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EXHIBIT 4.2
E.SPIRE COMMUNICATIONS, INC.
AMENDED AND RESTATED BY-LAWS/
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of e.spire
Communications, Inc. (the "Corporation") in the State of Delaware shall be at
1209 Orange Street, City of Wilmington, County of New Castle, and the registered
agent in charge thereof shall be The Corporation Trust Company.
SECTION 2. Other Offices. The Corporation may also have an office or
offices at other place or places within or without the State of Delaware.
ARTICLE II
MEETINGS OF STOCKHOLDERS; STOCKHOLDERS'
CONSENT IN LIEU OF MEETING
SECTION 1. Annual Meeting. The annual meeting of the stockholders (unless
the context clearly requires otherwise, the term "Stockholders" as used herein
shall refer to all holders of the Corporation's securities which then have
voting rights) for the election of directors, and for the transaction of such
other business as may properly come before the meeting, shall be held at such
place, date and hour as shall be fixed by the Board of Directors (the "Board")
and designated in the notice or waiver of notice thereof; except that no annual
meeting need be held if all actions, including the election of directors,
required by the General Corporation Law of the State of Delaware to be taken at
a stockholders' annual meeting are taken by written consent in lieu of meeting
pursuant to Section 10 or this Article II.
SECTION 2. Special Meetings. A special meeting of the stockholders for
any purpose or purposes may be called by the Board, the Chairman, the President
or the holders of at least 12.5% of the Corporation's voting
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//As amended by unanimous consent of the Board of Directors on July 2, 1997.
Further amended by a Board of Directors meeting on September 22, 1997. And,
further amended by the Board of Directors on November 23, 1998, April 1, 1999,
April 13, 1999,October 29, 1999, January 18, 2000 and May 31, 2000.
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stock, to be held at such place, date and hour as shall be designated in the
notice thereof. Special meetings of the stockholders may also be called and
convened as provided in the Certificate of Incorporation.
SECTION 3. Notice of Meetings. Except as otherwise required by statute or
by the Certificate of Incorporation or these By-laws, notice of each annual or
special meeting of the stockholders shall be given to each stockholder of record
entitled to vote at such meeting not less than 10 or more than 60 days before
the day on which the meeting is to be held, by delivering a typewritten or
printed notice thereof to him personally, or by mailing a copy of such notice,
postage prepaid, directly to each such stockholder at his address as it appears
in the records of the Corporation, or by transmitting notice thereof to him at
such address by telegraph, cable or radio. Every such notice shall state the
place and the date and hour of the meeting, and, in case of a special meeting,
the purpose or purposes for which the meeting is called. Notice of any meeting
of stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy, or who shall, in person or by
attorney thereunto authorized, waive such notice in writing, either before or
after such meeting. Except as otherwise provided in these By-laws, neither the
business to be transacted at, nor the purpose of, any meeting of the
stockholders need be specified in any such waiver of notice. Notice of any
adjourned meeting of stockholders shall not be required to be given, except when
expressly required by law.
SECTION 4. Quorum. At each meeting of the stockholders, except where
otherwise provided by the Certificate of Incorporation or these By-Laws, the
holders of a majority of the issued and outstanding shares of stock of the
Corporation entitled to vote at such meeting, present in person or represented
by Proxy shall constitute a quorum for the transaction of business. In the
absence of a quorum, a majority in interest of the stockholders present in
person or represented by proxy and entitled to vote, or, in the absence of all
the stockholders entitled to vote, any officer entitled to preside at, or act as
secretary of such meeting, shall have the power to adjourn the meeting from time
to time, until stockholders holding the requisite amount of stock shall be
present or represented. At any such adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been transacted at the
meeting as originally called.
SECTION 5. Organization. At each meeting of the stockholders, one of the
following shall act as chairman of the meeting and preside thereat, in the
following order of precedence:
(a) the Chairman of the Board, if any;
(b) the President;
(c) any other officer of the Corporation designated by the Board
of Directors to act as chairman of such meeting and to preside thereat if
the Chairman of the Board, if any, or the President shall be absent from
such meeting.
The Secretary, or if he shall be presiding over the meeting in accordance with
the provisions of this Section, or if he shall be absent from such meeting, the
person whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
SECTION 6. Order or Business. The order of business at each meeting of
the stockholders shall be determined by the chairman of such meeting, but such
order of business may be changed by a majority in
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voting interest of those present in person or by proxy at such meeting and
entitled to vote thereat.
