).
Section 4.04 Authority and Duties. The officers of the
corporation shall have the authority and perform the duties
specified below and as may be additionally specified by the
president, the board of directors or these bylaws (and in all
cases where the duties of any officer are not prescribed by the
bylaws or by the board of directors, such officer shall follow
the orders and instructions of the president), except that in any
event each officer shall exercise such powers and perform such
duties as may be required by law:
(a) President. The president shall, subject to the direction
and supervision of the board of directors,
(i) be the chief executive officer of the corporation
and have general and active control of its affairs and
business and general supervision of its officers, agents and
employees; (ii) unless there is a chairman of the board,
preside at all meetings of the shareholders and the board of
directors; (iii) see that all orders and resolutions of the
board of directors are carried into effect; and (iv) perform
all other duties incident to the office of president and as
from time to time may be assigned to the president by the
board of directors. The president may sign, with the
secretary or any other proper officer of the corporation
authorized to take such action, certificates for shares of
the corporation. The president may also sign, subject to
such restrictions and limitations as may be imposed from
time to time by the board of directors, deeds, mortgages,
bonds, contracts or other instruments which have been duly
approved for execution.
(b) Vice-Presidents. The vice-president, if any (or if there
is more than one then each vice-president), shall assist the
president and shall perform such duties as may be assigned by the
president or by the board of directors. The vice-president, if
there is one (or if there is more than one then the
vice-president designated by the board of directors, or if there
be no such designation then the vice-presidents in order of their
election), shall, at the request of the president, or in the
event of the president's absence or inability or refusal to act,
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. Any vice-president may sign, with the secretary or an
assistant secretary, certificates for shares of the corporation
the issuance of which have been authorized by resolution of the
board of directors. Vice-presidents shall perform such other
duties as from time to time may be assigned to them by the
president or by the board of directors. Assistant
vice-presidents, if any, shall have such powers and perform such
duties as may be assigned to them by the president or by the
board of directors.
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(c) Secretary. The secretary shall: (i) have responsibility
for the preparation and maintenance of minutes of the proceedings
of the shareholders and of the board of directors; (ii) have
responsibility for the preparation and maintenance of the other
records and information required to be kept by the corporation
under Section 1601 of the Act and Section 2.17 of these bylaws;
(iii) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by the Act or other
applicable law; (iv) be custodian of the corporate records and of
any seal of the corporation; (v) when requested or required,
authenticate any records of the corporation; (vi) keep a register
of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder; (vii) sign with
the president, or a vice-president, certificates for shares of
the corporation, the issuance of which shall have been authorized
by resolution of the board of directors; (viii) have general
charge of the stock transfer books of the corporation, unless the
corporation has a transfer agent; and (ix) in general perform all
duties incident to the office of secretary, including those
identified in the Act, and such other duties as from time to time
may be assigned to the secretary by the president or the board of
directors. Assistant secretaries, if any, shall have the same
duties and powers, subject to supervision by the secretary.
(d) Treasurer. The treasurer shall: (i) be the principal
financial officer of the corporation and have responsibility for
the care and custody of all its funds, securities, evidences of
indebtedness and other personal property and deposit and handle
the same in accordance with instructions of the board of
directors; (ii) receive and give receipts and acquittances for
moneys paid in on account of the corporation, and pay out of
funds on hand all bills, payrolls and other just debts of the
corporation of whatever nature upon maturity; (iii) unless there
is a controller, be the principal accounting officer of the
corporation and as such prescribe and maintain the methods and
systems of accounting to be followed, keep complete books and
records of account, prepare and file all local, state and federal
tax returns, prescribe and maintain an adequate system of
internal audit and prepare and furnish to the president and the
board of directors statements of account showing the financial
position of the corporation and the results of its operations;
(iv) upon request of the board, make such reports to it as may be
required at any time; and (v) perform all other duties incident
to the office of treasurer and such other duties as from time to
time may be assigned by the board of directors or the president.
Assistant treasurers, if any, shall have the same powers and
duties, subject to supervision by the treasurer.
Section 4.05 Surety Bonds. The board of directors may
require any officer or agent of the corporation to provide to the
corporation a bond, in such sums and with such sureties as may be
satisfactory to the board, conditioned upon the faithful
performance of such individual's duties and for the restoration
to the corporation of all books, papers, vouchers, money,
securities and other property of whatever kind in such officer's
possession or under such officer's control belonging to the
corporation.
