EXHIBIT 3
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BY-LAWS
of
AGWAY INC.
As Amended to April 26, 2000
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GENERAL
1.1 Certificate of Incorporation - The certificate of
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incorporation of the corporation is hereby made a part of these by-laws and all
matters hereinafter contained in these by-laws shall be subject to such
provisions in regard thereto, if any, as are set forth in the certificate of
incorporation. All references in these by-laws to the certificate of
incorporation shall be construed to mean the certificate of incorporation as
from time to time amended. The name and purposes of the corporation shall
be as set forth in the certificate of incorporation.
1.2 Definitions - As used in these by-laws, the following
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terms have the following meanings:
(a) "Person" means any individual, partnership,
firm, corporation, association, or any other form of
business organization.
(b) "Farmer" means any person who produces
agricultural products for sale.
(c) "Member" means any person meeting the
qualifications specified in section 2.1 of these by-laws;
and for purposes of sections 9.1-9.4 of these by-laws, also
includes any contract patron.
(d) "Contract Patron" means any person who is a
party to a contract with the corporation providing for the
payment of patronage refunds authorized by section 9.6 of
these by-laws.
MEMBERSHIP
2.1 Members - The following persons shall be members of
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the corporation:
(a) Any farmer or cooperative organization of
farmers which:
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(1) is a record holder of one share of $25
par value membership common stock of this
corporation, and
(2) has purchased farm supplies or farm
services or has marketed farm products through
this corporation since the beginning of the
preceding fiscal year of the corporation.
A cooperative organization of farmers, which acts only as a
dealer of the corporation in the distribution of farm supplies, shall not
thereby be qualified for membership.
2.2 Non-Members - All persons or organizations, not
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qualified for membership under section 2.1 of these by-laws, who shall purchase
from or market through the corporation shall be non-members of the corporation,
and, except in the case of contract patrons, shall not be entitled to share in
refunds based on their patronage.
2.3 Privileges of Membership - Each member shall have the
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following rights and privileges:
(a) As a stockholder, to participate in and vote at
meetings of stockholders as provided in section 2.4 of
these by-laws.
(b) To participate in patronage refunds as provided
in sections 9.1-9.5 of these by-laws.
(c) To attend and participate in local membership
meetings, and to participate in the selection of member
committees or committeemen.
(d) To be eligible to serve on local member
committees or on the Agway council or on the board of
directors of this corporation.
2.4 Voting -
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(a) All voting rights shall be vested in the $25
par value membership common stock of the corporation, the
record holder of which shall be entitled to only one vote
to be cast by the holder thereof in person, or by proxy, at
any meeting of stockholders; each holder of membership
common stock shall be entitled to only one vote regardless
of the number of shares held.
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(b) Except as otherwise provided by the laws of
Delaware, the certificate of incorporation or these
by-laws, all actions taken at a meeting of stockholders
shall be determined by a majority vote at a meeting at
which a quorum is present.
2.5 Representative of a Member or Stockholder - If any
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member or stockholder is other than a natural person, such member or stockholder
may be represented by any officer thereof or by any other individual duly
authorized by a writing executed and filed with the secretary of the
corporation.
2.6 Non-Transferability of Membership - No membership
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shall be assigned or transferred either voluntarily or involuntarily or by
operation of law.
2.7 Termination of Membership - A membership shall be
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terminated:
(a) By transfer or the tender for purchase by the
corporation by a member of his share of $25 par value
membership common stock of the corporation, such
termination to be effective upon the recording of such
transfer or purchase upon the stock records of the
corporation.
(b) By the call for redemption by the corporation
of the member's share of $25 par value membership common
stock of the corporation because the person has ceased to
be a member of the corporation as defined in section 2.1 of
these by-laws.
(c) By the call for redemption by the corporation
of the member's share of $25 par value membership common
stock of the corporation because such redemption is
necessary to maintain the status of the corporation as an
agricultural cooperative under applicable law.
2.8 Member Committees - Members shall be eligible to
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attend meetings at which those members doing business with the corporation and
residing within a geographical area shall select a member committee from among
their own number. Member committees shall select a chairman, vice chairman, and
secretary, and shall keep minutes of their meetings and actions taken. Each
member committee so chosen shall function with respect to nomination procedures
as specified in section 5.3 of these by-laws, and shall act in an advisory
capacity in representing members in their relationships with this corporation,
its subsidiaries and qualified agencies.
2.9 Membership Common Stock -The ownership of membership
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common stock of the corporation is limited to one share per holder.
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CAPITAL STOCK AND PATRONS' INTERESTS
3.1 Capital Stock - The amount of the authorized capital
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stock and the par value of the shares shall be as fixed in the certificate of
incorporation. The issuance of any shares of capital stock of any class shall be
authorized by the board of directors by resolution fixing the consideration for
such issue.
3.2 Certificates of Stock -Certificates of stock will be
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signed in the name of the corporation by the president or a vice-president and
the treasurer or an assistant treasurer or the secretary or an assistant
secretary. Such signatures may be facsimile. Certificates shall be numbered and
registered in the order in which they are issued and the seal of the corporation
shall be affixed thereto.
Notwithstanding anything to the contrary in this
section 3.2 of these by-laws, certificates of stock shall be in such form
as shall, in conformity to law, be prescribed from time to time by the board of
directors.
