SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 25, 1996
THOMAS EDISON INNS, INC.
(Exact Name of Registrant as Specified in its Charter)
Michigan
(State or Other Jurisdiction
of Incorporation)
0-17442 38-2730460
(Commission File Number) (IRS Employer
Identification Number)
40 Pearl Street, N.W., Suite 900
Grand Rapids, Michigan 49503
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (616) 776-2600
(Former Name or Former Address, if Changed Since Last Report):
500 North Riverside
St. Clair, Michigan 48079
<PAGE>
Item 5. Other Events.
Background
As previously reported on its current report on Form 8-K dated
October 3, 1995, on September 19, 1995, Thomas Edison Inns, Inc. (the
"Issuer"), Meritage Hospitality Group Incorporated ("Meritage"), Donald W.
Reynolds and Innkeepers Management Company ("Innkeepers") entered into a
Stock Purchase and Sale Agreement (the "Stock Purchase Agreement").
Pursuant to the Stock Purchase Agreement, the Issuer issued to Meritage
1,500,000 authorized and previously unissued shares of the Issuer's common
stock in exchange for Meritage's Secured Promissory Note in the amount of
$10.5 million (the "Note"). Meritage and its affiliates currently own 51.4%
(1,553,100 shares) of the Issuer's 3,020,150 currently issued and
outstanding shares. Prior to September 19, 1995, Mr. Reynolds, then the
Chairman and President of the Issuer, and his affiliates owned 57.2%
(870,248 shares) of the Issuer's then issued and outstanding 1,520,150
shares of common stock, and, based upon information supplied to the Issuer
by Mr. Reynolds, they no longer own any shares in the Issuer.
The Stock Purchase Agreement called for a series of transactions
between the Issuer, Meritage, Reynolds and Innkeepers to be consummated upon
(i) the approval of the holders of a majority of the shares held by parties
other than Meritage, Reynolds or Innkeepers (the "Unaligned Shareholders")
and (ii) the receipt of an opinion from Roney & Co. ("Roney"), the Company's
financial advisor, that the Stock Purchase Agreement was fair from a
financial point of view to the Issuer and its shareholders. Under the Stock
Purchase Agreement, the Issuer agreed to submit the Stock Purchase Agreement
to a vote of the Unaligned Shareholders at a meeting to be held within 120
days (no later than January 17, 1996) of the execution of the Stock Purchase
Agreement. The shareholders meeting was originally scheduled for November
30, 1995.
Pursuant to its obligations under the Stock Purchase Agreement, on
November 17, 1995, Meritage reported to the Issuer that Meritage had
accepted a commitment from American Financial Group, Inc., to provide $15
million in new mortgage financing to the Issuer (the "AFG Commitment"). The
AFG Commitment was conditioned on the closing of the Stock Purchase
Agreement and would expire on February 15, 1996.
On November 22, 1995, Mr. Reynolds informed the Issuer that he, his
family and Innkeepers had sold their 870,248 shares of the Issuer's common
stock to TEI Acquisitions, Inc. ("TAI").
The shareholders meeting at which the Stock Purchase Agreement was
to be put to a vote of the Unaligned Shareholders was not held as originally
scheduled on November 30, 1995.
<PAGE>
On December 12, 1995, TAI filed suit in the Circuit Court for the
County of St. Clair, State of Michigan (Case No. 95-00-33-88-CZ, Deegan, J.)
against the Issuer, Meritage and four members of the Issuer's Board of
Directors: Rebecca L. Awtrey, William F. Ehinger, Joseph P. Michael and
Raymond A. Weigel III (the "TAI Suit"). TAI alleged that the Board had
breached its fiduciary duties in entering into the Stock Purchase Agreement
and sought a preliminary and permanent injunction enjoining the Issuer from
(i) carrying out the terms of the Stock Purchase Agreement, (ii) granting
voting rights to the stock issued to Meritage under the Stock Purchase
Agreement and (iii) from consummating any of the transactions contemplated
by the Stock Purchase Agreement until all impediments to a tender offer
contained therein are made inapplicable to TAI. TAI also sought a
declaratory judgment that (i) TAI's shares have full voting rights and (ii)
the Stock Purchase Agreement or parts of it are invalid and of no force or
effect and (iii) such other relief as the court deems appropriate. The
hearing on the preliminary injunction was scheduled for January 8, 1996.
On January 3, 1996, Meritage filed a motion to dismiss TAI's lawsuit
as to all claims of breach of fiduciary duty. The Issuer would later concur
in this motion. On January 4, 1996, Meritage filed suit in the Circuit
Court for the County of St. Clair, State of Michigan (Case No. 96-000017 CZ,
Deegan, J.), against Mr. Reynolds, Mr. Ehinger, Innkeepers and the Issuer
seeking (i) a declaration that Mr. Reynolds, Innkeepers and the Issuer have
repudiated the Stock Purchase Agreement and have lost all right to enforce
their rights under the Stock Purchase Agreement and that Meritage is
entitled to exercise its rights as a shareholder of the Issuer without
regard to any limitation on such rights appearing in the Stock Purchase
Agreement and (ii) the removal of Mr. Reynolds and Mr. Ehinger as directors
of the Issuer (the "Meritage Suit").
In an order issued by the court in the TAI Suit on January 10, 1996,
the court (i) denied TAI's motion for a preliminary injunction, (ii) allowed
Meritage to proceed to close the Stock Purchase Agreement, (iii) removed Mr.
