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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 1999
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 340-23520 56-1714315
(State or other (Commission File No.) I.R.S. Employer
jurisdiction Identification Number
of incorporation)
4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200, DURHAM,
NORTH CAROLINA 27703-8411
(Address of principal executive offices)
(919) 998-2000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On November 4, 1999, the Board of Directors of Quintiles Transnational Corp., a
North Carolina corporation (the "Company"), declared a dividend distribution of
one preferred stock purchase right (a "Right") for each outstanding share of
the Company's common stock, $.01 par value (the "Common Stock") to shareholders
of record at the close of business on November 15, 1999 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one
one-thousandth (1/1,000) of a share (a "Preferred Stock Fraction") of the
Company's Series A Preferred Stock, $.01 par value (the "Preferred Stock") at a
price of One Hundred Fifty Dollars ($150.00) (the "Purchase Price"), subject to
adjustment in certain circumstances. The description and terms of the Rights
are set forth in a Rights Agreement between the Company and First Union
National Bank, as Rights Agent, (as it may be amended, modified or supplemented
from time to time, the "Rights Agreement").
Initially, the Rights will be attached to all Common Stock certificates
representing the outstanding shares, and no separate Rights Certificates will
be distributed. Subject to certain exceptions specified in the Rights
Agreement, the Rights will separate from the Common Stock and a "Distribution
Date" will occur upon the earlier of (i) 10 business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock or, in the
case of the Grandfathered Person referred to in the Rights Agreement,
beneficial ownership of a percentage of outstanding Common Stock in excess of
the Grandfathered Percentage referred to therein (the date of such announcement
being the "Stock Acquisition Date") other than as a result of repurchases of
stock by the Company or certain inadvertent actions by certain shareholders, or
(ii) 10 business days (or such later date as the Company's Board of Directors
shall determine) following the commencement of a tender offer or exchange offer
that would result in a person or group becoming an Acquiring Person (which in
the case of the Grandfathered Person, occurs upon beneficial ownership of a
percentage of outstanding Common Stock in excess of the Grandfathered
Percentage).
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
As soon as practicable after the Distribution Date, Rights Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, and except in connection with the exercise of stock options and any
other issuances of Common Stock with respect to awards under employee benefit
plans, only shares of Common Stock issued prior to the Distribution Date will
be issued with Rights.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on November 15, 2009, North Carolina time, unless
extended prior to such time by the Board of Directors, or earlier if redeemed
by the Company as described below.
Except in the circumstances described below, after the Distribution Date each
Right will be exercisable for a Preferred Stock Fraction. Each Preferred Stock
Fraction carries voting and dividend rights that are intended to produce the
equivalent of one share of Common Stock. The voting and dividend rights of the
Preferred Stock are subject to adjustment in the event of dividends,
subdivisions and combinations with respect to the Common Stock of the Company.
In lieu of issuing certificates for fractions of shares of Preferred Stock
(other than fractions which are integral multiples of Preferred Stock
Fractions), the Company may pay cash in accordance with the Rights Agreement.
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In the event that any person becomes an Acquiring Person except pursuant to an
offer for all outstanding shares of Common Stock which the independent
directors, who are not associated with an Acquiring Person, determine to be
fair and adequate to shareholders and to be otherwise in the best interests of
the Company and its shareholders (a "Qualified Offer"), each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the events
described in this paragraph, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation, (ii) the Company engages in a
merger or other business combination transaction with another person in which
the Company is the surviving corporation, but its Common Stock is changed or
exchanged, or (iii) 50% or more of the Company's assets, earning power, or cash
flow is sold or transferred (except with respect to clauses (i) and (ii), a
merger or other business combination which follows a fair offer described in the
second preceding paragraph and in which the amount and form of consideration is
the same as was paid in such offer), each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Preferred Stock Fractions or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on the Preferred Stock or other capital stock, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) if the holders of
the Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at less than the
current market price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends or dividends payable in Preferred
Stock) or of subscription rights or warrants (other than those referred to
above). With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price.
At any time after a person or group of affiliated or associated persons becomes
an Acquiring Person and prior to the acquisition by such person or group of 50%
or more of the outstanding Common Stock, the Board of Directors may exchange
the Rights (other than Rights owned by such person or its affiliates and
associates, which have become void), in whole or in part, at an exchange ratio
of one share of Common Stock, or one one-thousandth of a share of Preferred
Stock (or of a share of a series of the Company's preferred stock having
equivalent preferences, limitations and relative rights), per Right (subject to
adjustment).
In general, at any time until a person becomes an Acquiring Person, the Company
may redeem the Rights in whole, but not in part, at a price of $.0001 per Right
(payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem the Rights will require the concurrence of a
majority of the Continuing Directors (as defined below). Immediately upon the
action of the Board of Directors of the Company ordering redemption of the
Rights (with, where required, the concurrence of the Continuing Directors), the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.0001 redemption price.
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The term "Continuing Director" means any member of the Board of Directors of
the Company who was a member of the Board of Directors prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person or an affiliate or
associate of an Acquiring Person, or any representative of any of such
entities.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company or in the event of the redemption of the
Rights as set forth above.
Prior to the Distribution Date, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board (in
certain circumstances, with the concurrence of the Continuing Directors) in
order to cure any ambiguity, to correct or supplement any defective or
inconsistent provision, to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring Person
or affiliate or associate of such Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided that no amendment may be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement, which includes as Exhibits the Articles of
Amendment of Restated Articles of Incorporation of the Company (setting forth
the terms of the Preferred Stock), the form of Rights Certificate, and the form
of Summary of Rights to Purchase Preferred Stock, has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Also on November 4, 1999, the Board of Directors of the Company adopted an
amendment to the Company's bylaws that permits only the Board of Directors, the
Chairman of the Board or the President to call a special meeting of
shareholders. Previously, the bylaws permitted the holders of 25% of the
outstanding shares to call a special meeting. A copy of the Company's bylaws,
as amended, is attached hereto as an Exhibit.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
4.01(1) Rights Agreement dated as of
November 5, 1999 between
Quintiles Transnational Corp. and
First Union National Bank,
including the form of Articles of
Amendment of Amended and Restated
Articles of Incorporation of the
Company, the form of Rights
Certificate and the Summary of
Rights to Purchase Preferred
Stock, attached thereto as
Exhibits A, B and C,
respectively.