SECTION 7. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation or these By-laws, at each meeting of the
stockholders, every stockholder of the Corporation shall be entitled to one vote
in person or by proxy for each share of common stock of the corporation held by
him and registered in his name on the books of the Corporation:
(a) on the date fixed pursuant to Section 7 of Article V as the
record date for the determination of stockholders entitled to vote at
such meeting; or
(b) if no such record date shall have been fixed, at the close of
business on the day next preceding the day on which notice is given, or,
if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held.
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of such meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting. Only the record holders of the Corporation's stock or their proxies
will be entitled to vote such shares. If shares or other securities having
voting power stand in the record of two or more persons, whether fiduciaries,
members of a partnership, joint tenants, tenants in common, tenants by the
entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary shall be given the
written notice to the contrary and shall be furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(a) if only one votes, his act binds all;
(b) if more than one votes, the act of the majority so voting
binds all; and
(c) if more than one votes, but the vote is evenly split on any
particular matter, such shares shall be voted in the manner provided by
law.
If the instrument so filed shows that any such tenancy is held in unequal
interests, a majority or even-split for the purposes of this Section shall be
the majority or even-split in interest. The Corporation shall not vote directly
or indirectly any share of its own capital stock. Any vote of stock may be given
by the stockholder entitled thereto in person or by his proxy appointed by an
instrument in writing, subscribed by such stockholder or by his attorney
thereunto authorized, delivered to the secretary of the meeting; provided,
however, that no proxy shall be voted after three years from its date, unless
said proxy provides for a longer period. At all meetings of the stockholders,
all matters (except where other provision is made by law, by the Certificate of
Incorporation or these By-laws) shall be decided by the vote of a majority in
interest of the stockholders present in person or by proxy at such meeting and
entitled to vote thereon, a quorum being present. Unless demanded by a
stockholder present in person or by proxy at any meeting and entitled to vote
thereon, the vote on any question need not be by ballot. Upon a demand by any
such stockholder for a vote by ballot upon any question, such vote by ballot
shall be taken. On a vote by ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and shall state the
number of shares voted.
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SECTION 8. Inspection. The chairman of the meeting may at any time
appoint two or more inspectors to serve at any meeting of the stockholders. Any
inspector may be removed, and a new inspector or inspectors may be appointed by
the Board at any time. Such inspectors shall decide upon the qualifications of
voters, accept and count the votes for and against the matter to be voted upon,
respectively, declare the results of such vote, and subscribe and deliver to the
secretary of the meeting a certificate stating the number of shares of stock
issued and outstanding and entitled to vote thereon and the number of shares
voted for and against the matter to be voted upon, respectively. The inspectors
need not be stockholders of the Corporation, and any director or officer of the
Corporation may be an inspector on any question other than a vote for or against
his election to any position with the Corporation or on any other question in
which he may be directly interested. Before acting as herein provided, each
inspector shall subscribe an oath faithfully to execute the duties of an
inspector with strict impartiality and according to the best of his ability.
SECTION 9. List of Stockholders. It shall be the duty of the Secretary or
other officer of the Corporation who shall have charge of its stock ledger to
prepare and make, at least 10 days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to any such meeting,
during ordinary business hours, for a period of at least 10 days prior to such
meeting, either at a place within the city where such meeting is to be held,
which place shall be specified in the notice of the meeting or, if not so
specified, at the place where the meeting is to be held. Such list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
SECTION 10. Stockholders' Consent In Lieu of Meeting. Subject to the
requirements of the Certificate of Incorporation, any action required by law to
be taken at any annual or special meeting of the stockholders of the
Corporation, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear the date of
signature of each stockholder who signs the consent and the number of shares
which the stockholder is entitled to vote. No written consent shall be effective
to take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered in the manner required by law to the
Corporation, written consents signed by a sufficient number of holders to take
action are delivered to the Corporation by delivery to its registered office in
Delaware, its principal place of business, or an officer or an agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
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ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The business, property and affairs of the
Corporation shall be managed by the Board, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are not by law or by
the Certificate of Incorporation directed or required to be exercised or done by
the stockholders.
SECTION 2. Number and Term of Office. The number of directors shall be
eight or as otherwise provided in the Certificate of Incorporation. Except as
otherwise provided in the Certificate of Incorporation, each Director shall hold
office for a term expiring at the next annual meeting of shareholders or until
his earlier death, removal or resignation.