Reynolds as an officer and director of the Issuer and (iv) appointed Frank
O. Staiger as acting President and a director of the Issuer.
On January 12, 1996, Roney delivered to the Issuer its opinion that
the terms and effect of the Stock Purchase Agreement are fair from a
financial point of view to the Issuer and its shareholders when compared to
the existing financial position of the Issuer. After receipt of this
opinion, and with the approval of the court, the Board resolved that, in
lieu of the shareholders meeting contemplated by the Stock Purchase
Agreement, a shareholders meeting would be held at which time the Unaligned
Shareholders would (unless TAI's shares had the power to vote in such
election) have the sole power to vote in the election of five of the ten
directors to be elected at such meeting. The Board also resolved to waive
Section 8.1 of the Stock Purchase Agreement (which required the Board's
consent for Meritage to take action as a shareholder to cause a material
change to the Issuer) in order to allow Meritage to elect 5 directors
immediately.
<PAGE>
The Issuer and Meritage also agreed to amend the Stock Pledge
Agreement dated September 19, 1995, between the Issuer and Meritage (the
"Stock Pledge Agreement") to obligate Meritage to use all cash dividends
paid to Meritage with respect to the 1,500,000 shares of common stock
covered by the Stock Pledge Agreement to pay the indebtedness evidenced by
the Note. The Issuer and Meritage also agreed that Meritage would not
pursue the Meritage Suit against the Issuer and Mr. Ehinger as long as the
Issuer fulfilled its obligations to Meritage under the Stock Purchase
Agreement.
January 25, 1996 Meeting of the Board of Directors
On January 25, 1996, the size of the Board was expanded to ten
directors and five nominees of Meritage were appointed to the Board:
Christopher B. Hewett, David S. Lundeen, Joseph L. Maggini, Robert E.
Schermer, Sr., and Robert E. Schermer, Jr. The Issuer's Bylaws were amended
to classify the directors into 2 classes (Class 1 being comprised of the
five Meritage nominees and Class 2 being comprised of the incumbent five
directors) who will serve until the 1996 annual meeting of shareholders.
The term of office of the Class 1 directors elected at the 1996 annual
meeting of shareholders will expire at the 1997 annual meeting of
shareholders. The term of office of the Class 1 directors elected as such
at the 1997 annual meeting of shareholders and thereafter will expire at the
second annual meeting of shareholders following their election. The term of
office of the Class 2 directors elected as such at the 1996 annual meeting
of shareholders and thereafter shall expire at the second annual meeting of
shareholders following their election. The Bylaws were also amended to
provide that prior to the 1998 annual meeting of shareholders, Meritage will
not have the right to vote the shares of the Issuer's common stock that
Meritage owns as of January 25, 1996 (the "Meritage Block") for the election
or removal of the Class 2 directors unless the Issuer determines (or a court
of competent jurisdiction orders) that the Issuer's common stock acquired by
TAI directly or indirectly from Reynolds (the "TAI Block") has voting power,
or (ii) permitted by a majority of the Class 2 directors.
The Board also took action to appoint Mr. Schermer, Sr. as Chairman
of the Board of Directors, Mr. Hewett as President and Chief Executive
Officer, Mr. Schermer, Jr. as Executive Vice President and Secretary and
Gerard Belisle, Jr. as Vice President and Treasurer. Mr. Hewett and Mr.
Schermer, Jr. are officers and the sole shareholders of Meritage. Mr.
Belisle is an officer of Meritage.
The Board of Directors also established several committees, replaced
the directors of each of the Issuer's subsidiaries and terminated the
Management Agreement between Innkeepers and the Issuer and its subsidiaries.
<PAGE>
On January 29, 1996, Meritage's motion to dismiss the TAI suit as to
all breach of fiduciary duty claims was granted and such claims were
dismissed.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The following exhibit is filed as part of this Current Report:
Exhibit No. Document
----------- --------
3(ii) Restated and Amended Bylaws of Thomas
Edison Inns, Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Issuer has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 2, 1996
THOMAS EDISON INS, INC.
/s/Christopher B. Hewett
Christopher B. Hewett
President
<PAGE>
Exhibit Index
Exhibit No.
- -----------
3.2 Restated and Amended Bylaws of Thomas Edison Inns, Inc.
RESTATED AND AMENDED
BYLAWS
OF
THOMAS EDISON INNS, INC.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be in
the City of Grand Rapids, County of Kent, State of Michigan.
Section 2. Other Offices. The corporation may also have offices at
such other places both within and without the State of Michigan as the board
of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
SHAREHOLDERS
Section 1. Place of Meeting. All meetings of the shareholders of
this corporation shall be held at the registered office or such other place,
either within or without the State of Michigan, as may be determined from
time to time by the board of directors.
Section 2. Annual Meeting of Shareholders. The annual meeting of
shareholders for election of directors and for such other business as may
properly come before the meeting, commencing with the year 1987, shall be
held on the third Tuesday of May, if not a legal holiday, and if a legal
holiday, then on the next business day following, at 10:00 am., local time,
or at such other date and time as shall be determined from time to time by
the board of directors, unless such action is taken by written consent as
provided in Article II, Section 12 of these bylaws. If the annual meeting
is not held on the date designated therefor, the board shall cause the
meeting to be held as soon thereafter as convenient.