3.3 Loss of Certificate - In case of the alleged loss or
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destruction or of the mutilation of a certificate of stock, a duplicate
certificate may be issued in place thereof, upon such terms in conformity
with law as the board of directors may prescribe. The corporation may issue a
new certificate of stock in the place of any certificate theretofore issued by
it, alleged to have been lost, stolen or destroyed, and the corporation may,
in its discretion and as a condition precedent to the issuance thereof,
require the owner of the lost, stolen or destroyed certificate, or his legal
representative, to give the corporation (i) an affidavit (in form and
substance satisfactory to the corporation) describing the loss, theft or
destruction of any such certificate, and/or (ii) a bond sufficient to indemnify
it against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of such new
certificate.
3.4 Transfer of Shares of Stock - Shares of stock of the
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corporation shall be transferable only on the books of the corporation by
assignment in writing by the owner thereof, his attorney legally constituted,
or his legal representatives, upon surrender and cancellation of the
certificates therefor and, in the case of common stock, only with the written
consent of the corporation, endorsed on the certificate of stock. Shares of
common stock may not be transferred except absolutely. The corporation and its
transfer agents and registrars, if any, shall be entitled to treat the holder
of record of any share or shares of stock as the absolute owner thereof for all
purposes except as otherwise expressly provided by the laws of the State of
Delaware.
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3.5 Redemption or Purchase of Shares of Stock - Whenever
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any stock is called by the corporation for redemption, or whenever any $25
par value membership common stock held by a person who has ceased to be a
member is presented by the holder for sale to the corporation, the
certificates representing such stock duly endorsed for transfer and bearing any
appropriate transfer stamps shall be delivered at the principal office of the
corporation or at such bank or trust company as may be specified in the
call by the corporation. Payment for any stock so delivered shall be made by the
corporation promptly after such delivery. After call duly made in accordance
with the foregoing provisions (unless such stock shall have been duly
delivered as required by such call and the corporation shall have failed to
make payment therefor within one week after such delivery), the stock covered
by such call shall be deemed to have been purchased by the corporation on the
date fixed by the call for redemption and the holder thereof shall not
thereafter be entitled to vote in respect to such stock, or otherwise to enjoy
any of the privileges and benefits of ownership thereof, but only to receive,
after delivery of the certificates therefor, payment for such stock as
hereinbefore provided.
3.6 Record Date - The board of directors may fix in
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advance a date not exceeding sixty (60) nor less than ten (10) days preceding
the date of any meeting of the stockholders, or not exceeding sixty (60) days
preceding the date for payment of any dividend, as a record date for the
determination of the stockholders entitled to notice of, and to vote at any such
meeting or entitled to receive a payment of any such dividend; and in such case
such stockholders and only such stockholders as shall be stockholders of record
on the date so fixed shall be entitled to such notice of, and to vote at such
meeting, or to receive payment of such dividend, notwithstanding any transfer
of any stock on the books of the corporation after such record date so fixed.
3.7 Rights, Limitations and Priorities of Patrons'
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Interest -
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(a) Revolving Fund Certificates - Revolving fund
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certificates issued by any predecessor corporation in lieu
of cash patronage refunds, or by this corporation in
exchange for such certificates issued by a predecessor
corporation, shall be redeemed at face amount, fully or pro
rata, in the order of issuance by year if and when the
board of directors in its sole discretion considers the
funds represented thereby no longer necessary for corporate
purposes. In the event of dissolution, such certificates
shall be retired in full or on a pro rata basis. No
interest shall be paid on revolving fund certificates.
(b) Retained Margins and Patrons' Equities -
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Retained margins (any net margin retained by the
corporation or any predecessor and apportioned to patrons
on the books of the corporation or of predecessor
corporations, but not allocated to patrons in the form of
any written notice) and patrons' equities (retained net
margin of the corporation or
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any predecessor allocated to patrons in the form of a
written notice other than a revolving fund certificate)
constitute the residual equity of the corporation which,
subject to reduction by losses, shall be held for the
benefit of patrons, past as well as present, having an
interest therein pursuant to the provisions of these
by-laws or the by-laws of any predecessor corporation.
Retained margins and patrons' equities entitle the holders
thereof to the same rights and privileges, and neither
shall enjoy any preference over the other. No person shall
be entitled to any distribution of assets with respect of
retained margins or patrons' equities prior to the
dissolution of the corporation. In the event of
dissolution, after payment in full of all debts and of any
amounts to which the holders of preferred stock, revolving
fund certificates and common stock shall be entitled
pursuant to the provisions of these by-laws, the remaining
assets of the corporation shall be distributed
proportionately among those persons having interests in
retained margins and patrons' equities and in accordance
with such interests as reflected on the books of the
corporation and predecessor corporations.
3.8 6% Cumulative Preferred Stock, Series A - Agway, Inc.
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6% Cumulative Preferred Stock, Series A, issued in connection with the merger
of Agway local store corporations into Agway, Inc. after September 22, 1992 will
not be subject to transfer until July 1, 1997 and thereafter.
MEETINGS OF STOCKHOLDERS
4.1 Annual Meeting - A regular annual meeting of
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stockholders shall be held in the City of Syracuse, State of New York, on the
first Wednesday of the month of December, or on such other date and at such
other place as may be designated by resolution of the board of directors.
4.2 Notice of Annual Meeting - Notice of the time and
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place of the annual meeting shall be given all stockholders entitled to vote
not less than ten (10) days nor more than sixty (60) days before the time of
such meeting.