Section 4.06 Compensation. Officers shall receive such
compensation for their services as may be authorized or ratified
by the board of directors (by a vote meeting the requirements of
paragraph 3.11(b) above) and no officer shall be prevented from
receiving compensation by reason
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of the fact that such officer is also a director of the
corporation. Appointment as an officer shall not of itself create
a contract or other right to compensation for services performed
as such officer.
ARTICLE V
Standards of Conduct for Officers and Directors
Section 5.01 Standards of Conduct. As provided in Section
840 of the Act, each director is required to discharge his or her
duties as a director, including duties as a member of a
committee, and each officer with discretionary authority is
required to discharge his or her duties under that authority, in
a manner consistent with the following standards of conduct:
(i) in good faith;
(ii) with the care an ordinarily prudent person in a like
position would exercise under similar circumstances; and
(iii) in a manner the director or officer reasonably
believes is in the best interests of the corporation.
Section 5.02 Reliance on Information and Reports. In
discharging his or her duties, a director or officer is entitled
to rely on information, opinions, reports, or statements,
including financial statements and other financial data, if
prepared or presented by:
(i) one or more officers or employees of the corporation
whom the director or officer reasonably believes to be reliable
and competent in the matters presented;
(ii) legal counsel, public accountants, or other persons as
to matters the director or officer reasonably believes are within
the person's professional or expert competence; or
(iii) in the case of a director, a committee of the board of
directors of which such director is not a member, if the director
reasonably believes the committee merits confidence.
A director or officer is not acting in good faith in relying
on any such information, opinions, reports or statements if such
director or officer has knowledge concerning the matter in
question that makes reliance otherwise permitted as set forth
above unwarranted.
Section 5.03 Limitation on Liability. A director or officer
is not liable for any action taken, or any failure to take any
action as an officer or director, as the case may be, if the
duties of the office have been performed in compliance with the
provisions of this Article 5, and Section 840 of the Act.
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ARTICLE VI
Indemnification
Section 6.01 Indemnification of Directors.
(a) Permitted Indemnification. Pursuant to Section 902 of
the Act, unless otherwise provided in the articles of
incorporation as permitted by Section 909 of the Act, the
corporation may indemnify any individual made a party to a
proceeding because such individual is or was a director of the
corporation, against liability incurred in the proceeding if the
corporation has authorized the payment in accordance with Section
906 of the Act and a determination has been made in accordance
with the procedures set forth in Section 906(2) of the Act that
the director has met the applicable standards of conduct as set
forth below and in Section 902 of the Act:
(i) the individual's conduct was in good faith; and
(ii) the individual reasonably believed that his or her
conduct was in, or not opposed to, the corporation's best
interests; and
(iii) in the case of any criminal proceeding, the individual
had no reasonable cause to believe his or her conduct was
unlawful.
(b) Limitation on Permitted Indemnification. As provided in
Section 902(4) of the Act, the corporation shall not indemnify a
director under Section 6.01(a) above:
(i) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation; or
(ii) in connection with any other proceeding charging that
the director derived an improper personal benefit, whether or not
involving action in the director's official capacity, in which
proceeding the director was adjudged liable on the basis that the
director derived an improper personal benefit.
(c) Indemnification in Derivative Actions Limited.
Indemnification permitted under Section 6.01(a) and Section 902
of the Act in connection with a proceeding by or in the right of
the corporation is limited to reasonable expenses incurred in
connection with the proceeding.
(d) Mandatory Indemnification. As set forth in Section 903
of the Act, unless limited by its articles of incorporation, a
corporation shall indemnify a director who was successful, on the
merits or otherwise, in the defense of any proceeding, or in the
defense of any claim, issue, or matter in the proceeding, to
which the director was a party because the director is or was a
director of the
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corporation, against reasonable expenses incurred by the director
in connection with the proceeding or claim with respect to which
the director has been successful.