Section 3. Election of Directors. Except as otherwise provided by the
Certificate of Incorporation, at each meeting of the stockholders for the
election of directors at which a quorum is present, the persons receiving the
greatest number of votes, up to the number of directors to be elected, of the
stockholders present in person or by proxy and entitled to vote thereon shall be
the directors. Unless an election by ballot shall be demanded as provided in
Section 7 of Article II, election of directors be conducted in any manner
approved at such a meeting.
Section 4. Resignation, Removal and Vacancies. Any director may resign at
any time by giving written notice to the Board, the Chairman, if any, the
President or the Secretary. Such resignation shall take effect at the time
specified thereon or, if the time be not specified, upon receipt thereof; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Any or all directors may be removed, with or without cause, at any time
by vote of the holders of a majority of the shares then entitled to vote for
such directors at an election of directors, or by written consent of the
stockholders entitled to vote for such directors pursuant to Section 10 of
Article II.
Any vacancy caused by the death or resignation of a director may be
filled by the stockholders in the manner provided in the Certificate of
Incorporation of the Corporation and these By-laws, or may be filled by a vote
of the directors elected by the stockholders.
SECTION 5. Meetings.
(A) Annual Meeting. As soon as practicable after each annual election of
directors, the Board shall meet for the purpose of organization and the
transaction of other business, unless it shall have transacted all such business
by written consent pursuant to Section 6 of this Article III.
(B) Other Meetings. Other meetings of the Board shall be held at such
times and places as the Board, the Chairman, if any, or the President shall from
time to time determine.
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(C) Notice of Meetings. The Secretary shall give notice to each director
of each meeting, including the time, place and purpose of such meeting. Notice
of each such meeting shall be mailed to each director, addressed to him at his
residence or usual place of business, at least two days before the day on which
such meeting is to be held, or shall be sent to him at such place by facsimile,
telegraph, cable, wireless or other form of recorded communication, or be
delivered personally or by telephone not later than the day before the day on
which such meeting is to be held, but notice need not be given to any director
who attends such meetings. A written waiver of notice, signed by the person
entitled thereto, whether before or after the time of the meeting stated
therein, shall be deemed equivalent to notice.
(D) Place of Meetings. The Board may hold its meetings at such place or
places within or without the State of Delaware as the Board may from time to
time determine, or as shall be designated in the respective notices or waivers
of notice thereof.
(E) Quorum and Manner of Acting. Except as otherwise required by the
Certificate of Incorporation, a majority of the total number of directors then
in office (but not less than two if the number of Directors is greater than one)
shall be present in person at any meeting of the Board in order to constitute a
quorum for the transaction of business at such meeting, and except as otherwise
required by the Certificate of Incorporation or by law, the vote of a majority
of those directors present at any such meeting at which a quorum is present
shall be necessary for the passage of any resolution or act of the Board.
(F) Organization. At each meeting of the Board, one of the following
shall act as chairman of the meeting and preside, in the following order of
precedence
(a) the Chairman of the Board, in any;
(b) the President (if a director);
(c) any director chosen by a majority of the directors present.
The Secretary or, in the case of his absence, any person (who shall be an
Assistant Secretary, if an Assistant Secretary is present) whom the Chairman
shall appoint shall act as secretary of such meeting and keep the minutes
thereof.
SECTION 6. Directors' Consent in Lieu of Meeting. Any action required or
permitted to be taken at any meeting of the Board may be taken without a
meeting, without prior notice, without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by all the directors and such consent
is filed with the minutes of the proceedings of the Board.
SECTION 7. Action by Means of Conference Telephone or Similar
Communications Equipment. Any one or more members of the Board may participate
in a meeting of the Board by means of conference telephone or similar
communications equipment by which all persons participating in the meeting can
hear each other, and participation in a meeting by such means shall constitute
presence in person at such meeting.
SECTION 8. Committees of the Board. The Board may, by resolution passed
by a majority of the whole Board, designate one 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 any absent or disqualified member at any meeting of the
committee. In the absence or
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disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board 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, shall
have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-laws of the Corporation; and, unless the resolution
designating it expressly so provides, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock.
Without limiting the generality of the foregoing, the board of directors
shall establish and maintain a compensation committee comprised of three
directors, none of whom may be an employee of the Company or any of its
subsidiaries. The compensation committee shall be responsible for recommending
to the full board of directors all stock option grants, bonuses and other
compensation arrangements for executives and key employees and loans and other
non-salary payments and other benefits and arrangements with employees and
affiliates and associates of the Company. The compensation committee shall have
such additional powers and duties as the board of directors from time to time
determines.