4.3 Special Meeting - A special meeting of stockholders
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may be called at any time by the chairman, or in his absence by the vice-
chairman, or by a majority of the directors or by one percent of the membership
by petition in writing. Only such business may be transacted as is specified in
the notice of the special meeting.
4.4 Notice of Special Meetings - Notice of special
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meetings shall be given in the same manner as for the annual meeting and in
addition shall state the purpose for which the meeting is called.
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4.5 Adjournment and Notice - Any meeting may be adjourned
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because of the absence of a quorum or for any other reason. If the adjournment
is for less than thirty (30) days, no new notice need be given if the time and
place of the adjourned meeting is announced at the time of adjournment. If the
adjournment is more than thirty (30) days, notice shall be given as required for
the original meeting.
4.6 List of Stockholders - A complete list of the
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stockholders entitled to vote at any election of directors, arranged in
alphabetical order, and showing the address of each stockholder and stating that
each stockholder owns one share shall be prepared at least ten (10) days before
such election by the officer in charge of the stock ledger of the corporation.
Such list shall be open to the examination of any stockholder during ordinary
business hours, for a period of at least ten (10) days prior to the election,
at a place within the city where the election is to be held, which place shall
be specified in the notice of the meeting, and such list shall be produced and
kept at the time and place of election during the whole time thereof, and
subject to the inspection of any stockholder who may be present.
4.7 Quorum - The presence in person at any meeting of
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stockholders of the greater of (i) 100 persons each holding a share of $25
par value membership common stock, or (ii) the minimum number of stockholders
required under applicable law to establish a quorum, shall constitute a quorum
for the transaction of business. The stockholders present at a duly called and
held meeting at which a quorum is present may continue to do business until
adjournment notwithstanding withdrawal of stockholders.
4.8 Inspectors of Election - There shall be elected each
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year one Inspector of Election from each of the districts holding
nominating meetings for the election of directors. Said Inspectors shall serve
at the annual meeting of the corpora tion following said nominating meetings.
The election of each of the Inspectors of Election shall be by a majority of the
votes cast at each of said nominating meetings, and the weighted-vote procedure
set forth in section 5.3 of these by-laws shall obtain with respect to the
election of said Inspectors of Election. Nominations for Inspector of Election
shall be made from the floor at said nominating meetings.
If less than two of the Inspectors of Election elected
pursuant to the provisions of the above paragraph are present at the annual
meeting for which they are elected, the Chairman shall appoint one or two
members, as required, to serve as Inspectors of Election at said annual meeting
so that there shall be at least two members serving as Inspectors of Election at
each annual meeting.
4.9 Notice of Stockholder Business - At an annual meeting
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of the stockholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto)
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given by or at the direction of the board of directors, (b) otherwise properly
brought before the meeting by or at the direction of the board of directors, or
(c) otherwise properly be requested to be brought before the meeting by a
stockholder. For business to be properly requested to be brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation not less than ninety (90) days
prior to the meeting; provided, however, that in the event that the date of the
meeting is not publicly announced by the corporation by mail, press release or
otherwise more than ninety (90) days prior to the meeting, notice by the
stockholder to be timely must be delivered to the secretary of the corporation
not later than the close of business on the tenth day following the day on which
such announcement of the date of the meeting was communicated to stockholders. A
stockholder's notice to the secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the corporation which are
beneficially owned by the stockholder, and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the by-laws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in section 4.9 of these by-laws. The
chairman of an annual meeting shall, if the facts warrant, determine and declare
to the meeting that business was not properly brought before the meeting and in
accordance with the provisions of section 4.9 of these by-laws, and if he should
so determine, he shall so declare to the meeting and any such business not
properly brought before the meeting shall not be transacted.
4.10 Director Nominations - Nominations for the election
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of directors may be made by the board of directors or a committee appointed
by the board of directors or by any stockholder entitled to vote in the election
of directors generally or by the secretary of the corporation pursuant to
section 5.3 of these by-laws. However, any stockholder entitled to vote in the
election of directors generally may nominate one or more persons for election as
directors at a meeting only if written notice of such stockholder's intent to
make such nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the secretary of the corporation
not later than (i) with respect to an election to be held at an annual meeting
of stockholders, ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting, and (ii) with respect to an election to be
held at a special meeting of stockholders for the election of directors, the
close of business on the tenth day following the date on which notice of such
meeting is first given to stockholders. Each such notice shall set forth: (a)
the name and address of the stockholder who intends to make the nomination and
of the person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock
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of the corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified in
the notice; (c) a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the stockholder; (d) such other information regarding each nominee proposed by
such stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission; and (e)
the consent of each nominee to serve as a director of the corporation if so
elected. The chairman of the meeting may refuse to acknowledge the nomination of
a person not made in compliance with the foregoing procedure.
4.11 Order of Business - Unless otherwise determined by
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the board of directors prior to the meeting, the chairman of the
stockholders' meeting shall determine the order of business and shall have the
authority in his discretion to regulate the conduct of any such meeting,
including, without limitation, by imposing restrictions on the persons (other
than stockholders of the corporation or their duly appointed proxies) who may
attend any such stockholders' meeting based upon any determination by the
chairman, in his sole discretion, that any such person has unduly disrupted or
is likely to disrupt the proceedings thereat, and the circumstances in which any
person may make a statement or ask questions at any stockholders' meeting.
DIRECTORS
5.1 Number and Qualification - The board of directors
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shall consist of fifteen (15) members. Directors shall be members of the
corporation, except that members who are employees or dealers of the corporation
shall not be eligible for election as directors.