Section 3. Order of Business at Annual Meeting. The order of
business at the annual meeting of the shareholders shall be as follows:
(a) Reading of notice and proof of mailing,
(b) Reports of Officers,
(c) Election of Directors,
(d) Transaction of other business mentioned in the notice,
(e) Adjournment,
provided that, in the absence of any objection, the presiding officer may
vary the order of business at his discretion.
Section 4. Notice of Meeting of Shareholders. Except as otherwise
provided in the Michigan Business Corporation Act (herein called the "Act"),
written notice of the time, place, and purpose of a meeting of shareholders
shall be given not less than ten (10) nor more than sixty (60) days before
the date of the meeting, either personally or by mail, to each shareholder
of record entitled to vote at the meeting. When a meeting is adjourned to
another time or place, it is not necessary to give notice of the adjourned
meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken and at the
adjourned meeting only such business is transacted as might have been
transacted at the original meeting. However, if after the adjournment the
board of directors fix a new record date for the adjourned meeting, a notice
of the adjourned meeting shall be given to each shareholder of record on the
new record date entitled to vote at the meeting.
Section 5. List of Shareholders Entitled to Vote. The officer or
agent having charge of the stock transfer books for shares of the
corporation shall make and certify a complete list of the shareholders
entitled to vote at a shareholders' meeting or any adjournment thereof. The
list shall:
(a) Be arranged alphabetically within each class and series,
with the address of, and the number of shares held by, each shareholder.
(b) Be produced at the time and place of the meeting.
(c) Be subject to inspection by any shareholder during the whole
time of the meeting.
(d) Be prima facie evidence as to who are the shareholders
entitled to examine the list or to vote at the meeting.
Section 6. Special Meeting of Shareholders. A special meeting of
shareholders may be called at any time by the chief executive officer of the
corporation (See Article V, Section 4) or by a majority of the members of
the board of directors then in office, or by shareholders owning, in the
aggregate, notless than ten percent (10%) of all the shares entitled to vote
at such special meeting. The method by which such meeting may be called is
as follows: Upon receipt of a specification in writing setting forth the
date and objects of such proposed special meeting, signed by the chief
executive officer, or by a majority of the members of the board of directors
then in office, or by shareholders as above provided, the secretary of this
corporation shall prepare, sign, and mail the notices requisite to such
meeting.
Section 7. Quorum of Shareholders. Unless a greater or lesser
quorum is provided in the articles of incorporation, in a bylaw adopted by
the shareholders, or in the Act, shares entitled to cast a majority of the
votes at a meeting constitute a quorum at the meeting. The shareholders
present in person or by proxy at such meeting may continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum. Whether or not a quorum is present, the meeting
may be adjourned by a vote of the shares present.
Section 8. Vote of Shareholders. Each outstanding share is
entitled to one (1) vote on each matter submitted to a vote, unless
otherwise provided in the articles of incorporation. A vote may be cast
either orally or in writing. When an action, other than the election of
directors, is to be taken by vote of the shareholders, it shall be
authorized by a majority of the votes cast by the holders of shares entitled
to vote thereon, unless a greater plurality is required by the articles of
incorporation or the Act. Directors shall be elected by a plurality of the
votes cast at an election.
Section 9. Record Date for Determination of Shareholders. For the
purpose of determining shareholders entitled to notice of and to vote at a
meeting of shareholders or an adjournment thereof, or to express consent or
to dissent from a proposal without a meeting, or for the purpose of
determining shareholders entitled to receive payment of a dividend or
allotment of a right, or for the purpose of any other action, the board may
fix, in advance, a date as the record date for any such determination of
shareholders. The date shall not be more than sixty (60) nor less than ten
(10) days before the date of the meeting, nor more than sixty (60) days
before any other action. If a record date is not fixed (a) the record date
for deter-mination of shareholders entitled to notice of or to vote at a
meeting of shareholders shall be the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the
day next preceding the day on which the meeting is held, and (b) the record
date for determining shareholders for any purpose other than that specified
in subdivision (a) shall be the close of business on the day on which the
resolution of the board relating thereto is adopted. When a determination
of shareholders of record entitled to notice of or to vote at a meeting of
shareholders has been made as provided in this Section, the determination
applies to any adjournment of the meeting, unless the board fixes a new
record date under this Section for the adjourned meeting.
Section 10. Proxies. A shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent without a meeting may
authorize one or more other persons to act for him by proxy. A proxy shall
be signed by the shareholder or his authorized agent or representative. A
proxy is not valid after the expiration of three (3) years from its date
unless otherwise provided in the proxy.
Section 11. Inspectors of Election. The board of directors, in
advance of a shareholders' meeting, may appoint one (1) or more inspectors
of election to act at the meeting or any adjournment thereof. If inspectors
are not so appointed, the person presiding at a shareholders' meeting may,
and on request of a shareholder entitled to vote thereat shall, appoint one
(1) or more inspectors. In case a person appointed fails to appear or act,
the vacancy may be filled by appointment made by the board of directors in
advance of the meeting or at the meeting by the person presiding thereat.
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine challenges and questions arising in
connection with the right to vote, count and tabulate votes, ballots or
consents, determine the result, and do such acts as are proper to conduct
the election or vote with fairness to all shareholders. On request of the
person presiding at the meeting or a shareholder entitled to vote thereat,
the inspectors shall make and execute a written report to the person
presiding at the meeting of any of the facts found by them and matters
determined by them. The report is prima facie evidence of the facts stated
and of the vote as certified by the inspectors.