The board of directors shall establish and maintain an audit committee
comprised of three directors. The audit committee shall be responsible for
selecting the Company's independent auditors and reviewing their audit, as well
as reviewing and approving the Company's internal controls and accounting
systems. The audit committee shall have such additional powers and duties as the
board of directors from time to time determines. [The audit committee shall be
governed by the Charter of the Audit Committee of the Board of Directors of
e.spire Communications, Inc.(the "Audit Committee Charter") attached hereto as
Exhibit A. In any instances in which this Section 8 of Article III and the Audit
Committee Charter conflict, the provisions of Audit Committee Charter shall
govern.
In the event that the group of directors of the Company that are
specified to select a committee member as provided herein is deadlocked over its
selection of such committee member for more than 30 days, the full board of
directors shall select such committee member from among such group of directors.
ARTICLE IV
OFFICERS
SECTION 1. Executive Officers. The executive officers of the Corporation
shall be a Chief Executive Officer, a President, a Chief Financial Officer, a
Secretary and a Treasurer and may include a Chairman of the Board, a Chief
Operating Officer and such other officers as the Board may appoint pursuant to
Section 3 of this Article IV. Any two or more offices may be held by the same
person, provided that the offices of President and Secretary shall be held by
different persons.
SECTION 2. Authority and Duties. All officers as between themselves and
the Corporation, shall have
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such authority and perform such duties in the management of the Corporation as
may be provided in these By-laws or, to the extent so provided, by the Board.
SECTION 3. Other Officers. The Corporation may have such other officers,
agents and employees as the Board may deem necessary, including one or more
Vice-Presidents, one or more Assistant Secretaries and one or more Assistant
Treasurers, each of whom shall hold office for such period, have such authority,
and perform such duties as the Board, the Chief Executive Officer, the
President, or the Chief Operating Officer may from time to time determine. The
Board may delegate to any executive officer the power to appoint or remove any
such officer, agents or employees.
SECTION 4. Term of Office, Resignation and Removal. All officers shall
be elected or appointed by the Board and shall hold office for such term as may
be prescribed by the Board. Each officer shall hold office until his successor
has been elected or appointed and qualified or his earlier death or resignation
or removal in the manner hereinafter provided. The Board may require any officer
to give security for the faithful performance of his duties.
Any officer may resign at any time by giving written notice to the Board
or to the Chief Executive officer, or to the President or to the Chief Operating
Officer, or to the Secretary, and such resignation shall take effect at the time
specified therein or, if the time when it shall become effective is not
specified therein, at the time it is accepted by action of the Board. Except as
aforesaid, the acceptance of such resignation shall not be necessary to make it
effective.
All officers and agents elected or appointed by the Board shall be
subject to removal at any time by the Board with or without cause.
SECTION 5. Vacancies. If the office of the Chief Executive Officer, the
President, Chief Financial Officer, the Secretary or the Treasurer or any other
office becomes vacant for any reason, the Board shall fill such vacancy or may
elect not to fill such vacancy. An officer so appointed or elected by the Board
shall serve only until such time as the unexpired term of his predecessor shall
have expired unless reelected or reappointed by the Board.
SECTION 6. Chairman of the Board. If there shall be a Chairman of the
Board, he shall, unless provided otherwise by the Board by resolution, preside
at meetings of the Board and of the stockholders at which he is present, and
shall give counsel and advice to the Board and the officers of the Corporation
on all subjects concerning the welfare of the Corporation and the conduct of its
business. He shall perform such other duties as the Board may from time to time
determine.
SECTION 7. The Chief Executive Officer. The Chief Executive Officer
shall be the most senior officer of the Corporation and unless the Chairman of
the Board be appointed and present or the Board has provided otherwise by
resolution, he shall preside at all meetings of the Board and the stockholders
at which is he present. He shall have responsibility for the short and long term
strategy of the Corporation, corporate development and investor relations and
shall cause decisions concerning the attainment of strategic, corporate
development and investor relations' objectives to be implemented.
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SECTION 8. The President. The President, unless the Chairman of the
Board be appointed and present, or the Chief Executive Officer be appointed and
present or the Board has provided otherwise by resolution shall preside at all
meetings of the Board and the stockholders at which he is present. He shall,
along with the Chief Operating Officer (if one is appointed by the board), have
the day-to-day, general and active management and control of the business and
affairs of the Corporation subject to the control of the Chief Executive Officer
and subject to the control of the Board, and shall see that all orders of the
Chief Executive Officer and orders and resolutions of the Board are carried into
effect.