5.2 Nomination Districts - The territory in which the
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corporation operates shall be divided into nomination districts, fifteen (15)
in number, described as follows:
District 1. State of New York, counties of
Cattaraugus (except for southeast section),
Chautauqua, Erie, Genesee, Niagara, Orleans and
Wyoming and Towns of Clarkson, Gates, Greece,
Hamlin, Ogden, Parma and Sweden located in the
county of Monroe; Commonwealth of Pennsylvania,
northeast corner of the county of Erie and the
northern section of county of Warren.
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District 2. State of New York, counties of
Allegany, Cattaraugus (southeast section),
Chemung, Livingston, Monroe (except for the Towns
of Clarkson, Gates, Greece, Hamlin, Ogden, Parma
and Sweden), Ontario, Schuyler, Seneca (except
for southern section), Steuben, Wayne and Yates;
Commonwealth of Pennsylvania, counties of McKean
and Potter.
District 3. State of New York, counties of
Broome, Cayuga, Chenango (except for northwest
section), Cortland, (except for northeast
section), Delaware (western half), Onondaga
(southern half), Seneca (southern section),
Tompkins and the Town of Gilbertsville located in
the county of Otsego.
District 4. State of New York, counties of
Chenango (northwest section), Cortland (northeast
section), Delaware (eastern half), Herkimer
(southern half), Madison, Oneida, Onondaga
(except for the southern half), Oswego and Otsego
(except for the Town of Gilbertsville).
District 5. State of New York, counties of
Clinton, Essex, Franklin, Hamilton (northern
half), Herkimer (northern half), Jefferson, Lewis
and St. Lawrence.
District 6. State of New York, counties of
Albany, Fulton, Greene, Hamilton (southern half),
Montgomery, Rensselaer, Saratoga, Schenectady,
Schoharie, Warren and Washington; State of
Vermont, counties of Addison, Chittenden,
Franklin, Grand Isle, Lamoille, Rutland and
Washington.
District 7. Commonwealth of Pennsylvania,
counties of Berks, Carbon, Columbia, Dauphin,
Lehigh, Lancaster, Lebanon, Luzerne (southern
section), Lycoming Monroe (southern half),
Montour, Northampton, Northumberland, Schuylkill,
Snyder, and Union.
District 8. Commonwealth of Pennsylvania,
counties of Adams, Centre, Clinton, Cumberland,
Franklin, Juniata, Mifflin, Perry and York; State
of Maryland, counties of Baltimore, Carroll,
Frederick, Harford and Washington.
District 9. States of Maine and New Hampshire;
State of Vermont, counties of Bennington,
Caledonia, Essex, Orange, Orleans, Windham and
Windsor.
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District 10. States of Connecticut and Rhode
Island; Commonwealth of Massachusetts; State of
New York, counties of Columbia, Dutchess and
Putnam.
District 11. State of New York, New York City and
Long Island counties, and counties of Orange,
Rockland, Sullivan (except for the Towns of
Callicoon, Cochecton, Delaware and Fremont),
Ulster and Westchester; State of New Jersey.
District 12. Commonwealth of Pennsylvania,
counties of Bradford, Lackawanna, Luzerne
(northern section), Monroe (northern half), Pike,
Sullivan, Susquehanna, Tioga, Wayne and Wyoming;
State of New York, county of Tioga, and the Towns
of Callicoon, Cochecton, Delaware and Fremont
located in the county of Sullivan.
District 13. State of Delaware; State of
Maryland, counties of Caroline, Cecil,
Dorchester, Kent, Queen Annes, Somerset, Talbot,
Wicomico and Worcester; Commonwealth of
Pennsylvania, counties of Bucks, Chester,
Delaware, Montgomery and Philadelphia.
District 14. Commonwealth of Pennsylvania,
counties of Armstrong, Beaver, Butler, Cameron,
Clarion, Clearfield, Crawford, Elk, Erie (except
for northeast corner), Forest, Jefferson,
Lawrence, Mercer, Venango and Warren (except for
northern section); and northern Ohio.
District 15. Commonwealth of Pennsylvania,
counties of Allegheny, Bedford, Blair, Cambria,
Fayette, Fulton, Greene, Huntingdon, Indiana,
Somerset, Washington, and Westmoreland; State of
Maryland, counties of Allegany and Garrett;
southern Ohio and northern West Virginia.
5.3 Nomination Procedures - District Directors - Each
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district as defined in section 5.2 of these by-laws shall be subdivided
into geographical areas, each to be represented by a member committee, selected
in the manner set forth in section 2.8 of these by-laws, which by its chairman
or vice chairman shall act for its committee as provided herein. At least one
hundred forty (140) days before each annual meeting of the corporation, the
chairman of the corporation shall appoint, for each nomination district from
which a district director is to be elected at the next annual meeting, a
nominating committee for such district consisting of one director of the
corporation from outside such district who will act as chairperson and a
non-voting member of the committee, plus the current committee chairperson of
each member committee within
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such district (or the chairperson's designee) with the total number of
nominating committee members to be not less than four, including the non-voting
chairperson, or greater than the number of member committees within such
district, plus one non- voting chairperson. Such nominating committee shall
recommend the member it deems best qualified to serve as district director from
such district, or if it so chooses, it may recommend two members, both of whom
it deems qualified to serve as district director from such district, and shall
report such recommendation or recommendations to the chairman of the
corporation, who thereupon shall call a meeting of all members of the member
committees within such district, at a place and at a time designated by the
board of directors. The chairman of the corporation shall designate a chairman
and alternate chairman for the meeting so called and the presiding officer
thereof shall appoint a secretary. At such a meeting the nominating committee of
the district shall present its recommendation or recommendations to the meeting
in the form of a nomination. Additional nominations of members residing within
the district may be made from the floor. If there is more than one nominee,
voting shall be by ballot of the chairman (or his alternate) of each member
committee within the district. The vote of each such chairman (or his alternate)
shall be weighted by the volume of member business represented by such chairman
(or his alternate) in accordance with the following formula: under $250,000, 1
vote; $250,000 to $499,999, 2 votes; $500,000 to $749,999, 3 votes; $750,000 to
$999,999, 4 votes; $1,000,000 to $1,999,999, 5 votes; one additional vote for
each additional $1,000,000 of member volume.