Section 12. Consent of Stockholders in Lieu of Meeting. The
articles of incorporation may provide that any action required or permitted
by the Act to be taken at an annual or special meeting of shareholders may
be taken without a meeting, without prior notice, and without a vote, if a
consent in writing, setting forth the action so taken, is signed by the
holders of outstanding stock having not 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. Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to shareholders who have not
consented in writing. Any action required or permitted by the Act to be
taken at an annual or special meeting of shareholders may be taken without a
meeting, without prior notice, and without a vote, if all the shareholders
entitled to vote thereon consent thereto in writing.
Section 13. Participation in Meeting by Telephone. By oral or
written permission of a majority of the shareholders, a shareholder may
participate in a meeting of shareholders by conference telephone or similar
communications equipment by which all persons participating in the meeting
may hear each other if all participants are advised of the communications
equipment and the names of the participants in the conference are divulged
to all participants. Participation in a meeting pursuant to this Section
constitute presence in person at the meeting.
ARTICLE III
DIRECTORS
Section 1. Number and Term. (a) The business and affairs of the
corporation shall be managed by a Board of Directors comprised of not less
than 10 directors. The directors shall be divided into two classes, as
nearly equal in number as possible. By majority vote of the directors
comprising each of the Class I and Class II directors, the number of
directors on the Board may be increased to any number greater than 10. A
director shall hold office until his or her successor has been duly elected
and qualified.
(b) Christopher B. Hewett, David S. Lundeen, Joseph L. Maggini,
Robert E. Schermer, Sr., and Robert E. Schermer, Jr. shall be the initial
Class I directors. The initial Class I directors shall take office on
January 25, 1996, and shall serve until the 1996 annual meeting of
shareholders. The term of office of the Class I directors elected as such
at the 1996 annual meeting of shareholders shall expire at the 1997 annual
meeting of shareholders. The term of office of the Class I directors
elected as such at the 1997 annual meeting of share- holders and thereafter
shall expire at the second annual meeting of shareholders following their
election.
(c) The incumbent directors as of January 25, 1996 (i.e., Rebecca
L. Awtrey, William F. Ehinger, Joseph L. Michael, Frank O. Staiger, Jr., and
Raymond A. Weigel, III) shall be the initial Class II directors. The
initial Class II directors shall serve until the 1996 annual meeting of
shareholders. The term of office of the Class II directors elected as such
at the 1996 annual meeting of shareholders and thereafter shall expire at
the second annual meeting of shareholders following their election.
(d) Prior to the 1998 annual meeting of shareholders, Meritage
Hospitality Group Incorporated ("Meritage") shall have the right to vote the
shares of the corporation's stock that Meritage owns as of January 25, 1996
(the "Meritage Block") (i) for the election or removal of Class II
directors, and (ii) for the amendment of this Section 1, only if the
corporation determines (or a court of competent jurisdiction orders) that
the corporation's stock acquired by TEI Acquisition, Inc. directly and
indirectly from Donald W. Reynolds (the "TAI Block") has voting power, or
with the consent of a majority of the Class II directors. There is no
limitation on the voting rights or voting power of the stock in the Meritage
Block except as expressly set forth in the immediately preceding sentence of
this subsection (d), and in Article III, Section 3 of these bylaws.
Further, the Meritage Block shall have the right and power to vote for the
election or removal of Class II directors and for the amendment of this
Section 1 at the 1998 annual meeting of shareholders and at all times
thereafter. If for any reason an annual meeting of shareholders does not
occur in 1998, all voting limitations applicable to the Meritage Block
contained in these bylaws in any event shall become null and void on
December 31, 1998. There is no limitation on thevoting rights or voting
power of any stock with respect to which Meritage acquires ownership or
voting power after January 25, 1996.
(e) Prior to the 1998 annual meeting of shareholders, this Section
1 may be amended only (i) with the approval of a majority of each of the
Class I directors and Class II directors, or (ii) by the holders of a
majority of the shares entitled to vote at an election of directors (subject
to the limitation applicable to the Meritage Block set forth in subsection
(d) of this Section 1); provided, however, that prior to the 1998 annual
meeting of shareholders, this Section 1 may be amended in the same manner
that any other provision of these bylaws may be amended if the amendment is
to become effective on or after the date of the 1998 annual meeting of
shareholders. On and after the date of the 1998 annual meeting of
shareholders (and in any event after December 31, 1998), this Section 1 may
be amended in the same manner that any other provision of these bylaws may
be amended.
(f) The last sentence of Article IX, Section 1 of these bylaws
shall not be applicable to this Section 1.
Section 2. Vacancies. A position occurring in the board resulting
from a vacancy may be filled by affirmative vote of a majority of the
remaining directors in the class in which the vacancy occurs, though less
than a quorum of the board. A position occurring in the board resulting
from an increase in the number of directors may be filled by affirmative
vote of a majority of each class of directors. Any person who becomes a
director pursuant to this Section 2 shall serve for a term of office
continuing until the annual meeting of shareholders at which the term of
office of the class of directors to which such person was elected expires.