4.02 Amended and Restated Bylaws, as
amended
</TABLE>
------------------
(1) Exhibit to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on November
5, 1999 and incorporated herein by reference.
[Remainder of page intentionally left blank; signature appears on next page]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QUINTILES TRANSNATIONAL CORP.
By: /s/ Rachel R. Selisker
--------------------------------
Dated: November 5, 1999 Rachel R. Selisker
Chief Financial Officer and
Executive Vice President Finance
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
4.01(1) Rights Agreement dated as of November
5, 1999 between Quintiles
Transnational Corp. and First Union
National Bank, including the form of
Articles of Amendment of Amended and
Restated Articles of Incorporation of
the Company, the form of Rights
Certificate and the Summary of Rights
to Purchase Preferred Stock, attached
thereto as Exhibits A, B and C,
respectively.
4.02 Amended and Restated Bylaws, as amended
</TABLE>
------------------
(1) Exhibit to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on November
5, 1999 and incorporated herein by reference.
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AS AMENDED MARCH 13, 1996 AND NOVEMBER 4, 1999
AMENDED AND RESTATED
BYLAWS OF
QUINTILES TRANSNATIONAL CORP.
ARTICLE I
DEFINITIONS
In these bylaws, unless otherwise provided, the following terms shall
have the following meanings:
(1) "Act" shall mean the North Carolina Business Corporation
Act as codified in Chapter 55 of the North Carolina General Statutes, and as
amended from time to time;
(2) "Articles of Incorporation" shall mean the Corporation's
articles of incorporation, including amended and restated articles of
incorporation and articles of merger;
(3) "Corporation" shall mean Quintiles Transnational Corp.
(4) "Distribution" shall mean a direct or indirect transfer
of money or other property (except the Corporation's own shares) or incurrence
of indebtedness by the Corporation to or for the benefit of its shareholders in
respect of any of its shares. A distribution may be in the form of a
declaration or payment of a dividend; a purchase, redemption, or other
acquisition of shares; a distribution of indebtedness; or otherwise;
(5) "Emergency" shall mean a catastrophic event which
prevents a quorum of the board of directors from being readily assembled;
(6) "Shares" shall mean the units into which the proprietary
interests in the Corporation are divided; and
(7) "Voting group" shall mean all shares of one or more
classes or series that under the articles of incorporation or the Act are
entitled to vote and be counted together collectively on a matter at a meeting
of shareholders. All shares entitled by the articles of incorporation or the
Act to vote generally on a matter are for that purpose a single voting group.
ARTICLE II
OFFICES
SECTION 1. Principal Office: The principal office of the Corporation
shall be located at 1007 Slater Road, Morrisville, Wake County, North Carolina
27560-9745, or at such other place as may be determined from time to time by
the directors.
SECTION 2. Registered Office: The registered office of the Corporation
shall be located at 1007 Slater Road, Morrisville, Wake County, North Carolina
27560-9745.
SECTION 3. Other Offices: The Corporation may have offices at such
other places, either within or without the State of North Carolina, as the
board of directors may from time to time determine, or as the affairs of the
Corporation may require.
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ARTICLE III
MEETING OF SHAREHOLDERS
SECTION 1. Place of Meetings: All meetings of shareholders shall be
held at the principal office of the Corporation, or at such other place, either
within or without the State of North Carolina, as shall be designated in the
notice of the meeting or as may be agreed upon by a majority of the
shareholders entitled to vote at the meeting.
SECTION 2. Annual Meeting: The annual meeting of shareholders for the
election of directors and the transaction of other business shall be held
annually at 10:00 a.m. on the third Wednesday in April, or at such other place,
time, and date as the board of directors may designate.
SECTION 3. Substitute Annual Meeting: If the annual meeting shall not
be held on the day designated by these bylaws, a substitute annual meeting may
be called by the board of directors, the chairman of the board, or the
president. A meeting so called shall be designated and treated for all purposes
as the annual meeting.
SECTION 4. Special Meetings: Special meetings of the shareholders may
be called at any time by the board of directors, the chairman of the board, or
the president. Only business within the purpose or purposes described in the
meeting notice specified in Section 5 of this Article may be conducted at a
special meeting of shareholders. [AMENDED NOVEMBER 4, 1999]
SECTION 5. Notice of Meeting: Written or printed notice stating the
time and place of the meeting shall be delivered by the Corporation not less
than ten (10) nor more than sixty (60) days before the date of any
shareholders' meeting, either personally, by mail, by telegraph, by teletype,
or by facsimile transmission, to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his
address as it appears on the record of the shareholders of the Corporation,
with postage thereon prepaid.
In the case of a special meeting, the notice of meeting shall
specifically state the purpose or purposes for which the meeting is called. In
the case of an annual or substitute annual meeting, the notice of meeting need
not specifically state the business to be transacted unless such a statement is
required by the Act.
When an annual or special meeting is adjourned to a different date,
time, and place, it is not necessary to give any notice of the adjourned
meeting other than by announcement at the meeting at which the adjournment is
taken; provided, however, that if a new record date for the adjourned meeting
is or must be set, notice of the adjourned meeting must be given to persons who
are shareholders as of the new record date.
The record date for determining the shareholders entitled to notice of
and to vote at an annual or special meeting shall be fixed as provided in
Section 3 of Article VIII.
SECTION 6. Waiver of Notice: A shareholder may waive notice of any
meeting either before or after such meeting. Such waiver shall be in writing,
signed by the shareholder, and filed with the minutes or corporate records. A
shareholder's attendance at a meeting: (i) waives objection to lack of notice
or defective notice of the meeting, unless the shareholder at the beginning of
the meeting objects to holding the meeting or transacting business at the
meeting; and (ii) waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder objects to considering the matter before it is
voted upon.
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SECTION 7. Shareholder List: Commencing two (2) business days after
notice of a meeting of shareholders is given and continuing through such
meeting, the secretary of the Corporation shall maintain at the principal
office of the Corporation an alphabetical list of the shareholders entitled to
vote at such meeting, arranged by voting group, with the address of and number
of shares held by each. This list shall be subject to inspection by any
shareholder or his representative at any time during usual business hours and
may be copied at the shareholder's expense.