SECTION 9. The Chief Operating Officer. He shall, along with the
President, have the day-to-day, general and active management and control of the
business and affairs of the Corporation subject to the control of the Chief
Executive Officer and subject to the control of the Board, and shall see that
all orders of the Chief Executive Officer and orders and resolutions of the
Board are carried into effect.
SECTION 10. Chief Financial Officer. He shall have responsibility for
the financial matters of the Corporation, including the books and records, and
such other responsibilities as determined by the Board.
SECTION 11. Vice-President. A Vice-President, which officer may have
such additional designations such as "Executive" or "Senior" as the Board may
provide, shall perform such duties as may be prescribed by the Board, the Chief
Executive Officer, the President, or Chief Operating Officer under whose
supervision he shall act.
SECTION 12. The Secretary. The Secretary shall, to the extent
practicable, attend all meetings of the Board and all meetings of the
stockholders and shall record all votes and the minutes of all proceedings in a
book to be kept for that purpose. He shall give, or cause to be given, notice of
all meetings of the stockholders and of the Board, and shall perform such other
duties as may be prescribed by the Board, the Chief Executive Officer, or the
President or Chief Operating Officer, under whose supervision he shall act. He
shall keep in safe custody the seal of the Corporation and affix the same to any
duly authorized instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or, in appointed,
an Assistant Secretary or an Assistant Treasurer. He shall keep, or cause the
Corporation's transfer agent and registrar to keep, in safe custody the
certificate books and stockholder records and such other books and records as
the Board may direct and shall perform all other duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Chief Executive Officer, President, Chief Operating Officer of the Board.
SECTION 13. The Treasurer. The Treasurer shall have the care and custody
of the corporate funds and other valuable effects, including securities, and
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the Board. The Treasurer shall disburse the funds of the
corporation as may be ordered by the Chief Executive Officer, President, Chief
Financial Officer, or the Board, taking proper vouchers for such disbursements,
and shall render to the Chief Executive Officer, President and Chief Financial
Officer, Chief Operating Officer and the Board, at the regular meetings of the
Board, or whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the Corporation; and, in general
perform all the duties incident to the office of Treasurer and such other duties
as from time to time may be assigned to him by the Chief
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Executive Officer, President, Chief Financial Officer, Chief Operating Officer,
or the Board.
ARTICLE V
SHARES AND THEIR TRANSFER; FIXING RECORD DATE
SECTION 1. Certificates for Shares. Every owner of stock of the
Corporation shall be entitled to have a certificate certifying the number and
class of shares owned by him in the Corporation, which shall otherwise be in
such form as shall be prescribed by the Board. Certificates shall be issued in
consecutive order and shall be numbered in the order of their issue, and shall
be signed by, or in the name of, the Corporation by the Chairman, if any, the
President or any Vice President and by the Treasurer (or an Assistant Treasurer,
if appointed) or the Secretary (or an Assistant Secretary, if appointed). In
case any officer or officers who shall have signed any such certificate or
certificates shall cease to be such officer or officers of the Corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate had not
ceased to be such officer or officers of the Corporation.
SECTION 2. Record. A record (herein called the stock record) in one or
more counterparts shall be kept of the name of the person, firm or corporation
owning the shares represented by each certificate for stock of the Corporation
issued, the number of shares represented by each such certificate, the date
thereof and, in the case of cancellation, the date of cancellation. Except as
otherwise expressly required by law, the person in whose name shares of stock
stand on the stock record of the Corporation shall be deemed the owner thereof
for all purposes as regards the Corporation.
SECTION 3. Transfer and Registration of Stock.
(a) The transfer of stock and certificates of stock which represent the
stock of the Corporation shall be governed by Article 8 of Subtitle 1 of Title 6
of the Delaware Code (the Uniform Commercial Code), as amended from time to
time.
(b) Registration of transfers of shares of the Corporation shall be made
only on the books of the Corporation upon request of the registered holder
thereof, or of his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and upon the surrender
of the certificate or certificates for such shares properly endorsed or
accompanied by a stock power duly executed.
SECTION 4. Addresses of Stockholders - Each stockholder shall designate
to the Secretary an address at which notices of meetings and all other corporate
notices may be served or mailed to him, and, if any stockholder shall fail to
designate such address, corporate notices may be served upon him by mail
directed to him at his post office address, if any, as the same appears on the
share record books of the Corporation or at his last known post office address.