Whoever receives a majority of the votes cast shall be
declared the nominee for the district. In case no candidate receives a
majority on the first ballot, on each ballot the candidate with the least number
of votes will be eliminated until one candidate receives a majority. Immediately
after such meeting the secretary thereof shall transmit to the secretary of the
corporation a sworn certificate stating the name of such nominee, which shall be
placed in nomination at the annual meeting by the secretary of the corporation
or his designee.
5.4 Vacancies -
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(a) Any vacancy on the board of directors
occurring during the term of any director, caused by death,
resignation or otherwise may be filled for the unexpired
portion of the term or until a successor shall be elected
by a majority of the directors then in office at any
regular or special meeting of the board. If the term of a
district director being replaced extends beyond the next
annual meeting, the portion of the term following such
meeting shall be filled at such meeting by the stockholders
in accordance with nomination procedures specified by the
board of directors and conforming, as closely as time
permits, to the procedures set forth in section 5.3 of
these by-laws. Any vacancy shall be filled by a person from
the same district as the person being replaced.
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(b) In case the entire board of directors shall
die or resign, any ten (10) stockholders may call a special
meeting in the same manner that the chairman may call such
a meeting, and directors for the unexpired terms may be
elected at such special meeting in the manner provided for
their election at annual meetings.
5.5 Place of Meetings - Meetings of the board of
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directors shall be held at any place which has been designated by the board or
by written consent of all members of the board.
5.6 Regular Meetings - Regular meetings of the board of
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directors may be held at such time and place as may be appointed by the
board, which time may be changed from time to time. At the regular meeting of
the board of directors in October, the election of officers, including the
chairman of the board, the vice- chairman and the president and chief executive
officer shall be conducted.
5.7 Special Meetings - A special meeting of the board
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of directors shall be held whenever called by the chairman, or by the
vice-chairman of the board in the absence of the chairman, or by any five (5)
directors. Any and all business may be transacted at a special meeting.
5.8 Notice of Meetings of Directors - No notice of
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regular meetings of the directors need be given except that in case of a
change in the time for regular meetings written notice of such change shall be
given to directors who were not present at the meeting when such change was
made. Notice of each special meeting shall be given pursuant to section 13.3 of
these by-laws, showing the time and place, at least five (5) days prior to the
time of such meeting.
5.9 Adjournment - Notice of time and place of holding
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an adjourned meeting need not be given to absent directors, if the time and
place be fixed at the meeting adjourned and the adjournment is for a period of
not more than seven (7) days.
5.10 Quorum - Except as herein provided, a majority of
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the directors in office shall be necessary to constitute a quorum for the
transaction of business. In the event of an extreme emergency, including a
substantial disruption of communication as a result of a disaster, whether
nuclear, labor strike, flood, hurricane or any other cause, making it extremely
difficult or impossible to assemble a majority of the board for a duly called
meeting, and such emergency has been declared, either by the president, or, in
his absence, the chairman of the board, or by the President of the United
States, or by any of the Governors of the states in which the corporation does
business, a quorum of the board of directors for the transaction of business at
a meeting duly called shall not be less than one-third of the directors.
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5.11 Compensation of Directors - Directors, as such,
--------------------------
shall not receive any stated compensation for their services unless its
payment has been first authorized by the board of directors. In addition to an
annual retainer, the board of directors may allow a reasonable per diem and
expenses for attendance at any meeting of the board or of the executive
committee, and any other meeting or official business.
5.12 Removal for Cause - A director may be removed for
-----------------
failure to attend three (3) consecutive meetings of the board without
adequate cause, or for other neglect of duty, or for any other cause. Such
removal may be effected in either of the following two ways:
(a) Removal may be by the vote or consent of the
holders of a majority of the shares entitled to vote
at an election of directors; or
(b) Removal may be by the affirmative vote of
three-fourths (3/4) of the entire board (excluding the
director complained of) at any regular or special meeting
of the board, following reasonable notice to the director
complained of and a hearing by the board of directors;
provided, however, that in the event of any such removal,
the board of directors, if requested in writing by the
director subject to removal within ten (10) days of the
removal decision by the board of directors, shall call a
special meeting of the stockholders to confirm or overrule
the decision of the board of directors. If the earliest
practicable date to hold the special meeting of the
stockholders falls within ninety (90) days of the date of
the annual meeting as provided in section 4.1 of these
by-laws, the matter shall be presented to the stockholders
for a vote at the annual meeting. At the meeting of
stockholders at which the question of the removal of the
director is presented for a vote, the director complained
of shall be provided a reasonable opportunity to present
his position. The vote of the holders of a majority of the
shares, present and voting, entitled to vote at an election
of directors shall confirm or overrule the decision of the
board of directors. Until such time as the stockholders act
on the removal of the director complained of, if the
stockholders are required to do so, neither the board of
directors nor the stockholders shall fill the vacancy
caused by the removal of the director.