SECTION 8. Quorum: A majority of the votes entitled to be cast on a
matter by any voting group, represented in person or by proxy, shall constitute
a quorum of that voting group for action on that matter. The shareholders
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
In the absence of a quorum at the opening of any meeting of
shareholders, such meeting may be adjourned from time to time by a majority of
the votes voting on the motion to adjourn; and at any adjourned meeting at
which a quorum is present, any business may be transacted which might have been
transacted at the original meeting.
SECTION 9. Proxies: Shares may be voted either in person or by one or
more agents authorized by a written proxy executed by the shareholder or by his
duly authorized attorney in fact. A proxy may take the form of a telegram,
telex, facsimile or other form of wire or wireless communication which appears
to have been transmitted by a shareholder. A proxy is effective when received
by the secretary or other officer or agent authorized to tabulate votes. A
proxy is not valid after the expiration of eleven (11) months from the date of
its execution, unless the person executing it specifies therein the length of
time for which it is to continue in force or limits its use to a particular
meeting.
SECTION 10. Voting of Shares: Subject to the provisions of the
articles of incorporation, and the Act, each outstanding share, regardless of
class, shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders.
Except for the election of directors, which is governed by the
provisions of Section 4 of Article IV, if a quorum is present, action on a
matter by a voting group is approved if the votes cast within the voting group
favoring the action exceed the votes cast against the action, unless the vote
of a greater number is required by the Act, the articles of incorporation, or
these bylaws.
Shares of the Corporation are not entitled to vote if: (i) they are
owned, directly or indirectly, by the Corporation, unless they are held by it
in a fiduciary capacity; (ii) they are owned, directly or indirectly, by a
second corporation in which the Corporation owns a majority of the shares
entitled to vote for directors of the second corporation; or (iii) they are
redeemable shares and (x) notice of redemption has been given and (y) a sum
sufficient to redeem the shares has been deposited with a bank, trust company,
or other financial institution under an irrevocable obligation to pay the
holders the redemption price upon surrender of the shares.
SECTION 11. Informal Action by Shareholders: Any action which may be
taken at a meeting of the shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all of the
persons who would be entitled to vote upon such action at a meeting and is
delivered to the Corporation to be included in the minutes or to be kept as
part of the corporate records.
SECTION 12. Shareholder Proposals. Any shareholder wishing to bring
any business before a meeting of shareholders must provide notice to the
Corporation not more than ninety (90) and not less than fifty (50) days before
the meeting in writing by registered mail, return receipt requested, of the
business to be presented by him at the shareholder's meeting. Any such notice
shall set forth the following as to each matter the shareholder proposes to
bring before the meeting: (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting and, if such business includes a proposal to amend the bylaws of the
Corporation, the language of the proposed
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amendment; (ii) the name and address, as they appear on the Corporation's
books, of the shareholder proposing such business; (iii) the class and number
of shares of the Corporation which are beneficially owned by such shareholder;
(iv) a representation that the shareholder is a holder of record of stock of
the Corporation entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to propose such business; and (v) any
material interest of the shareholder in such business. Notwithstanding the
foregoing provisions of this Section, a shareholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder with respect to the matters set forth in
this Section. In the absence of such notice to the Corporation meeting the
above requirements, a shareholder shall not be entitled to present any business
at any meeting of the shareholders.
SECTION 13. Corporation's Acceptance of Votes: If the name signed on a
vote, consent, waiver, or proxy appointment corresponds to the name of a
shareholder, the Corporation is entitled to accept the vote, consent, waiver,
or proxy appointment and to give it effect as the act of the shareholder.
If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of a shareholder, the Corporation is
nevertheless entitled to accept the vote, consent, waiver, or proxy appointment
and to give it effect as the act of such shareholder if: (i) the shareholder is
an entity and the name signed purports to be that of an officer or agent of the
entity; (ii) the name signed purports to be that of an administrator, executor,
guardian, or conservator representing the shareholder and, if the Corporation
requests, evidence of fiduciary status acceptable to the Corporation has been
presented with respect to the vote, consent, waiver, or proxy appointment;
(iii) the name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the Corporation requests, evidence of its
status acceptable to the Corporation has been presented with respect to the
vote, consent, waiver, or proxy appointment; (iv) the name signed purports to
be that of a beneficial owner or attorney-in-fact of the shareholder and, if
the Corporation requests, evidence acceptable to the Corporation of the
signatory's authority to sign for the shareholder has been presented with
respect to the vote, consent, waiver, or proxy appointment; or (v) two or more
persons are the shareholder as co-tenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing
appears to be acting on behalf of all the co-owners.
The Corporation is entitled to reject a vote, consent, waiver, or
proxy appointment if the secretary or other officer or agent authorized to
tabulate votes has a reasonable basis for doubt about the validity of the
signature on it or about the signatory's authority to sign for the shareholder.
SECTION 14. Number of Shareholders: The following persons or entities
identified as a shareholder in the Corporation's current record of shareholders
constitute one shareholder for purposes of these bylaws: (i) all co-owners of
the same shares; (ii) a corporation, partnership, trust, estate, or other
entity; and (iii) the trustees, guardians, custodians, or other fiduciaries of
a single trust, estate, or account. Shareholdings registered in substantially
similar names constitute one shareholder if it is reasonable to believe that
the names represent the same person.
ARTICLE IV
BOARD OF DIRECTORS
SECTION 1. General Powers: All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the Corporation
shall be managed under the direction of, its board of directors.
SECTION 2. Number, Term and Qualifications: The number constituting
the board of directors shall be within the range specified in the articles of
incorporation and shall be divided into three (3) classes as provided for in
the articles of incorporation. The board of directors may by resolution fix or
change the number of directors from time to time, so long as the number is
within the range specified in the articles of incorporation. Each director
shall hold office until his death, resignation, retirement, removal,
disqualification, or until his successor is elected and qualified. Directors
need not be residents of the State
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of North Carolina.