If because of death, resignation, removal or other cause, the corporation
has no directors in office, an officer, a shareholder, an executor,
administrator, trustee or guardian of the person or estate of a shareholder,
may call a special meeting of shareholders in accordance with the articles
of incorporation or these bylaws.
Section 3. Removal. A director or the entire board may be removed
at any time, with or without cause, by vote of the holders of a majority of
the shares entitled to vote at an election of directors; provided, however,
that prior to the 1998 annual meeting of shareholders, the Meritage Block
may be voted on the question of removing Class II directors only if the
corporation determines (or a court of competent jurisdiction orders) that
the TAI Block has the right to vote on such question. If for any reason an
annual meeting of shareholders does not occur in 1998, all voting
limitations applicable to the Meritage Block contained in these bylaws in
any event shall become null and void on December 31, 1998.
Section 4. Resignation. A director may resign by written notice to
the corporation. The resignation is effective upon its receipt by the
corporation or a subsequent time as set forth in the notice of resignation.
Section 5. Powers. The business and affairs of the corporation
shall be managed by its board of directors except as otherwise provided in
the Act or in the articles of incorporation.
Section 6. Location of Meetings. Regular or special meetings of
the board of directors may be held either within or without the State of
Michigan.
Section 7. Organization Meeting of Board. The first meeting of
each newly elected board of directors shall be held at the place of holding
the annual meeting of shareholders, and immediately following the same, for
the purpose of electing officers and transacting any other business properly
brought before it, provided that the organization meeting in any year may be
held at a different time and place than that herein provided by a consent of
a majority of the directors of such new board. No notice of such meeting
shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a quorum shall be present, unless said
meeting is not held at the place of holding and immediately following the
annual meeting of shareholders.
Section 8. Regular Meeting of Board. Regular meetings of the board
of directors may be held without notice at such time and at such place as
shall from time to time be determined by the board.
Section 9. Special Meeting of Board. Special meetings of the board
of directors may be called by the chief executive officer, or by a majority
of the persons then comprising the board of directors, at any time by means
of notice of the time and place thereof to each director, given not less
than twenty-four (24) hours before the time such special meeting is to be
held.
Section 10. Committees of Directors. The board of directors may
designate one (1) or more committees, each committee to consist of one or
more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace an
absent or disqualified member at a meeting of the committee. In the absence
or disqualification of a member of a committee, the members thereof present
at a meeting and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors creating such committee, may exercise
all the powers and authority of the board of directors in the management of
the business and affairs of the corporation. However, such a committee does
not have the power or authority to amend the articles of incorporation,
adopt an agreement of merger or consolidation, recommend to the shareholders
the sale, lease, or exchange of all or substantially all of the
corporation's property and assets, recommend to the shareholders a
dissolution of the corporation or a revocation of a dissolution, amend the
bylaws of the corporation, fill vacancies in the board of directors, or fix
compensation of the directors serving on the board or on a committee; and,
unless the resolution of the board of directors creating such committee or
the articles of incorporation expressly so provides, such a committee
doesnot have the power or authority to declare a dividend or to authorize
the issuance of stock. Any such committee, and each member thereof, shall
serve at the pleasure of the board of directors.
Section 11. Quorum and Required Vote of Board and Committees. At
all meetings of the board of directors, or of a committee thereof, a
majority of the members of the board then in office, or of the members of a
committee thereof, constitutes a quorum for transaction of business. The
vote of the majority of members present at a meeting at which a quorum is
present constitutes the action of the board or of the committee unless the
vote of a larger number is required by the Act. Amendment of these bylaws
by the board requires the vote of not less than a majority of the members of
the board then in office. If a quorum shall not be present at any meeting
of the board of directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 12. Action by Written Consent. Action required or
permitted to be taken pursuant to authorization voted at a meeting of the
board of directors or a committee thereof, may be taken without a meeting
if, before or after the action, all members of the board or of the committee
consent thereto in writing. The written consents shall be filed with the
minutes of the proceedings of the board or committee. The consent has the
same effect as a vote of the board or committee for all purposes.
Section 13. Compensation of Directors. The board of directors, by
affirmative vote of a majority of directors in office and irrespective of
any personal interest of any of them, may establish reasonable compensation
of directors for services to the corporation as directors or officers, but
approval of the shareholders is required if the articles of incorporation,
these bylaws or any provisions of the Act so provide.
Section 14. Participation in Meeting by Telephone. By oral or
written permission of a majority of the board of directors, a member of the
board of directors or of a committee designated by the board may participate
in a meeting by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other. Participation in a meeting pursuant to this Section
constitutes presence in person at the meeting.
ARTICLE IV
NOTICES
Section 1. Notice. Whenever any notice or communication is
required to be given by mail to any director or shareholder under any
provision of the Act, or of the articles of incorporation or ofthese bylaws,
it shall be given in writing, except as otherwise provided in the Act, to
such director or shareholder at the address designated by him for that
purpose or, if none is designated, at his last known address. The notice or
communication is given when deposited, with postage thereon prepaid, in a
post office or official depository under the exclusive care and custody of
the United States postal service. The mailing shall be registered,
certified, or other first class mail except where otherwise provided in the
Act. Written notice may also be given in person or by telegram, telex,
radiogram, cablegram, or mailgram, and such notice shall be deemed to be
given when the recipient receives the notice personally, or when the notice,
addressed as provided above, has been delivered to the company, or to the
equipment transmitting such notice. Neither the business to be transacted
at, nor the purpose of, a regular or special meeting of the board of
directors need be specified in the notice of the meeting.