A vacancy resulting from a vote of the stockholders
may be filled by the stockholders at the meeting voting the removal and if not
so filled shall be filled by the board of directors as provided in section 5.4
of these by-laws.
POWERS OF DIRECTORS
6.1 General Powers - Subject to the limitations of the
--------------
certificate of incorporation, of the by-laws and of the statutes of the State of
Delaware relating to
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action which shall be authorized or approved by stockholders, all corporate
powers shall be exercised by or under the authority of, and the business and
affairs of the corporation shall be controlled by, the board of directors.
Without prejudice to such general powers, but subject to the same limitations,
it is expressly declared that the board of directors shall have the following
powers to wit:
(a) To control the affairs and business of the
corporation and to establish and enforce rules and
regulations not inconsistent with the laws of the State of
Delaware, the certificate of incorporation or by-laws, for
the guidance of its officers and the management and conduct
of its affairs and business.
(b) To borrow money and incur indebtedness for
corporate purposes, and to cause to be executed and
delivered therefor, in the corporate name, promissory
notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations and other evidences of indebtedness
and securities therefor, and to do every act and thing
necessary to effectuate the same.
COMMITTEES OF THE BOARD
7.1 Executive & Compensation Committee - An executive
-------------------------------------
and compensation committee may be established by resolution adopted by a
majority of the whole board, to consist of such number of directors as may be
specified, which shall have and may exercise, in the intervals between meetings
of the board, all the powers and authority of the board of directors, and may
authorize the seal of the corporation to be affixed to all papers which may
require it.
7.2 Other Committees of the Board - Other committees may
------------------------------
be established, from time to time, by resolution of the board specifying the
number of members and prescribing the committee functions and duties.
OFFICERS AND MANAGEMENT
8.1 Corporate Officers - The officers of the corporation
------------------
shall be elected by the board of directors and shall be a chairman of the board,
a vice-chairman, a president and chief executive officer, one or more vice-
presidents, a secretary, a controller, a treasurer and a general counsel. The
board may also appoint any other corporate officers whom the board of directors
may see fit in its discretion to designate. The chairman of the board and the
vice-chairman shall be elected by the directors from their number. The president
and chief executive officer shall recommend employee officers to the board of
directors.
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<PAGE>
8.2 Election and Term of Office - On the recommendation
---------------------------
of the president and chief executive officer, management officers shall be
elected annually at the first meeting of the board of directors following the
annual meeting of s tockholders, or at such other time as the board of directors
shall determine. Unless sooner removed by the board of directors, or unless they
resign or become disqualified, all officers shall hold office until their
successors are chosen and have qualified. Any officer, whether elected or
appointed by the board of directors, may be removed at any time by a majority
vote of all of the directors.
8.3 Powers and Duties - Subject at all times to the
-------------------
control and direction of the board of directors, the president and chief
executive officer shall conduct the business of the corporation in accordance
with its purposes, and shall have administrative authority over all personnel,
including employee officers, in the employ of the corporation; and each other
corporate officer shall have and exercise the powers and duties usual to his
office or delegated to him by the board of directors.
8.4 Compensation of Officers - Officers shall each
--------------------------
receive such compensation as may be fixed by the directors. The president and
chief executive officer shall recommend compensation for employee officers
to the board of directors.
8.5 Vacancies - A vacancy occurring in any office may be
---------
filled by a majority of the directors then in office at any regular or special
meeting of the board.
8.6 Checks, Bills and Notes - All checks, drafts, bills
-----------------------
of exchange, notes, orders for the payment of money and other negotiable
instruments of the corporation shall be made in the name of the corporation, and
shall be signed by any one of the following: the president, any vice president,
the secretary, treasurer, controller, or any assistant secretary, assistant
treasurer or assistant controller. The board of directors may also delegate to
other officers or agents the power to sign or countersign such instruments. No
officers or agents of the corporation singly or jointly with others shall have
the power to make any bill payable, note or check or other negotiable instrument
or endorse the same in the name of the corporation, or contract or cause to be
contracted any debt or liability in the name or on behalf of the corporation,
except as provided in these by-laws, and as authorized by the board of
directors. Bills of exchange, checks, notes and other negotiable instruments
received by the corporation shall be endorsed for collection by such officers or
agents as may be designated by the board of directors for that purpose.
PATRONAGE ACCOUNTING
9.1 Scope of Patronage Refund Provisions - The provisions
------------------------------------
of sections 9.2-9.5 of these by-laws provide for patronage refunds only
with respect to that portion of the corporation's business consisting of sales
of farm supplies. Patronage refunds, if any, with respect to marketing
operations will be paid only pursuant to
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marketing contracts with members and contract patrons providing for the payment
of such refunds.
9.2 Definitions - As used in sections 9.2-9.5 of these
-----------
by-laws:
(a) Member - The term "member" includes any
------
member of the corporation as defined in section 1.2(c) of
these by-laws and also any person who has entered into a
patronage refund contract with the corporation as
authorized by section 9.5 of these by-laws. The term
"non-member" refers to any person who is not a member as
that term is defined in the preceding sentence.