SECTION 3. Nomination of Directors: Nominations for the election of
directors may only be made by the board of directors, by the nominating
committee of the board of directors (or, if none, any other committee serving a
similar function) or by any shareholder entitled to vote generally in elections
of directors where the shareholder complies with the requirements of this
Section. Any shareholder of record entitled to vote generally in elections of
directors may nominate one or more persons for election as directors at a
meeting of shareholders only if written notice of such shareholder's intent to
make such nomination or nominations has been given, either by personal delivery
or by United States certified mail, postage prepaid, to the Secretary of the
Corporation (i) with respect to an election to be held at an annual meeting of
shareholders, not more than ninety (90) days nor less than fifty (50) days in
advance of such meeting; and (ii) with respect to an election to be held at a
special meeting of shareholders called for the purpose of the election of
directors, not later than the close of business on the tenth business day
following the date on which notice of such meeting is first given to
shareholders. Each such notice of a shareholder's intent to nominate a director
or directors at an annual or special meeting shall set forth the following: (A)
the name and address, as they appear on the Corporation's books, of the
shareholder who intends to make the nomination and the name and residence
address of the person or persons to be nominated; (B) the class and number of
shares of the Corporation which are beneficially owned by the shareholder; (C)
a representation that the shareholder is a holder of record of stock 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; (D) a description of all arrangements or understandings between the
shareholder 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 shareholders; (E) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for election of directors, or as would otherwise be
required, in each case pursuant to Regulation 14A under the Securities and
Exchange Act of 1934, as amended, including any information that would be
required to be included in a proxy statement filed pursuant to Regulation 14A
had the nominee been nominated by the board of directors; and (F) the written
consent of each nominee to be named in a proxy statement and to serve as
director of the Corporation if so elected. No person nominated by a shareholder
shall be eligible to serve as a director of the Corporation unless nominated in
accordance with the procedures set forth in this Section. If the chairman of
the shareholders meeting shall determine that a nomination was not made in
accordance with the procedures described by the bylaws of the Corporation, he
shall so declare to the meeting, and the defective nomination shall be
disregarded. Notwithstanding the foregoing provisions of this Section, a
shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section.
SECTION 4. Election of Directors: Except as provided in Section 6 of
this Article and in the articles of incorporation, the directors shall be
elected at the annual meeting of shareholders and those persons who receive the
highest number of votes shall be deemed to have been elected.
SECTION 5. Removal: Any director, or the entire board of directors,
may be removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least sixty-six and two-thirds percent
(66-2/3%) of the voting power of all shares then entitled to vote generally in
the election of directors. If a director is elected by a voting group of
shareholders, only members of that voting group may participate in the vote to
remove him. A director may not be removed by the shareholders at a meeting
unless the notice of the meeting specifies such removal as one of its purposes.
If any directors are removed, new directors may be elected at the same meeting.
SECTION 6. Vacancies: Any vacancy occurring in the board of directors,
including, without limitation, a vacancy resulting from an increase in the
number of directors or from the failure by the shareholders to elect the full
authorized number of directors, shall be filled only by the board of directors
or, if the directors remaining in office constitute fewer than a quorum of the
board, by the affirmative vote of a majority of the remaining directors or by
the sole remaining director. If the vacant office was held by a
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director elected by a voting group of shareholders, only the remaining director
or directors elected by that voting group are entitled to fill the vacancy. The
term of a director elected to fill a vacancy expires at the next meeting of
shareholders at which directors are elected.
SECTION 7. Compensation: The board of directors may compensate
directors for their services as such and may provide for the payment of all
expenses incurred by directors in attending regular and special meetings of the
board.
SECTION 8. Committees: The board of directors may create one or more
committees of the board, each of which shall have at least two (2) members, all
of whom shall be directors. The creation of a committee and the appointment of
members to it must be approved by a majority of all the directors in office
when the action is taken. Each committee may, as specified by the board of
directors, exercise some or all of the authority of the board except that a
committee may not: (i) authorize distributions; (ii) approve or propose to
shareholders action that the Act requires be approved by shareholders; (iii)
fill vacancies on the board of directors or on any of its committees; (iv)
amend the articles of incorporation pursuant to N.C. Gen. Stat. Section
55-10-02 or its successor; (v) adopt, amend, or repeal bylaws; (vi) approve a
plan of merger not requiring shareholder approval; (vii) authorize or approve a
reacquisition of shares, except according to a formula or method prescribed by
the board of directors; or (viii) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative rights,
preferences, and limitations of a class or series of shares, except that the
board of directors may authorize a committee to do so within limits
specifically prescribed by the board of directors. The provisions of Article V,
which govern meetings of the board of directors, shall likewise apply to
meetings of any committee of the board.
SECTION 9. Executive Committee: In accordance with Section 8 of this
Article, the board of directors shall designate an executive committee. The
chairman of the executive committee shall be appointed in accordance with the
provisions of Article VI, and he shall appoint a secretary of the committee,
who need not be from among its own members.
Subject to the provisions of Section 8 of this Article, the executive
committee may exercise all of the power of the board of directors during
intervals between meetings thereof, including but not limited to the power to
authorize the execution of contracts, deeds, leases, and other agreements
respecting real or personal property. Without limiting the generality of the
foregoing, it may fill vacancies occurring in any offices between meetings of
the board of directors and may create new offices and elect persons to fill
such offices, provided that vacancies in the offices of chairman of the board,
president, executive vice president, and chief financial officer may be filled
only by action of the board of directors. It shall consider and act upon any
matters submitted to it by the board of directors and shall advise the board of
directors in writing at the next regular meeting of the board in regard to its
acts.
The board of directors shall approve, disapprove, or modify the action
taken by the executive committee and shall record such action in the minutes of
the board meeting.
In the event of the death, prolonged absence, or the inability of the
chairman of the board to act, as determined by a majority of the remaining
executive committee members, the executive committee shall appoint an acting
chairman of the board who shall assume the duties and have the powers of the
chairman of the board until the board of directors elects a new chairman of the
board. The executive committee shall meet upon the call of the chairman of the
executive committee or, any two (2) of its members. The person or persons
calling the meeting shall cause reasonable notice to be given to all committee
members.
SECTION 10. Audit Committee: In accordance with Section 8 of this
Article, the board of directors shall designate an audit committee, which shall
be composed of directors who are not active officers or employees of the
Corporation. A chairman of the committee shall be designated by the board of
directors.
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The audit committee shall assure that there exist viable auditing
processes, both internal and independent, for the Corporation and its
subsidiary or affiliated companies. The committee shall recommend to the board
of directors the appointment of the independent auditors. The committee shall
maintain open lines of communication with internal auditors, external auditors,
and regulatory examiners, for the purposes of satisfying the committee that the
audit scope and program are not restricted, short of need; that management
takes appropriate and timely action on recommendations made by auditors or
examiners; and that corporate personnel cooperate with auditors and examiners.