Section 2. Waiver of Notice. When, under the Act or the articles
of incorporation or these bylaws, or by the terms of an agreement or
instrument, a corporation or the board or any committee thereof may take
action after notice to any person or after lapse of a prescribed period of
time, the action may be taken without notice and without lapse of the period
of time, if at any time before or after the action is completed the person
entitled to notice or to participate in the action to be taken or, in case
of a shareholder, by his attorney-in-fact, submits a signed waiver of such
requirements. Neither the business to be transacted at, nor the purpose of,
a regular or special meeting of the board of directors need be specified in
the waiver of notice of the meeting. Attendance of a person at a meeting of
shareholders, in person or by proxy, or of a director at a meeting
constitutes a waiver of notice of such meeting, except when the person or
director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.
ARTICLE V
OFFICERS
Section 1. Selection. The board of directors, at its first meeting
and at each meeting following the annual meeting of shareholders, shall
elect or appoint a president, a secretary, and a treasurer. The board of
directors may also elect or appoint a chairman of the board, one (1) or more
vice presidents and such other officers, employees, and agents as it shall
deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from
time to time by the board. Two (2) or more offices may be held by the same
person but an officer shall not execute, acknowledge, or verify an
instrument in more than one (1) capacity.
Section 2. Compensation. The salaries of all officers, employees,
and agents of the corporation shall be fixed by the board of directors;
provided, however, that the board may delegate to the officers the fixing of
compensation of assistant officers, employees, and agents.
Section 3. Term, Removal, and Vacancies. Each officer of the
corporation shall hold office for the term for which he is elected or
appointed and until his successor is elected or appointed and qualified, or
until his resignation or removal. An officer elected or appointed by the
board of directors may be removed by the board with or without cause at any
time. An officer may resign by written notice to the corporation. The
resignation is effective upon its receipt by the corporation or at a
subsequent time specified in the notice of resignation. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
Section 4. Chief Executive Officer. At the first meeting of each
newly-elected board of directors, the board shall designate the chairman of
the board or president as the chief executive officer of the corporation;
provided, however, that if a motion is not made and carried to change the
designation, the designation shall be the same as the designation for the
preceding year; provided, further, that the designation of the chief
executive officer may be changed at any special meeting of the board of
directors. The president shall be the chief executive officer whenever the
office of chairman of the board is vacant. The chief executive officer
shall be responsible to the board of directors for the general supervision
and management of the business and affairs of the corporation and shall see
that all orders and resolutions of the board are carried into effect. The
chairman of the board or president who is not the chief executive officer
shall be subject to the authority of the chief executive officer, but shall
exercise all of the powers and discharge all of the duties of the chief
executive officer, during the absence or disability of the chief executive
officer.
Section 5. Chairman of the Board of Directors. If the board of
directors elects or appoints a chairman of the board, he shall be elected or
appointed by, and from among, the membership of, the board of directors. He
shall preside at all meetings of the shareholders, of the board of directors
and of any executive committee. He shall perform such other duties and
functions as shall be assigned to him from time to time by the board of
directors. He shall be, ex officio, a member of all standing committees.
Except where by law the signature of the president of the corporation is
required, the chairman of the board of directors shall possess the same
power and authority to sign all certificates, contracts, instruments,
papers, and documents of every conceivable kind and character whatsoever in
the name of and on behalf of the corporation which may be authorized by the
board of directors. During the absence or disability of the president, or
while that office is vacant, the chairman of the board of directors shall
exercise all of the powers and discharge all of the duties of the president.
Section 6. President. The president shall be elected or appointed
by, and from among the membership of, the board of directors. During the
absence or disability of the chairman of the board,or while that office is
vacant, the president shall preside over all meetings of the board of
directors, of the shareholders and of any executive committee, and shall
perform all of the duties and functions, and when so acting shall have all
powers and authority, of the chairman of the board. He shall be, ex
officio, a member of all standing committees. The president shall, in
general, perform all duties incident to the office of president and such
other duties as may be prescribed by the board of directors.
Section 7. Vice Presidents. The board of directors may elect or
appoint one or more vice presidents. The board of directors may designate
one or more vice presidents as executive or senior vice presidents. Unless
the board of directors shall otherwise provide by resolution duly adopted by
it, such of the vice presidents as shall have been designated executive or
senior vice presidents and are members of the board of directors in the
order specified by the board of directors (or if no vice president who is a
member of the board of directors shall have been designated as executive or
senior vice president, then such vice presidents as are members of the board
of directors in the order specified by the board of directors) shall perform
the duties and exercise the powers of the president during the absence or
disability of the president. The vice presidents shall perform such other
duties as may be delegated to them by the board of directors, any executive
committee, or the president.
Section 8. Secretary. The secretary shall attend all meetings of
the stockholders, and of the board of directors and of any executive
committee, and shall preserve in the books of the corporation true minutes
of the proceedings of all such meetings. He shall safely keep in his
custody the seal of the corporation and shall have authority to affix the
same to all instruments where its use is required or permitted. He shall
give all notice required by the Act, these bylaws or resolution. He shall
perform such other duties as may be delegated to him by the board of
directors, any executive committee, or the president.