(b) Net Margin - The "net margin" of the
----------
corporation shall be taxable income from sales of farm
supplies for the fiscal year, as computed for federal
income tax purposes, but without taking into account any
deductions for patronage refunds.
(c) Member Margin - "Member margin" shall be
-------------
that portion of the net margin derived from sales of farm
supplies to members, determined by multiplying the net
margin by the percentage of gross purchasing volume which
is attributable to sales of farm supplies to members.
(d) Volume Subject to Refund - "Volume subject
-------------------------
to refund" is the gross volume of the corporation from
sales of farm supplies for any fiscal year, reduced by that
portion of such volume attributable to business with
non-members, and increased by the average percentage
mark-up necessary to reflect an equivalent volume at the
retail level.
(e) Member's Pro Rata Share - Each "member's
-------------------------
pro rata share" of any refund or reserve shall be computed
by multiplying the amount or volume subject to refund
attributable to such member by a percentage determined by
dividing the total refund or reserve to be allocated, as
the case may be, by the total amount of volume subject to
refund.
(f) Patronage Refund - The term "patronage
-----------------
refund" shall include a patronage refund or rebate or any
amount paid to a patron pursuant to section 9.5 of these
by-laws on the basis of business done with or for such a
patron.
9.3 Reasonable Reserves - The board of directors may
-------------------
set aside each fiscal year, from the net margin of the corporation, such
amounts as the board of directors in its discretion deems necessary for the
efficient prosecution of the corpora tion's business, provided however, that no
amounts shall be set aside which are not
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<PAGE>
reasonable in amount, giving due regard to the purposes thereof (such amounts
being sometimes hereinafter referred to as "reasonable reserves"). Any reserves
set aside pursuant to section 9.3 of these by-laws shall be allocated first to
all net earnings, as defined in (ii) of section 9.4 of these by-laws, of the
corporation other than member margin and, to the extent that such reserves
exceed such net earnings, to member margin. Such reasonable reserves may be used
for such proper corporate purposes as shall be determined by the board of
directors, including, but not limited to the accumulation of working capital,
contributions to sinking funds to meet future indebtedness, payment of Federal
income and excess profits taxes, acquisition of funds for expansion or
replacement, or accumulations of reserves to offset price declines. The
corporation shall maintain records sufficient to afford permanent means for
apportioning to each member his pro rata share of all amounts retained by the
corporation as reasonable reserves for each fiscal year.
9.4 Dividends on Capital Stock - The board of directors
--------------------------
may set aside each fiscal year from funds available therefor such amounts as
the board deems appropriate for payment as dividends on issued and outstanding
capital stock. Such amounts shall be allocated pro rata between (i) member
margin and (ii) all other net earnings of the corporation (including both net
margin derived from purchasing business conducted with non-members, and earnings
not derived from purchasing).
9.5 Payment of Patronage Refunds -
----------------------------
(a) Obligation to Pay Patronage Refunds - The
---------------------------------------
corporation shall be obligated, as soon as practicable
after the close of each fiscal year and in no event later
than 8 1/2 months after the close thereof, to pay each
member in cash as a patronage refund his pro rata share of
all member margin remaining after deducting amounts, if
any, set aside therefrom by the board of directors (1) as
reasonable reserves pursuant to section 9.3 of these
by-laws and (2) for payment as dividends on issued and
outstanding capital stock pursuant to section 9.4 of these
by- laws; provided that the amount of patronage refunds
thus determined shall be increased or decreased to the
extent necessary to enable the obligation for the payment
of such refunds to be expressed as a percentage of volume.
(b) Minimum Payment of Patronage Refunds -
---------------------------------------------
Notwithstanding the provisions of paragraph (a) of section
9.5 of these by-laws, the board of directors shall fix
and/or amend from time to time the minimum amount which
shall be paid as a patronage refund and any amount less
than that so fixed shall not be distributed to the member
entitled thereto (unless he claims it in cash) but shall be
retained by the corporation as through it were part of a
reasonable reserve set aside pursuant to section 9.3 of
these by-laws.
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<PAGE>
(c) Obligation to Pay Patronage Refunds Absolute-
---------------------------------------------
The corporation shall be absolutely liable for the payment
of patronage refunds as provided herein without further
action on the part of any officer or of the board of
directors.
(d) Place of Purchase - Each member shall be
------------------
entitled to his respective pro rata share of any patronage
refunds paid with respect to Agway distributed goods
purchased from Agway and certain dealers. The corporation
shall enter into such contracts, undertakings and
understandings with certain dealers as may be necessary and
proper to insure that each member will receive his pro rata
share of such refunds.
9.6 Contract Patrons - The board of directors may
-----------------
authorize the appropriate officers and/or employees of the corporation to
contract to pay and to pay patronage refunds to patrons other than the members
as defined in section 1.2(c) of these by-laws, provided the amounts of such
patronage refunds are determined upon the same basis and under the same terms
and conditions as those of such members, and provided further that any such
contract shall be entered into prior to the accumulation of any gross receipts
subject to the charge of such patronage refunds.
MARKETING
10.1 Marketing Contracts - The terms and conditions under
-------------------
which agricultural products of members shall be marketed may be established by
marketing contracts to be executed by the corporation and its members on an
individual commodity or commodity group basis, not inconsistent with the
provisions of these by-laws.