Section 6.02 Advance Expenses for Directors. Pursuant to the
provisions of Section 904 of the Act, if a determination is made,
following the procedures of Section 906(b) of the Act, that a
director has met the following requirements; and if an
authorization of payment is made, following the procedures and
standards set forth in Section 906 of the Act, then unless
otherwise provided in the articles of incorporation, the
corporation may pay for or reimburse the reasonable expenses
incurred by a director who is a party to a proceeding in advance
of final disposition of the proceeding, if:
(i) the director furnishes the corporation a written
affirmation of the director's good faith belief that the director
has met the applicable standard of conduct described in Section
5.01 of these bylaws and Section 902 of the Act;
(ii) the director furnishes to the corporation a written
undertaking, executed personally or on such director's behalf, to
repay the advance if it is ultimately determined that the
director did not meet the standard of conduct; and
(iii) a determination is made that the facts then known to
those making the determination would not preclude indemnification
under Sections 901 through 909 of the Act.
Section 6.03 Indemnification of Officers. Employees.
Fiduciaries. and Agents. Unless otherwise provided in the
articles of incorporation, and pursuant to Section 907 of the
Act:
(i) an officer of the corporation is entitled to mandatory
indemnification under Section 903 of the Act, and is entitled to
apply for court-ordered indemnification under Section 905 of the
Act, in each case to the same extent as a director;
(ii) the corporation may indemnify and advance expenses to
an officer, employee, fiduciary, or agent of the corporation to
the same extent as to a director; and
(iii) the corporation may also indemnify and advance
expenses to an officer, employee, fiduciary, or agent who is not
a director to a greater extent, if not inconsistent with public
policy, and if provided for by its articles of incorporation,
these bylaws, action of the board of directors, or contract.
Section 6.04 Insurance. As provided in Section 908 of the
Act, the corporation may purchase and maintain liability
insurance on behalf of a person who is or was a director,
Officer, employee, fiduciary, or agent of the corporation, or
who, while serving as a director, officer, employee, fiduciary,
or agent of the corporation, is or was serving at the request of
the corporation as a director, officer, partner, trustee,
employee, fiduciary, or agent of another foreign or domestic
corporation or other person, or of an employee benefit plan,
against liability asserted against or incurred by such
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person in that capacity or arising from such person's status as a
director, officer, employee, fiduciary, or agent, whether or not
the corporation would have power to indemnify such person against
the same liability under Article VI of these bylaws or Sections
902, 903 or 907 of the Act. Insurance may be procured from any
insurance company designated by the board of directors, whether
the insurance company is formed under the laws of this state or
any other jurisdiction, including any insurance company in which
the corporation has an equity or any other interest through stock
ownership or otherwise.
Section 6.05 Scope of Indemnification. The indemnification
and advancement of expenses authorized by this Article VI is
intended to permit the corporation to indemnify to the fullest
extent permitted by the laws of the State of Utah any and all
persons whom it shall have power to indemnify under such laws
from and against any and all of the expenses, disabilities, or
other matters referred to in or covered by such laws. Any
indemnification or advancement of expenses hereunder, unless
otherwise provided when the indemnification or advancement of
expenses is authorized or ratified, is intended to be applicable
to acts or omissions that occurred prior to the adoption of this
Article, shall continue as to any party during the period such
party serves in any one or more of the capacities covered by this
Article, shall continue thereafter so long as the party may be
subject to any possible proceeding by reason of the fact that
such party served in any one or more of the capacities covered by
this Article, and shall inure to the benefit of the estate and
personal representatives of such person. Any repeal or
modification of this Article or of any Section or provision
hereof shall not affect any right or obligations then existing.
All rights to indemnification under this Article shall be deemed
to be provided by a contract between the corporation and each
party covered hereby.
Section 6.06 Other Rights and Remedies. The rights to
indemnification and advancement of expenses provided in this
Article VI shall be in addition to any other rights which a party
may have or hereafter acquire under any applicable law, contract,
order, or otherwise.
Section 6.07 Severability. If any provision of this Article
shall be held to be invalid, illegal or unenforceable for any
reason, the remaining provisions of this Article shall not be
affected or impaired thereby, but shall, to the fullest extent
possible, be construed so as to give effect to the intent of this
Article that each party covered hereby is entitled to the fullest
protection permitted by law.