Section 9. Treasurer. The treasurer shall have custody of all
corporate funds and securities and shall keep in books belonging to the
corporation full and accurate accounts of all receipts and disbursements; he
shall deposit all moneys, securities, and other valuable effects in the name
of the corporation in such depositories as may be designated for that
purpose by the board of directors. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper
vouchers for such disbursements, and shall render to the president and the
board of directors whenever requested an account of all his transactions as
treasurer and of the financial condition of the corporation. If required by
the board of directors he shall keep in force a bond in form, amount, and
with a surety or sureties satisfactory to the board of directors,
conditioned for faithful performance of the duties of his office, and for
restoration to the corporation in case of his death, resignation,
retirement, or removal from office, of all books, papers, vouchers, money,
and property of whatever kind in his possession or under his control
belonging to the corporation. He shall perform such other duties as may be
delegated to him by the board of directors, any executive committee, or the
president.
Section 10. Assistant Secretaries and Assistant Treasurers. The
assistant secretary or assistant secretaries, in the absence or disability
of the secretary, shall perform the duties and exercise the powers of the
secretary. The assistant treasurer or assistant treasurers, in the absence
or disability of the treasurer, shall perform the duties and exercise the
powers of the treasurer. Any assistant treasurer, if required by the board
of directors, shall keep in force a bond as provided in Section 9, Article
V. The assistant secretaries and assistant treasurers, in general, shall
perform such duties as shall be assigned to them by the secretary or by the
treasurer, respectively, or by the board of directors, any executive
committee, or the president.
Section 11. Delegation of Authority and Duties by Board of
Directors. All officers, employees, and agents shall, in addition to the
authority conferred, or duties imposed, on them by these bylaws, have such
authority and perform such duties in the management of the corporation as
may be determined by resolution of the board of directors not inconsistent
with these bylaws.
ARTICLE VI
INDEMNIFICATION
Section 1. Third Party Actions. The corporation shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (other than an action by
or in the right of the corporation) by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee,
or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit, or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit, or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation or
its shareholders, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
Section 2. Actions in the Right of the Corporation. The
corporation shall indemnify any person who was or is a party to or is
threatened to be made a party to any threatened, pending, or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation or its shareholders and
except that no indemnification shall be made in respect of any claim, issue,
or matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the corporation
unless and only to the extent that the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
Section 3. Mandatory and Permissive Payments.
(a) To the extent that a director, officer, employee, or agent
of a corporation has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in Sections 1 or 2 of this
Article VI, or in defense of any claim, issue, or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(b) Any indemnification under Sections 1 or 2 of this Article VI
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in Sections
1 and 2 of this Article VI. Such determination shall be made in either of
the following ways:
(1) By the board of a majority vote of a quorum
consisting of directors who were not parties to such action, suit,
or proceeding.
(2) If such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors, so directs, by
independent legal counsel who may be the regular counsel of the
corporation in a written opinion.
(3) By the shareholders.
Section 4. Expense Advances. Expenses incurred in defending a
civil or criminal action, suit, or proceeding described in Sections 1 or 2
of this Article VI may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in subsection (b) of Section 3 of this Article VI upon receipt of
an undertaking by or on behalf of the director, officer, employee, or agent
to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation.
Section 5. Validity of Provisions. A provision made to indemnify
directors or officers of any action, suit, or proceeding referred to in
Sections 1 or 2 of this Article VI whether contained in the articles of
incorporation, these bylaws, a resolution of shareholders or directors, an
agreement or otherwise, shall be invalid only insofar as it is in conflict
with Sections 1 to 5 of this Article VI. Nothing contained in Sections 1 to
5 of this Article VI shall affect any rights to indemnification to which
persons other than directors and officers may be entitled by contract or
otherwise by law. The indemnification provided in Sections 1 to 5 of this
Article VI continues as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of such person.
Section 6. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
any liability asserted against him and incurred by him in any such capacity
or arising out of his status as such, whether or not the corporation would
have power to indemnify him against such liability under Sections 1 to 5 of
this Article VI.
Section 7. Constituent Corporation. For the purposes of this
Article VI, references to the corporation include all constituent
corporations absorbed in a consolidation or merger and the resulting or
surviving corporation, so that a person who is or was a director, officer,
employee, or agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise shall stand in the same position under the
provisions of this Article VI with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving
corporation in the same capacity.
ARTICLE VII
STOCK AND TRANSFERS
Section 1. Share Certificates: Required Signatures. The shares of
the corporation shall be represented by certificates signed by the chairman
of the board of directors, vice chairman of the board of directors,
president or a vice president and which also may be signed by another
officer of the corporation. The certificates may be sealed with the seal of
the corporation or a facsimile of the seal. The signatures of the officers
may be facsimiles if the certificate is countersigned by a transfer agent or
registered by a registrar other than the corporation itself or its employee.
If an officer who has signed or whose facsimile signature has been placed
upon a certificate ceases to be an officer before the certificate is issued,
it may be issued by the corporation with the same effect as if he were the
officer at the date of issue.
Section 2. Share Certificates: Required Provisions. A certificate
representing shares of the corporation shall state upon its face:
(a) That the corporation is formed under the laws of this state.
(b) The name of the person to whom issued.
(c) The number and class of shares, and the designation of the
series, if any, which the certificate represents.
(d) The par value of each share represented by the certificate,
or a statement that the shares are without par value.