[11.1 - Intentionally left blank]
INDEMNIFICATION
12.1 Right to Indemnification - The corporation shall
------------------------
indemnify to the fullest extent possible under applicable law as it
presently exists or may hereafter be amended, any person (an "Indemnitee") who
was or is made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he, or a person for
whom he is the legal representative, is or was a director, officer, employee or
agent of the corporation or, while a director or officer of the corporation, is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, limited liability
company, joint venture, trust, enterprise or nonprofit entity, including service
with respect to
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<PAGE>
employee benefit plans, against all liability and loss suffered and expenses
(including attorneys' fees) reasonably incurred by such Indemnitee.
Notwithstanding the preceding sentence, except as otherwise provided in section
12.3, the corporation shall be required to indemnify an Indemnitee in connection
with a proceeding (or part thereof) commenced by such Indemnitee only if the
commencement of such proceeding (or part thereof) by the Indemnitee was
authorized by the Board of Directors of the corporation.
12.2 Prepayment of Expenses - The corporation shall pay
----------------------
the expenses (including attorneys' fees) incurred by a current or former
director or officer of the corporation in defending any proceeding in advance of
its final disposition, provided, however, that, to the extent required by law,
such payment of expenses in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Indemnitee to repay all
amounts advanced if it should be ultimately determined that the Indemnitee is
not entitled to be indemnified under sections 12.1- 12.7 of these by-laws or
otherwise.
12.3 Claims - If a claim for indemnification or
------
advancement of expenses under sections 12.1-12.7 of these by-laws is not
paid in full within sixty days after a written claim therefor by the Indemnitee
has been received by the corporation, the Indemnitee may file suit to recover
the unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the reasonable expense of prosecuting such claim. In any
such action the corporation shall have the burden of proving that the Indemnitee
is not entitled to the requested indemnification or advancement of expenses
under applicable law.
12.4 Nonexclusivity of Rights - The rights conferred on
------------------------
any Indemnitee by sections 12.1-12.7 of these by - laws shall not be
exclusive of any other rights which such Indemnitee may have or hereafter
acquire under any statute, provision of the certificate of incorporation, these
by-laws, agreement, vote of stockholders or disinterested directors or
otherwise.
12.5 Other Sources - The corporation's obligation, if
-------------
any, to indemnify or to advance expenses to any Indemnitee who was or is
serving at its request as a director, officer, employee or agent of another
corporation, partnership, limited liability company, joint venture, trust,
enterprise or nonprofit entity shall be reduced by any amount such Indemnitee
may collect as indemnification or advancement of expenses from such other
corporation, partnership, limited liability company, joint venture, trust,
enterprise or non-profit enterprise.
12.6 Amendment or Repeal - Any repeal or modification
-------------------
of the foregoing provisions of sections 12.1-12.5 of these by-laws shall
not adversely affect any right or protection hereunder of any Indemnitee in
respect of any act or omission occurring prior to the time of such repeal or
modification.
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<PAGE>
12.7 Other Indemnification and Prepayment of Expenses -
------------------------------------------------
Sections 12.1-12.6 of these by-laws shall not limit the right of the
corporation, to the extent and in the manner permitted by law, to indemnify or
to advance expenses to persons other than Indemnitees when and as authorized by
appropriate corporate action.
MISCELLANEOUS
13.1 Principal Office - The principal office of the
----------------
corporation in the State of Delaware shall be located at 1209 Orange Street in
the City of Wilmington, County of New Castle.
13.2 Other Offices - The principal office outside the
-------------
State of Delaware shall be at DeWitt, New York. The corporation may also have an
office or offices at such other place or places, within or without the State of
Delaware as the board of directors may from time to time appoint, or the
business of the corporation may require.
13.3 Method of Giving Notice - Whenever in these by-laws
-----------------------
notice is required to be given, it may be given by any one or more of the
following methods:
(a) Delivered personally; or
(b) Written notice either deposited in the mail
postage prepaid or sent by telegraph, addressed to the
residence or place of business of the person to be notified
as the same shall appear on the records of the corporation;
or
(c) To members or stockholders by publication in
any corporation bulletin or other periodical mailed to
members or stockholders; or
(d) Any other means permitted under applicable
law.
13.4 Waiver of Notice - The transactions of any meeting
----------------
of the board of directors or any committee however called and noticed or
wherever held, shall be as valid as though had at a meeting duly held, after
regular call and notice, if a quorum be present, and if, either before or after
the meeting, each of the directors or committee members not present signs a
written waiver of notice or a consent to holding such meeting. All such waivers
or consents shall be filed with the corporate records or made a part of the
minutes of the meeting.
13.5 Effect of Holiday - If the time designated herein
-----------------
for any meeting shall fall upon a legal holiday, then any such meeting shall be
held on the next day following which is not a holiday.
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<PAGE>
13.6 Fiscal Year - The fiscal year of the corporation
-----------
shall extend from July 1 to June 30 following.
13.7 Seal - The seal of the corporation shall be
----
circular in form and shall have inscribed thereon the name of the corporation,
the year of organization and the words: "Corporate Seal, Delaware."
13.8 Amendments - These by - laws may be amended or
----------
repealed or new by-laws adopted as follows:
(a) At any meeting of stockholders, by a vote of
a majority of the stockholders present and voting, provided
that the notice of the meeting shall have set forth the
substance of the proposed amendment, repeal or new by-law
provision upon which the vote is taken, or
(b) By vote of two-thirds of the directors in
office.
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