ARTICLE VII
Stock
Section 7.01 Issuance of Shares. Except to the extent any
such powers may be reserved to the shareholders by the articles
of incorporation, as provided in section 621 of the Act the board
of directors may authorize the issuance of shares for
consideration consisting of any tangible or intangible property
or benefit to the corporation, including cash, promissory notes,
services performed, contracts or arrangements for services to be
performed, or other securities of the corporation. The terms and
conditions of any tangible or intangible property or benefit to
be
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provided in the future to the corporation, including contracts or
arrangements for services to be performed, are to be set forth in
writing.
Before the corporation issues shares, the board of directors
must determine that the consideration received or to be received
for the shares to be issued is adequate.
The board of directors may authorize a committee of the
board of directors, or an officer of the corporation, to
authorize or approve the issuance or sale, or contract for sale
of shares, within limits specifically prescribed by the board of
directors.
Section 7.02 Certificates for Shares; Shares Without
Certificates.
(a) Use of Certificates. As provided in Section 625 of the
Act, shares of the corporation may, but need not be, represented
by certificates. Unless the Act or another applicable statute
expressly provides otherwise, the rights and obligations of
shareholders are not affected by whether or not their shares are
represented by certificates.
(b) Content of Certificates. Certificates representing
shares of the corporation must, at a minimum, state on their
face:
(i) the name of the corporation, and that it is organized
under the laws of Utah;
(ii) the name of the person to whom the certificate is
issued; and
(iii) the number and class of shares and the designation of
the series, if any, the certificate represents.
If the corporation is authorized to issue different classes
of shares or different series within a class, the designations,
preferences, limitations, and relative rights applicable to each
class, the variations in preferences, limitations, and relative
rights determined for each series, and the authority of the board
of directors to determine variations for any existing or future
class or series, must be summarized on the front or back of each
certificate. Alternatively, each certificate may state
conspicuously on its front or back that the corporation will
furnish the shareholder such information on request in writing
and without charge.
Each share certificate must be signed (either manually or by
facsimile) by the president or a vice-president and by the
secretary or an assistant secretary, or by any two other officers
as may be designated in these bylaws or by the board of
directors. Each certificate for shares is to be consecutively
numbered or otherwise identified.
(c) Shares Without Certificates. As provided in Section 626
of the Act, unless the articles of incorporation or these bylaws
provide otherwise, the board of directors may authorize the
issuance of some or all of the shares of any or all of its
classes or series without certificates. Such an
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authorization will not affect shares already represented by
certificates until they are surrendered to the corporation.
Within a reasonable time after the issuance or transfer of
shares without certificates, the corporation shall send the
shareholder a written statement of the information required on
certificates by Subsections 625(2) and (3) of the Act, as
summarized in Section 7.02(b) above.
(d) Shareholder List. The corporation shall maintain a
record of the names and addresses of the persons to whom shares
are issued, in a form meeting the requirements of Section 1601(3)
of the Act.
(e) Transferring Certificate Shares. All certificates
surrendered to the corporation for transfer shall be canceled and
no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed, or mutilated
certificate a new one may be issued therefor upon such terms and
indemnity to the corporation as the board of directors may
prescribe.
(f) Registration of the Transfer of Shares. Registration of
the transfer of shares of the corporation shall be made only on
the stock transfer books of the corporation. In order to register
a transfer, the record owner shall surrender the shares to the
corporation for cancellation, properly endorsed by the
appropriate person or persons with reasonable assurances that the
endorsements are genuine and effective. Unless the corporation
has established a procedure by which a beneficial owner of shares
held by a nominee is to be recognized by the corporation as the
owner, the person in whose name shares stand on the books of the
corporation shall be deemed by the corporation to be the owner
thereof for all purposes.
Section 7.03 Restrictions on Transfer of Shares Permitted.
As contemplated by Section 627 of the Act, the articles of
incorporation, these bylaws, an agreement among shareholders, or
and agreement between one or more shareholders and the
corporation may impose restrictions on the transfer or
registration of transfer of shares of the corporation. A
restriction does not affect shares issued before the restriction
was adopted unless the holders of the shares are parties to the
restriction agreement or voted in favor of the restriction or
otherwise consented to the restriction.