SECTION 5. Lost, Destroyed and Mutilated Certificates. The holder of any
shares of the Corporation shall immediately notify the Corporation of any loss,
destruction or mutilation of the certificate therefor, and
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the Board may, in its discretion, cause to be issued to him a new certificate or
certificates for shares, upon the surrender of the mutilated certificates or, in
the case of loss or destruction of the certificate, upon satisfactory proof of
such loss or destruction, and the Board may, in its discretion, require the
owner of the lost or destroyed certificate or his legal representative to give
the Corporation a bond in such sum and with such surety or sureties as it may
direct to indemnify the Corporation against any claim that may be made against
it on account of the alleged loss or destruction of any such certificate.
SECTION 6. Regulations. The Board may make such rules and regulations as
it may deem expedient, not inconsistent with these By-laws, concerning the
issue, transfer and registration of certificates for stock of the Corporation.
SECTION 7. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than 60 nor less
than 10 days before the date of such meeting, nor more than 60 days prior to any
other action. A determination of stockholders entitled to notice of or to vote
at a meeting of the stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board may fix a new record date for the adjourned
meeting.
ARTICLE VI
SEAL
The Board may provide a Corporate seal, which shall be in the form of a
circle and shall bear the full name of the Corporation and the words "Corporate
Seal Delaware."
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall end on the 31st of December in
each year unless changed by resolution of the Board.
ARTICLE VIII
INDEMNIFICATION AND INSURANCE
Section 1. Power to Indemnify in Actions, Suits or Proceedings other
Than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify, to the fullest extent permitted
by applicable law, now or hereafter in effect, any person who was or is a party
or is threatened to be a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal,
<PAGE> 12
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 or executive
officer (or in the Board's discretion, an employee or agent) of the Corporation,
or is or was a director, executive officer, (or in the Board's discretion, an
employee or agent) of the Corporation serving at request of the Corporation in
any other capacity for or on behalf of the Corporation, 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, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful; provided, however, the Corporation shall be required to
indemnify an officer or director in connection with any actions, suit or
proceeding initiated by such person only if (i) such action, suit or proceeding
was authorized by the Board or (ii) the indemnification does not relate to any
liability arising under Section 16(b) of the Securities Exchange Act of 1934, as
amended, or any of the rules or regulations promulgated thereunder. The
termination of any action, suit or proceeding by judgment, order, settlement, 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, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII, 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 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, executive officer, employee or agent of the
Corporation, or is or was a director, executive officer, (or in the Board's
discretion, an employee or agent) of the Corporation serving at the request of
the Corporation as a director or executive officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually 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; 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 to the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article VIII (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 or executive officer is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by the Board of Directors by a majority vote of
directors who were not parties to such action, suit or proceeding (even if such
majority vote constitutes less than a quorum), or (ii) if the majority vote of
disinterested directors so directs (even if such majority vote constitutes less
than a quorum), by independent legal counsel in a written opinion, or (iii) by
the stockholders. To the extent, however, that a director or executive officer
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding described above, or the defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
<PAGE> 13
connection therewith, without the necessity of authorization in the specific
case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have 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, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the Corporation or
another enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall mean
any other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise of which such person is or was serving at the request
of the Corporation as a director or executive officer. The provisions of this
Section 4 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Sections l or 2 of this Article VIII, as the
case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
executive officer may apply to any court of competent jurisdiction in the State
of Delaware for indemnification to the extent otherwise permissible under
Sections 1 and 2 of this Article VIII. The basis of such indemnification by a
court shall be a determination by such court that indemnification of the
director or executive officer is proper in the circumstances because he has met
the applicable standards of conduct set forth in Section 1 or 2 of this Article
VIII, as the case may be. Neither a contrary determination in the specific case
under Section 3 of this Article VIII nor the absence of any determination
hereunder shall be a defense to such application or create a presumption that
the director or executive officer seeking indemnification has not met any
applicable standard of conduct. Notice of any application for indemnification
pursuant to this Section 5 shall be given to the Corporation promptly upon the
filing of such application. If successful, in whole or in part, the director or
executive officer seeking indemnification shall also be entitled to be paid the
expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses (including attorneys'
fees) incurred by a director or executive officer in defending any civil,
criminal proceeding, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or executive officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article VIII, which undertaking may be accepted without
reference to the financial ability of such person to make such payment. Such
expenses incurred by other employees and agents may be so paid upon such terms
and conditions, if any, as the Board of Directors deems appropriate.