The audit committee shall meet on call of the chairman of the
committee as the nature of business warrants and shall review and consider
reports of examination of regulatory agencies, management letters or other
comments of external auditors, reports of the general auditor, and any other
audit related business it considers appropriate. The chairman of the committee
shall report to the board of directors on any recommendations made by the
committee and on action taken by management on such recommendations.
SECTION 11. Compensation and Benefits Committee: In accordance with
Section 8 of this Article, the board of directors shall designate a
compensation and benefits committee. The chairman of the board and the
president of the Corporation shall be non-voting members of this committee; all
other members shall be directors who are not also officers of the Corporation.
As provided in Section 3 of Article VI, the compensation and benefits
committee shall fix the compensation and other benefits of all officers of the
Corporation except those officers who are also members of the executive or
compensation and benefits committees. The compensation and benefits committee
may delegate this duty to such person or persons as it may deem appropriate.
ARTICLE V
MEETINGS OF DIRECTORS
SECTION 1. Regular Meetings: Regular meetings of the board of
directors shall be held at such time and place, within or without the State of
North Carolina, as the board of directors shall fix by resolution. (As amended
January 23, 1995.)
SECTION 2. Special Meetings: Special meetings of the board of
directors may be called by or at the request of the chairman of the board, the
president, or any four (4) directors. Such meetings may be held either within
or without the State of North Carolina, as fixed by the person or persons
calling the meeting.
SECTION 3. Notice of Meetings: Regular meetings of the board of
directors may be held without notice. The person or persons calling a special
meeting of the board of directors shall, at least one (1) day before the
meeting, give notice of the meeting by any usual means of communication,
including by telephone, telegraph, teletype, mail, private carrier, facsimile
transmission, or other form of wire or wireless communication. Such notice may
be oral and need not specify the purpose for which the meeting is called.
SECTION 4. Waiver of Notice: Any director may waive notice of any
meeting either before or after such meeting. Such waiver shall be in writing,
signed by the director, and filed with the minutes or corporate records;
provided, however, that a director's attendance at or participation in a
meeting waives any required notice to him unless the director at the beginning
of the meeting (or promptly upon his arrival) objects to holding the meeting or
transacting business at the meeting and does not thereafter vote for or assent
to action taken at the meeting.
SECTION 5. Quorum. A majority of the directors fixed by these bylaws
shall constitute a quorum for the transaction of business at any meeting of the
board of directors.
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SECTION 6. Manner of Acting: The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is required by the articles of
incorporation or these bylaws.
SECTION 7. Presumption of Assent: A director of the Corporation who is
present at a meeting of the board of directors or a committee of the board of
directors when corporate action is taken is deemed to have assented to the
action taken unless: (i) he objects at the beginning of the meeting (or
promptly upon his arrival) to holding it or transacting business at the
meeting; (ii) his dissent or abstention from the action taken is entered in the
minutes of the meeting; or (iii) he files written notice of his dissent or
abstention with the presiding officer of the meeting before its adjournment or
with the Corporation immediately after adjournment of the meeting. This right
of dissent or abstention is not available to a director who votes in favor of
the action taken.
SECTION 8. Participation in Meetings: Any or all of the directors may
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication by which all directors participating may
simultaneously hear each other during the meeting.
SECTION 9. Action Without Meeting. Action which may be taken at a
board of directors meeting may be taken without a meeting if the action is
taken by all members of the board and is evidenced by one or more written
consents signed by each director before or after such action, which describes
the action taken and is included in the minutes or filed with the corporate
records. Such action is effective when the last director signs the consent,
unless the consent specifies a different effective date.
ARTICLE VI
OFFICERS
SECTION 1. Officers of the Corporation: The officers of the
Corporation shall consist of a chairman of the board, one or more vice chairmen
of the board, a chairman of the executive committee, a president, one or more
vice presidents, a chief financial officer, a secretary, one or more assistant
secretaries, a treasurer, one or more assistant treasurers, and such other
officers as the board of directors may from time to time appoint. There shall
also be a management group as provided in Section 6 of this Article. Any two or
more offices may be held by the same person, but no officer may act in more
than one capacity where action of two or more officers is required.
SECTION 2. Appointment and Term: The officers of the Corporation shall
be appointed by the board of directors. Each officer shall hold office until
his death, resignation, retirement, removal, disqualification or until his
successor is appointed and qualifies. The appointment of an officer does not
itself create contract rights for either the officer or the Corporation.
SECTION 3. Compensation of Officers: Except as otherwise provided in
these bylaws, the compensation of and other benefits provided to officers of
the Corporation shall be fixed by the compensation and benefits committee of
the board of directors or by such persons or persons to whom such duty has been
delegated by such committee; provided, however, that the compensation and
benefits of those officers who are members of the executive or compensation and
benefits committees of the board shall be fixed by the board of directors.
SECTION 4. Resignation and Removal: An officer may resign at any time
by communicating his resignation to the Corporation. A resignation is effective
when it is communicated unless it specifies in writing a later date. If a
resignation is made effective as of a later date and the Corporation accepts
the future effective date, the board of directors may fill the pending vacancy
before the effective date if the board provides that the successor does not
take office until the effective date. An officer's resignation does not affect
the Corporation's contract rights, if any, with the officer. Any officer or
agent appointed by the
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board of directors may be removed by the board at any time, with or without
cause, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed.
SECTION 5. Bonds: The board of directors may by resolution require any
officer, agent, or employee of the Corporation to give bond to the Corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of his respective office or position, and to comply with such other conditions
as may from time to time be required by the board of directors.
SECTION 6. Management Group: The management group of the Corporation
shall consist of four (4) persons. Initially, the members of the management
group shall be the chairman of the board, the senior executive vice president
for operations; the executive vice president for administration, and the chief
financial officer. Thereafter, the management group shall consist of such
officers as the board of directors shall designate. The management group shall
be responsible for defining the overall strategy, purpose, and direction of the
Corporation and overseeing and directing the central functions of the
Corporation, subject to the powers of the board of directors.