A restriction on the transfer or registration of transfer of
shares may be authorized for any of the purposes set forth in
Section 627(3) of the Act. A restriction on the transfer or
registration of transfer of shares is valid and enforceable
against the holder or a transferee of the holder if the
restriction is authorized by this section and its existence is
noted conspicuously on the front or back of the certificate, or
is contained in the information statement required by Section
7.02(c) of these bylaws with regard to shares issued without
certificates. Unless so noted, a restriction is not enforceable
against a person without knowledge of the restriction.
Section 7.04 Acquisition of Shares by the Corporation.
Subject to the limitations on distributions set forth in Section
640 of the Act and any other restrictions imposed by applicable
law,
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the corporation may acquire its own shares, as authorized by
Section 631 of the Act, and shares so acquired constitute
authorized but unissued shares.
If the articles of incorporation prohibit the reissuance of
acquired shares, the number of authorized shares is reduced by
the number of shares acquired by the corporation, effective upon
amendment of the articles of incorporation, which amendment may
be adopted by the board of directors without shareholder action,
as provided in Sections 632(b) and 1002 of the Act. Articles of
amendment affecting such an amendment must meet the requirements
of Section 631(3) of the Act.
ARTICLE VIII
Amendments to Bylaws
Section 8.01 Authority to Amend. As provided in Section 1020
of the Act, and subject to the provisions of Sections 2.08 and
3.11(b) of these bylaws, the corporation's board of directors may
amend these bylaws at any time, except to the extent that the
articles of incorporation, these bylaws, or the Act reserve such
power exclusively to the shareholders, in whole or part. The
directors may not adopt, amend or repeal a bylaw that fixes a
greater quorum or voting requirement for shareholders. Any such
bylaw may be adopted, amended or repealed only by the
shareholders as provided in Section 8.02 below.
The corporation's shareholders may amend these bylaws at any
time, subject to any limitations set forth in the Act, the
Articles of Incorporation or these bylaws.
Section 8.02 Bylaw Changing Quorum or Voting Requirement for
Shareholders. If and to the extent authorized by the articles of
incorporation, the shareholders may adopt, amend, or repeal a
bylaw that fixes a greater quorum or voting requirement for
shareholders, or voting groups of shareholders, than is required
by the Act. Such action is subject to the provisions of Part 7 of
the Act and Section 2.08 of these bylaws.
Section 8.03 Bylaw Changing Quorum or Voting Requirement for
Directors.
(a) Amendment. A bylaw that fixes a greater quorum or voting
requirements for the board of directors than is required by the
Act may be amended or repealed as permitted by Section 1022 of
the Act and Section 3.13 of these bylaws:
(i) if originally adopted by the shareholders, only by the
shareholders, unless otherwise permitted as contemplated by
Subsection (b) below; or
(ii) if originally adopted by the board of directors, by the
shareholders or unless otherwise provided in the articles of
incorporation or these bylaws, by the board of directors.
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(b) Restriction on Amendment. A bylaw adopted or amended by
the shareholders that fixes a greater quorum or voting
requirement for the board of directors may provide that it may be
amended or repealed only by a specified vote of either the
shareholders or the board of directors.
(c) Required Vote to Amend. Action by the board of directors
under Subsection (a)(ii) above to amend or repeal a bylaw that
changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by
the same vote required to take action under the quorum and voting
requirement then in effect or proposed to be adopted, whichever
is greater.
ARTICLE IX
Miscellaneous
Section 9.01 Corporate Seal. The board of directors may
provide for a corporate seal, to be in such a form as the
directors may determine to be appropriate, and any officer of the
corporation may, when and as required or as determined to be
appropriate, affix or impress the seal, or a facsimile thereof,
to or on any instrument or document of the corporation.
Section 9.02 Fiscal Year. The fiscal year of the corporation
shall be December 31.
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CERTIFICATE OF ADOPTION OF BYLAWS
OF
CYBERCENTERS INTERNATIONAL, INC.
The undersigned hereby certifies that he is the duly
appointed and acting Secretary of CYBERCENTERS INTERNATIONAL,
Inc. and that the foregoing bylaws, comprising twenty-six (26)
pages, were approved and adopted by a vote of the shareholders of
the corporation on ____________, 1999, with the bylaws becoming
effective as of____________, 1999, and a record of such action is
maintained in the minute book of the corporation.
Executed effective as of the ______ day of____________, 1999.
________________________________
Secretary
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