Section 7. Non-exclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article VIII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under any By-law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to
<PAGE> 14
the direction (howsoever embodied) of any court of competent jurisdiction or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, it being the policy of the
Corporation that indemnification of the persons specified in Sections 1 and 2 of
this Article VIII shall be made to the fullest extent permitted by law.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or executive officer
of the Corporation, or is or was a director or executive officer of the
Corporation serving at the request of the Corporation as a director or executive
officer 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 the power or the obligation to indemnify him against such
liability under the provisions of this Article VIII, the DGCL or otherwise.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or executive officers, so that any person who is or was a director or
executive officer of such constituent corporation, or is or was a director or
executive officer of such constituent corporation serving at the request of such
constituent corporation as a director or executive officer of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, shall stand in the same position under the provisions of this
Article VIII with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued. For purposes of this Article VIII, references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director or executive officer of the Corporation
which imposes duties on, or involves services by, such director or executive
officer with respect to an employee benefit plan, its participant or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
VIII.
Section 10. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the Corporation under Sections 1
and 2 or advance of costs, charges and expenses to a director or officer under
Section 6 of this Article VIII, shall be made promptly, and in any event within
30 days, upon the written request of the director or officer. If a determination
by the Corporation that the director or officer is entitled to indemnification
pursuant to this Article VIII, and the Corporation fails to respond within 60
days to a written request for indemnity, the Corporation shall be deemed to have
approved such request. If the Corporation denies a written request for indemnity
or advancement of expenses, in whole or in part, or if payment in full pursuant
to such request is not made within 30 days, the right to indemnification or
advances as granted by this Article VIII shall be enforceable by the director or
officer in any court of competent jurisdiction.
Section 11. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the
<PAGE> 15
Delaware General Corporation Law are not in effect and any repeal or
modification thereof shall not affect any right or obligation then existing with
respect to any state of facts then or previously existing or any action, suit,
or proceeding previously or thereafter brought or threatened based, in whole or
in part upon any such state of facts. Such a "contract right" may not be
modified retroactively without the consent of such director, officer, employee
or agent. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director
or executive officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
The indemnification provided by this Article VIII shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any other By-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in any
other capacity while holding such office, and shall continue 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 a person. The
Corporation may enter into a separate written agreement with any director,
officer, employee or agent of the Corporation that expressly provides for
indemnification and reimbursement of such person to the full extent permitted by
this Article VIII, on the same terms and conditions provided herein.
Section 12. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 hereof),
the Corporation shall not be obligated to indemnify any director or executive
officer in connection with a proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized or consented to
by the Board of Directors of the Corporation.
Section 13. Severability. If this Article VIII or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each director or officer and may
indemnify each employee or agent 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, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article VIII that shall not have been invalidated and to the
fullest extent permitted by applicable law.
ARTICLE IX
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation of the
Corporation, any provision contained in these By-laws may be amended, repealed
or adopted by the Board of Directors or by vote of the stockholders at the time
entitled to vote in the election of any directors.
<PAGE> 16
EXHIBIT A
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS OF
E.SPIRE COMMUNICATIONS, INC.
AUTHORITY
The Audit Committee (the "Committee") of the Board of Directors (the "Board") of
e.Spire Communications, Inc. (the "Company") is established pursuant to Article
III, Section 8 of the Company's Amended and Restated By-laws and Section 141(c)
of the Delaware General Corporation Law. The presence in person or by telephone
of a majority of the Committee's members shall constitute a quorum for any
meetings of the Committee. All actions of the Committee will require the vote of
a majority of its members present at a meeting of the Committee at which a
quorum is present.
PURPOSE
The primary purpose of the Committee is to assist the Board in fulfilling its
responsibility to oversee management's conduct of the Company's financial
reporting process, including by overviewing the financial reports and other
financial information provided by the Company to any governmental or regulatory
body, the public or other users thereof, the Company's systems of internal
accounting and financial controls, the annual independent audit of the Company's
financial statements and the Company's legal compliance and ethics programs as
established by management and the Board. In so doing, it is the responsibility
of the Committee to maintain free and open means of communication between the
directors, the independent auditors, the internal auditors and the financial and
senior management of the Company.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside counsel,
auditors or other experts for this purpose. The Board and the Committee are in
place to represent the Company's shareholders; accordingly, the outside auditor
is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
<PAGE> 17
MEMBERSHIP
The Committee shall be comprised of not less than three members of the Board,
and the Committee's composition will meet the requirements of the Audit
Committee Policy of the NASD (the "NASD Policy").