SECTION 7. Chief Executive, Chief Operating, and Chief Financial
Officers: The board of directors shall designate a chief executive officer. The
chief executive officer shall be responsible for carrying out the policies
adopted by the board of directors and the management group and shall consult
with the management group as to matters within the scope of the authority of
the management group. Initially, the chairman of the board shall be the chief
executive officer; thereafter, the chief executive officer shall be such
officer as the board of directors shall designate from time to time.
The board of directors shall also designate a chief operating officer.
The chief operating officer shall have general authority and supervision over
the operations of the Corporation and shall consult with the management group
as to matters within the scope of the authority of the management group. The
chief operating officer shall be such officer as the board of directors may
designate from time to time.
The board of directors shall also designate a chief financial officer.
The chief financial officer shall have general authority and supervision over
financial and accounting matters and shall consult with the management group as
to matters within the scope of the authority of the management group.
Initially, Rachel R. Selisker, a vice president and chief financial officer,
shall be the chief financial officer. Thereafter, the chief financial officer
shall be such officer as the board of directors shall designate from time to
time.
SECTION 8. Chairman of the Board: Initially, Dennis B. Gillings, Ph.D.
shall serve as chairman of the board. Thereafter, the chairman of the board
shall be such director as the board of directors shall designate from time to
time. The chairman of the board shall preside at all meetings of the board of
directors and the shareholders and shall perform such other duties as may be
prescribed from time to time by the board of directors. In the interim between
meetings of the board of directors, he may make appointments pro tem to offices
below the level of executive vice president, either for the purpose of filling
a vacancy or increasing the number of offices, such appointees to hold office
until the next succeeding regular or special meeting of the directors who may,
at that time, confirm or revoke such appointments. The chairman of the board
shall have the power to execute on behalf of the Corporation certificates for
shares, as well as any deeds, mortgages, contracts, or other instruments which
the board of directors has authorized to be executed, except in cases where the
signing and execution of such documents or instruments shall be expressly
delegated by the board of directors or by these bylaws to some other officer or
agent of the Corporation or shall be required by the Act to be otherwise signed
or executed. The chairman of the board shall make a report of the Corporation's
condition to the shareholders at their annual meeting and to the board of
directors at their regular meetings. He shall be an ex officio member of all
committees of the board of directors except the audit committee.
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SECTION 9. Vice Chairmen of the Board: Vice chairmen of the board, if
such officers are appointed by the board of directors, shall have such
authority and shall perform such duties as may be prescribed from time to time
by the board of directors or the chairman of the board.
SECTION 10. Chairman of the Executive Committee: The chairman of the
executive committee shall preside at all meetings of the executive committee of
the board of directors and shall have such other powers and shall perform such
other duties as may be prescribed from time to time by the board of directors.
Initially, the chairman of the board shall be the chairman of the executive
committee. Thereafter, the chairman of the executive committee shall be such
director as the board of directors shall designate from time to time.
SECTION 11. President: The president shall have general authority and
supervision over the officers and employers of the Corporation and shall
perform such other duties as may be prescribed from time to time by the board
of directors. All officers shall report to him except to the extent
specifically reserved by the chairman of the board. He shall consult with the
chairman of the board as to matters within the scope of the authority of the
chairman of the board. He shall have the authority to sign certificates for
shares, as well as any deeds, mortgages, contracts, or other instruments which
the board of directors has authorized to be executed, except in cases where the
signing and execution of such contracts or instruments shall be expressly
delegated by the board of directors or by these bylaws to some other officer or
agent of the Corporation, or shall be required by the Act to be otherwise
signed or executed.
SECTION 12. Vice Presidents: Vice presidents shall be designated as
senior executive vice presidents, executive vice presidents, senior vice
presidents and assistant vice presidents. In the absence of the president, the
vice presidents in the order determined by the board of directors, or in the
absence thereof, in the order of seniority of senior executive vice presidents,
executive vice presidents, senior vice presidents and assistant vice
presidents, respectively, shall perform the duties of the president, and when
so acting shall have all the powers of and be subject to all the restrictions
upon that office. Any vice president may sign certificates for shares, as well
as any deeds, mortgages, contracts, or other instruments which the board of
directors has authorized to be executed, except in cases where the signing and
execution of such documents or instruments shall be expressly delegated by the
board of directors or these bylaws to some other officer or agent of the
Corporation or shall be required by the Act to be otherwise signed or executed.
A vice president shall perform such other duties as from time to time may be
assigned to him by the chairman of the board, the president, or the board of
directors.
SECTION 13. Secretary: The secretary shall: (i) keep the minutes of
the meetings of shareholders, of the board of directors, and of all committees
of the board in one or more books provided for that purpose; (ii) see that all
notices are duly given in accordance with the provisions of these bylaws or as
required by law; (iii) be custodian of the seal of the Corporation and see that
the seal of the Corporation is affixed to all documents the execution of which
on behalf of the Corporation under its seal is duly authorized; (iv) keep a
register of the mailing address of each shareholder which shall be furnished to
the secretary by such shareholder; (v) sign, with the chairman of the board,
the president, or a vice president, certificates for shares, the issuance of
which shall have been authorized by resolution of the board of directors; (vi)
have general charge of the stock transfer books of the Corporation; (vii) keep
or cause to be kept in the State of North Carolina at the Corporation's
principal office a record of the Corporation's shareholders, giving the names
and addresses of all shareholders and the number and class of shares held by
each, and prepare or cause to be prepared a shareholder list prior to each
meeting of shareholders as required by the Act; (viii) maintain and
authenticate the books and records of the Corporation; (ix) with the assistance
of the treasurer and other officers, prepare and deliver to the Corporation's
shareholders such financial statements, notices, and reports as may be required
by N.C. Gen. Stat. Sections 55-16-20 and 55-16-21 (or their successors); (x)
prepare and file with the North Carolina Secretary of State the annual report
required by N. C. Gen. Stat. Section 55-1622 (or its successor); and (xi) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the chairman of the
board, the president, or the board of directors.
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SECTION 14. Assistant Secretaries: In the absence of the secretary,
the assistant secretaries in the order of their length of service as assistant
secretary, unless otherwise determined by the board of directors, shall perform
the duties of the secretary, and when so acting shall have all the powers of
and be subject to all the restrictions upon the secretary. They shall perform
such other duties as may be assigned to them by the secretary, the chairman of
the board, the president, or the board of directors. Any assistant secretary
may sign, with the chairman of the board, the president, or a vice president,
certificates for shares.