A certificate representing shares issued by a corporation which is
authorized to issue shares of more than one class shall set forth on its
face or back or state that the corporation will furnish to a shareholder
upon request and without charge a full statement of the designation,
relative rights, preferences, and limitations of the shares of each class
authorized to be issued, and if the corporation is authorized to issue any
class of shares in series, the designation, relative rights, preferences,
and limitations of each series so far as the same have been prescribed and
the authority of the board to designate and prescribe the relative rights,
preferences, and limitations of other series.
Section 3. Replacement of Lost or Destroyed Share Certificates.
The corporation may issue a new certificate for shares or fractional shares
in place of a certificate theretofore issued by it, alleged to have been
lost or destroyed, and the board of directors may require the owner of the
lost or destroyedcertificate, or his legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against it on account of the alleged lost or destroyed
certificate or the issuance of such new certificate.
Section 4. Registered Shareholders. The corporation shall have the
right to treat the registered holder of any share as the absolute owner
thereof, and shall not be bound to recognize any equitable or other claim
to, or interest in, such share on the part of any other person, whether or
not the corporation shall have express or other notice thereof, save as may
be otherwise provided by the statutes of Michigan.
Section 5. Transfer Agent and Registrar. The board of directors
may appoint a transfer agent and a registrar in the registration of
transfers of its securities.
Section 6. Regulations. The board of directors shall have power
and authority to make all such rules and regulations as the board shall deem
expedient regulating the issue, transfer, and registration of certificates
for shares in this corporation.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends or other Distributions in Cash or Property.
By action of the board of directors, the corporation may declare and pay
dividends or make other distributions in cash, bonds, or property, including
the shares or bonds of other corporations, on its outstanding shares, except
when currently the corporation is insolvent or would thereby be made
insolvent, or when the declaration, payment, or distribution would be
contrary to any restriction contained in the articles of incorporation.
Dividends may be declared or paid and other distributions may be made out of
surplus only. A dividend paid or any other distribution made, in any part,
from sources other than earned surplus, shall be accompanied by a written
notice (a) disclosing the amounts by which the dividend or distribution
affects stated capital, capital surplus, and earned surplus, or (b) if such
amounts are not determinable at the time of the notice, disclosing the
approximate effect of the dividend or distribution upon stated capital,
capital surplus and earned surplus and stating that the amounts are not yet
determinable.
Section 2. Reserves. The board of directors shall have power and
authority to set apart, out of any funds available for dividends, such
reserve or reserves, for any proper purpose, as the board in its discretion
shall approve, and the board shall have the power and authority to abolish
any reserve created by the board.
Section 3. Voting Securities. Unless otherwise directed by the
board, the chairman of the board or president, or in the case of their
absence or inability to act, the vice presidents, in order of their
seniority, shall have full power and authority on behalf of the corporation
to attend and to act and to vote, or to execute in the name or on behalf of
the corporation a consent in writing in lieu of a meeting of shareholders or
a proxy authorizing an agent or attorney-in-fact for the corporation to
attend and vote at any meetings of security holders of corporations in which
the corporation may hold securities, and at such meetings he or his duly
authorized agent or attorney-in-fact shall possess and may exercise any and
all rights and powers incident to the ownership of such securities and
which, as the owner thereof, the corporation might have possessed and
exercised if present. The board by resolution from time to time may confer
like power upon any other person or persons.
Section 4. Checks. All checks, drafts, and orders for the payment
of money shall be signed in the name of the corporation in such manner and
by such officer or officers or such other person or persons as the board of
directors shall from time to time designate for that purpose.
Section 5. Contracts, Conveyances, Etc. When the execution of any
contract, conveyance, or other instrument has been authorized without
specification of the executing officers, the chairman of the board,
president or any vice president, and the secretary or assistant secretary,
may execute the same in the name and on behalf of this corporation and may
affix the corporate seal thereto. The board of directors shall have power
to designate the officers and agents who shall have authority to execute any
instrument in behalf of this corporation.
Section 6. Corporate Books and Records. The corporation shall keep
books and records of account and minutes of the proceedings of its
shareholders, board of directors and executive committees, if any. The
books, records, and minutes may be kept outside this state. The corporation
shall keep at its registered office, or at the office of its transfer agent
within or without this state, records containing the names and addresses of
all shareholders, the number, class, and series of shares held by each and
the dates when they respectively became holders of record thereof. Any of
such books, records, or minutes may be in written form or in any other form
capable of being converted into written form within a reasonable time. The
corporation shall convert into written form without charge any such record
not in such form, upon written request of a person entitled to inspect them.
Section 7. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the board of directors.
Section 8. Seal. If the corporation has a corporate seal, it shall
have inscribed thereon the name of the corporation and the words "Corporate
Seal" and "Michigan." The seal may be used by causing it or a facsimile to
be affixed, impressed, or reproduced in any other manner.
ARTICLE IX
AMENDMENTS
Section 1. The shareholders or the board of directors may amend or
repeal the bylaws or adopt new bylaws unless power to do so is reserved
exclusively to the shareholders by the articles of incorporation. Such
action may be taken by written consent or at any meeting of shareholders or
the board of directors; provided that if notice of any such meeting is
required by these bylaws, the notice of the meeting shall contain notice of
the proposed amendment, repeal, or new bylaws. Any bylaw hereafter made by
the shareholders shall not be altered or repealed by the board.