Accordingly, all of the members will be directors:
Who have no relationship to the Company that may interfere with the exercise of
their independence from management and the Company; and
Who are financially literate or who become financially literate within a
reasonable period of time after appointment to the Committee. In addition, at
least one member of the Committee will have accounting or related financial
management expertise.
Notwithstanding paragraph (1) above, as permitted by the NASD Policy, one
director who is not independent and not a current employee of the Company or an
immediate family member of an employee, may be appointed to the Committee if the
Board, under exceptional and limited circumstances, determines that membership
on the Committee by the individual is required by the best interests of the
Company and its shareholders, and the Board discloses, in the next annual proxy
statement subsequent to such determination, the nature of the relationship and
the reasons for that determination.
MEETINGS
The Committee shall meet with such frequency and at such intervals as it shall
determine is necessary to carry out its duties and responsibilities. As part of
its purpose to foster open communications, the Committee shall meet at least
annually with management, the head of the internal auditing department and the
Company's independent auditors in separate sessions to discuss any matters that
the Committee or each of these groups or persons believe should be discussed
privately. In addition the Committee, or any member thereof designated Chairman
of the Committee, should meet or confer with the independent auditors and
management quarterly to review the Company's periodic financial statements prior
to the their filing with the Securities and Exchange Commission. The Committee
may ask members of management and others to attend its meetings.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the Company's
management is responsible for preparing the Company's financial statements and
that the outside auditors are responsible for auditing those financial
statements. Additionally, the Committee recognizes that financial management, as
well as the outside auditors, have more time, knowledge and more detailed
information on the Company than do Committee members; consequently, in carrying
out its oversight responsibilities, the Committee is not providing any expert or
special assurance as to the Company's financial statements or any professional
certification as to the outside auditor's work.
<PAGE> 18
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
The Committee shall:
- review with management and the outside auditors the audited
financial statements to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Shareholders if
distributed prior to the filing of Form 10-K) and review and
consider with the outside auditors the matters required to be
discussed by Statement of Auditing Standards ("SAS") No. 61;
- as a whole, or through the Committee chair, review with the
outside auditors the Company's interim financial results to be
included in the Company's quarterly reports to be filed with
Securities and Exchange Commission and the maters required to be
discussed by SAS No. 61; this review will occur prior to the
Company's filing of the Form 10-Q;
- request from the outside auditors annually, a formal written
statement delineating all relationships between the auditors and
the Company consistent with Independence Standards Board
Standard Number 1 ("Standard No. 1");
- discuss with the outside auditors any such disclosed
relationships and their impact on the outside auditor's
independence;
- recommend that the Board take appropriate action to oversee the
independence of the outside auditors;
- prepare a report to be included in each annual proxy statement
of the Company commencing after December 15, 2000 which states,
among other things, whether (i) the Committee has reviewed and
discussed with management the audited financial statements to be
included in the Company's Annual Report on Form 10-K, (ii) the
Committee has discussed with the Company's independent auditors
the matters that the auditors are required to discuss with the
Committee by SAS No. 61, (iii) the Committee has received the
written disclosures and letter from the Company's independent
auditors required by Standard No. 1 and has discussed with the
independent auditors their independence, and (iv) the Committee
has recommended to the Board that the audited financial
statements be included in the Company's Annual Report on Form
10-K for the last fiscal year;
- review with the independent auditors, the Company's internal
auditors and financial and accounting personnel, the adequacy
and effectiveness of the accounting and financial controls of
the Company and elicit any recommendations for the improvement
of such control procedures or particular areas where new or more
detailed controls or procedures are desirable;
- review the internal audit function of the Company, including the
independence and authority of its reporting obligations, the
proposed audit plans for the coming year, and the coordination
of such
<PAGE> 19
plans with the independent auditors;
- review accounting and financial human resources and succession
planning within the Company;
- submit the minutes of all meetings of the Committee to, or
discuss the matters discussed at each Committee meeting with,
the Board; and
- investigate any matter brought to its attention within the scope
of its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
The Committee recognizes the outside auditors' ultimate accountability to the
Board and the Committee as representatives of the shareholders of the Company.
In connection therewith, the Committee, subject to any action that may be taken
by the full Board, shall have the ultimate authority and responsibility to
select (or nominate for shareholder approval), evaluate and, where appropriate,
replace the outside auditor.