SECTION 15. Treasurer: The treasurer shall: (i) have charge and
custody of and be responsible for all funds and securities of the Corporation;
(ii) receive and give receipts for monies due and payable to the corporation
from any source whatsoever, and deposit all such monies in accordance with the
provisions of Section 4 of Article VII; (iii) prepare, or cause to be prepared,
an annual financial statement in accordance with Section 3 of Article IX; and
(iv) in general, perform all of the duties incident to the office of treasurer
and such other duties as from time to time may be assigned to him by the
chairman of the board, the president, or the board of directors. The treasurer
may sign, with the chairman of the board, the president, or a vice president,
certificates for shares.
SECTION 16. Assistant Treasurer: In the absence of the treasurer, the
assistant treasurers, in the order of their length of service as assistant
treasurer, unless otherwise determined by the board of directors, shall perform
the duties of the treasurer, and when so acting shall have all the powers of
and be subject to all the restrictions upon the treasurer. They shall perform
such other duties as may be assigned to them by the treasurer, the chairman of
the board, the president, or the board of directors. Any assistant treasurer
may sign, with the chairman of the board, the president, or a vice president,
certificates for shares.
ARTICLE VII
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts: The board of directors may authorize any officer
or agent to enter into any contract or to execute and deliver any instrument on
behalf of the Corporation, and such authority may be general or confined to
specific instances.
SECTION 2. Loans: No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
SECTION 3. Checks and Drafts: All checks, drafts or other orders for
payment of money issued in the name of the Corporation shall be signed by such
officers or agents of the Corporation and in such manner as shall from time to
time be determined by resolution of the board of directors.
SECTION 4. Deposits: All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such depositories as the board of directors shall direct.
ARTICLE VIII
CERTIFICATES FOR SHARES AND THEIR TRANSFERS
SECTION 1. Certificates for Shares: Shares may, but need not, be
represented by certificates. If certificates are issued, they shall be in such
form as the board of directors shall determine; provided that, at a minimum,
each certificate shall state on its face: (i) the name of the Corporation and
that it is organized under the laws of North Carolina; (ii) the name of the
person to whom issued; and (iii) the number and class of shares and the
designation of the series, if any, the certificate represents. If the
Corporation issues certificates for shares of preferred stock, the
designations, relative rights, preferences, and limitations
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applicable to that class, and the variations in rights, preferences, and
limitations for each series within that class (and the authority of the board
of directors to determine variations for future series) must be summarized on
the front or back of each certificate; alternatively, each certificate may
state conspicuously on its front or back that the Corporation will furnish the
shareholder this information in writing and without charge. These certificates
shall be signed, either manually or in facsimile, by the chairman of the board,
the president, or any vice president, and the secretary, any assistant
secretary, the treasurer or any assistant treasurer. They shall be
consecutively numbered or otherwise identified and the name and address of the
persons to whom they are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation.
SECTION 2. Transfer of Shares: Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record, by his legal representative (who shall furnish proper evidence of
authority to transfer) or by his attorney (whose authority shall be evidenced
by a power of attorney duly executed and filed with the secretary), and only
upon surrender for cancellation of the certificates for such shares.
SECTION 3. Fixing Record Date: For the purpose of determining
shareholders entitled to receive notice of a shareholders meeting, to demand a
special meeting, to vote, to take any other action, or to receive payment, or
for any other purpose, the board of directors may fix in advance a date as the
record date for any such determination of shareholders, such record date in any
case to be not more than seventy (70) days, and, in case of a meeting of
shareholders, not less than ten (10) days, before the date on which the
particular action requiring such determination of shareholders is to be taken.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders, or of shareholders entitled
to receive a distribution, the day before the first notice of the meeting is
mailed or the day on which the board of directors authorize the distribution,
as the case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to notice of or to vote
at any meeting of shareholders has been made as provided in this Section, such
determination shall apply to any adjournment of such meeting unless the board
of directors fixes a new record date, which it must do if the meeting is
adjourned to a date more than 120 days after the date fixed for the original
meeting.
SECTION 4. Lost Certificates: The board of directors may authorize the
issuance of a new share certificate in place of a certificate claimed to have
been lost or destroyed, upon receipt of an affidavit of such fact from the
person claiming the loss or destruction. When authorizing the issuance of a new
certificate, the board may require the claimant to give the Corporation a bond
in such sum as it may direct to indemnify the Corporation against loss from any
claim with respect to the certificate claimed to have been lost or destroyed;
or the board may, by resolution reciting that the circumstances justify such
action, authorize the issuance of the new certificate without requiring such a
bond.
SECTION 5. Reacquired Shares: A corporation may acquire its own shares
and shares so acquired constitute authorized but unissued shares.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. Distributions: The board of directors may from time to time
declare, and the Corporation may make, distributions on its outstanding shares
in the manner and subject to the terms and conditions provided by the Act and
by the articles of incorporation.
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SECTION 2. Seal: The corporate seal of the Corporation shall consist
of two concentric circles between which is the name of the Corporation and in
the center of which is inscribed "CORPORATE SEAL" or "SEAL," and which shall
have such other characteristics as the board of directors may determine.
SECTION 3. Records and Reports: All of the Corporation's records shall
be maintained in written form or in another form capable of conversion into
written form within a reasonable time.
The Corporation shall keep as permanent records minutes of all
meetings of its incorporators, shareholders, and board of directors, a record
of all actions taken by the shareholders or board of directors without a
meeting, and a record of all actions taken by a committee of the board of
directors in place of the board of directors.
The Corporation shall keep a copy of the following records at its
principal office: (i) the articles of incorporation and all amendments to them
currently in effect; (ii) these bylaws and all amendments to them currently in
effect; (iii) resolutions adopted by its board of directors creating one or
more classes or series of shares and fixing their relative rights, preferences,
and limitations, (if shares issued pursuant to those resolutions are
outstanding); (iv) the minutes of all shareholders meetings and records of all
actions taken by shareholders without a meeting during the past three years;
(v) all written communications to shareholders generally within the past three
years; (vi) the annual financial statements described below, prepared during
the past three years; (vii) a list of the names and business addresses of its
current directors and officers; and (viii) its most recent annual report
delivered to the North Carolina Secretary of State.
The Corporation shall prepare and make available to its shareholders
annual financial statements for the Corporation and its subsidiaries that: (i)
include a balance sheet as of the end of the fiscal year, an income statement
for that year, and a statement of cash flows for that year; and (ii) are
accompanied by either (x) a report of a public accountant on the annual
financial statements, or (y) a statement by the chief financial officer or
treasurer stating his reasonable belief whether the annual financial statements
were prepared on the basis of generally accepted accounting principles (and, if
not, describing the basis of preparation) and describing any respects in which
the statements were not prepared on a basis of accounting consistent with the
statements prepared for the preceding year. These annual financial statements,
or a written notice of their availability, shall be mailed to each shareholder
within 120 days after the close of each fiscal year of the Corporation. On
written request from a shareholder who was not mailed the annual financial
statements, the Corporation shall mail to him the latest such statements.
The Corporation shall also prepare and file with the North Carolina
Secretary of State an annual report in such form as required by N.C. Gen. Stat.
ss 55-16-22, or its successor.
SECTION 4.01. Right to Indemnification: Each person who was or is a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal (hereinafter, a "proceeding" and including without
limitation, a proceeding brought by or on behalf of the Corporation itself), by
reason that he is or was a director or officer of the Corporation, or was
serving at the request of the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or as a trustee or
administrator under an employee benefit plan, whether the basis of such
proceeding is alleged action in an official capacity as a director or officer
or in any other capacity while serving as a director, officer, partner,
trustee, employee, agent, trustee or administrator, shall be indemnified and
held harmless by the Corporation to the fullest extent authorized by the Act as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than the Act permitted the Corporation
to provide prior to such amendment) against all expense, liability and loss
(including attorney's fees, judgements, fines, excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall continue as
to a person who has ceased to serve in the capacity that initially entitled
such person to indemnification hereunder and shall inure to the benefit of his
heirs, executors and administrators; provided, however, that
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the Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the board of directors of
the Corporation. The right to indemnification conferred in this Article shall
be a contract right and shall include the right to be paid by the Corporation
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, if the Act so requires, the payment of
expenses incurred by a director or officer in his capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it shall ultimately be determined that the director or officer
is not entitled to be indemnified under this Section or otherwise.
SECTION 4.02. Right of Claimant to Bring Suit: If a claim under
Section 4.01 hereof is not paid in full by the Corporation within ninety (90)
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action brought to enforce
a claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Act for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or its
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Act, nor
an actual determination by the Corporation (including its board of directors,
independent legal counsel, or its shareholders) that the claimant has not met
the applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
SECTION 4.03. Nonexclusivity of Rights: The right to indemnification
and the advancement and payment of expenses conferred in this Article shall not
be exclusive of any other right which any person may have or hereafter acquire
under any law (common or statutory), the Corporation's articles of
incorporation, these bylaws, any agreement, the vote of shareholders or
disinterested directors or otherwise.
SECTION 4.04. Insurance: The Corporation may maintain insurance, at
its expense, to protect itself and any person who is or was serving as a
director, officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise or trustee or administrator under an
employee benefit plan against any liability asserted against and incurred by
that person in any such capacity, or arising out of his status as such, whether
or not the Corporation would have the power to indemnify that person against
such liability under the Act.
SECTION 4.05. Savings Clause. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify and hold harmless each director
and officer of the Corporation, as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the full extent permitted
by applicable law.
SECTION 5. Fiscal Year: The fiscal year of the Corporation shall be
fixed by the board of directors.
SECTION 6. Amendments: (a) The board of directors may amend or repeal
these bylaws, except to the extent otherwise provided in the articles of
incorporation, a bylaw adopted by the shareholders, or the
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Act, and except that a bylaw adopted, amended or repealed by the shareholders
may not be readopted, amended or repealed by the board of directors if neither
of the articles of incorporation nor a bylaw adopted by the shareholders
authorizes the board of directors to adopt, amend, or repeal that particular
bylaw or the bylaws generally; provided, however, the original adoption of
these bylaws by the shareholders shall not preclude the board of directors from
thereafter readopting, amending, or repealing these bylaws.
(b) The Corporation's shareholders may adopt, amend, alter,
change, or repeal any of these bylaws; provided that, in addition to any
requirements of the Act (and notwithstanding the fact that a lesser percentage
may be specified in the Act), the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all shares
then entitled to vote generally in the election of directors, voting together
as a single class, shall be required for the shareholders to adopt, amend,
alter, change, or repeal any of these bylaws.
(c) A bylaw that fixes a greater quorum or voting requirement
for the board of directors may be amended or repealed: (i) if originally
adopted by the shareholders, only by the shareholders, unless the bylaw permits
amendment or repeal by the board of directors; or (ii) if originally adopted by
the board of directors, either by the shareholders or by the board of
directors.
(d) A bylaw referred to in Sub-Section (c) above: (i) may not
be adopted by the board of directors by a vote of less than a majority of the
directors then in office; and (ii) may not itself be amended by a quorum or
vote of the directors less than the quorum or vote therein prescribed or
prescribed by a bylaw adopted or amended by the shareholders.
SECTION 7. Opt-Out of North Carolina Shareholder Protection Act: The
provisions of the North Carolina Shareholder Protection Act shall not be
applicable to the Corporation.
SECTION 8. Opt-Out of North Carolina Control Share Acquisition Act:
The provisions of the North Carolina Control Share Acquisition Act shall not be
applicable to the Corporation.
SECTION 9. Emergencies: In anticipation of or during an emergency, the
board of directors may: (i) modify lines of succession to accommodate the
incapacity of any director, officer, employee, or agent; and (ii) relocate the
principal office or designate alternative principal or regional offices, or
authorize the officers to do so.
During an emergency: (i) notice of a meeting of the board of directors
need be given only to those directors whom it is practicable to reach and may
be given in any practicable manner, including by publication and radio; and
(ii) one or more officers present at a meeting of the board of directors may be
deemed to be directors for the meeting, in order of rank and within the same
rank in order of seniority, as necessary to achieve a quorum.
SECTION 10. Severability: Should any provision of these bylaws become
ineffective or be declared to be invalid for any reason, such provision shall
be severable from the remainder of these bylaws and all other provisions of
these bylaws shall continue to be in full force and effect.
ATTESTED:
Date:
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