As amended September 20, 2000
THE STANLEY WORKS
BYLAWS
ARTICLE I
SHAREHOLDERS' MEETINGS
1. Annual Meeting. The Annual Meeting of the shareholders shall be held at
such time in the month of February, March or April in each year and at
such place within or without the State of Connecticut as the Board of
Directors may determine. Notice thereof shall be mailed to each
shareholder to his or her last known post office address not less than
ten days nor more than sixty days before such Meeting.
2. Special Meetings. Special Meetings of the shareholders shall be called
by the Chairman, or the President or Secretary, or by the Chairman, or
the President or Secretary upon the written request of the holders of
not less than 35% of the voting power of all shares entitled to vote on
any issue proposed to be considered at such Meeting by mailing a notice
thereof to each shareholder to his or her last known post office
address not less than twenty-five days nor more than fifty days before
such Meeting.
3. Quorum. At any Meeting of shareholders the holders of not less than a
majority of the shares outstanding and entitled to vote present in
person or by proxy shall constitute a quorum. The Directors may
establish a record date for voting or other purposes in accordance
with law.
4. Business to be Conducted at Annual Meeting. No business may be
transacted at an Annual Meeting of shareholders (including any
adjournment thereof), other than business that is either (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the Annual Meeting by
or at the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the Annual
Meeting by any shareholder (i) who is a shareholder of record on the
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date of the giving of the notice provided for in this Section 4 and on
the record date for the determination of shareholders entitled to vote
at such Annual Meeting and (ii) who complies with the notice procedures
set forth in this Section 4.
In addition to any other applicable requirements, for business to be
properly brought before an Annual Meeting by a shareholder, such
shareholder must have given timely notice thereof in proper written
form to the Secretary.
To be timely, a shareholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the
Corporation not less than sixty (60) days nor more than ninety (90)
days prior to the anniversary of the date on which the immediately
preceding Annual Meeting of shareholders was convened; provided,
however, that in the event that the Annual Meeting is called for a date
that is not within thirty (30) days before or after such anniversary
date, notice by the shareholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the Annual
Meeting was mailed or such public disclosure of the date of the Annual
Meeting was made, whichever first occurs.
To be in proper written form, a shareholder's notice to the Secretary
must set forth as to each matter such shareholder proposes to bring
before the Annual Meeting (i) a brief description of the business
desired to be brought before the Annual Meeting and the reasons for
conducting such business at the Annual Meeting, (ii) the name and
record address of such shareholder, (iii) the class or series and
number of shares of capital stock of the Corporation which are owned
beneficially or of record by such shareholder, (iv) a description of
all arrangements or understandings between such shareholder and any
other person or persons (including their names) in connection with the
proposal of such business by such shareholder and any material interest
of such shareholder in such business and (v) a representation that such
shareholder intends to appear in person or by proxy at the Annual
Meeting to bring such business before the meeting.
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No business shall be conducted at the Annual Meeting of shareholders
except business brought before the Annual Meeting in accordance with
the procedures set forth in this Section 4, provided, however, that,
once business has been properly brought before the Annual Meeting in
accordance with such procedures, nothing in this Section 4 shall be
deemed to preclude discussion by any shareholder of any such business.
If the Chairman of an Annual Meeting determines that business was not
properly brought before the Annual Meeting in accordance with the
foregoing procedures, the Chairman shall declare to the meeting that
the business was not properly brought before the meeting and such
business shall not be transacted.
ARTICLE II
NOMINATIONS OF DIRECTOR CANDIDATES
1. Eligibility to Make Nominations. Nominations of candidates for
election as directors of the Corporation at any meeting of shareholders
called for election of directors (an "Election Meeting") may be made by
the Board of Directors or by any shareholder entitled to vote at such
Election Meeting.
2. Procedure for Nominations by the Board of Directors. Nominations made
by the Board of Directors shall be made at a meeting of the Board of
Directors, or by written consent of directors in lieu of a meeting, not
less than 30 days prior to the date of the Election Meeting, and such
nominations shall be reflected in the minute books for the Corporation
as of the date made. At the request of the Secretary of the
Corporation each proposed nominee shall provide the Corporation with
such information concerning himself or herself as is required, under
the rules of the Securities and Exchange Commission, to be included
in the Corporation's proxy statement soliciting proxies for his or her
election as a director.
3. Procedure for Nominations by Shareholders. Not less than 30 days prior
to the date of the Election Meeting, any shareholder who intends to
make a nomination at the Election Meeting shall deliver a notice to the
Secretary of the Corporation setting forth (i) the name, age, business
address and residence address of each nominee proposed in such notice,
(ii) the principal occupation or employment of each such nominee, (iii)
the number of shares of capital stock of the Corporation which are
beneficially owned by each such nominee and (iv) such other information
concerning each such nominee as would be required, under the rules of
the Securities and Exchange Commission, in a proxy statement soliciting
proxies for the election of such nominees.
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4. Substitution of Nominees. In the event that a person is validly
designated as a nominee in accordance with section 2 or 3 hereof and
shall thereafter become unable or unwilling to stand for election to
the Board of Directors, a substitute nominee may be designated as
follows:
(a) by those named as proxies in proxies solicited on behalf of the
Board of Directors if the person was designated as nominee in
accordance with section 2 hereof
(b) by the shareholder who proposed such nominee if the person was
designated as a nominee in accordance with section 3 hereof.
5. Determination of Compliance with Procedure.
If the chairman of the Election Meeting determines that a nomination
was not in accordance with the foregoing procedures, such nomination
shall be void.
ARTICLE III
DIRECTORS AND COMMITTEES
1. Directors. The business, property and affairs of this Corporation
shall be managed by or under the direction of the Board of Directors
consisting of not less than eight nor more than eighteen Directors, the
exact number to be determined by the Board of Directors from time to
time. All Directors shall be shareholders of record. The Directors
shall be divided into three classes designated Class I, Class II and
Class III. Such classes shall be as nearly equal in number as the
total number of Directors constituting the entire Board of Directors
permits. One class shall be chosen annually at the Annual Meeting of
shareholders and the members of such class shall hold office until
their successors be elected and qualified. The Directors may increase
the prescribed number of Directors by the concurring vote of a majority
of the prescribed number of Directors. Any increase or decrease in the
prescribed number of Directors shall be so apportioned among the
classes of Directors as to make all the classes as nearly equal in
number as possible. No reduction of the number of Directors shall
remove or shorten the term of any Director in office. A majority of
the number of Directors prescribed shall constitute a quorum for the
transaction of business.
2. Meetings. The Chairman or the President or any Vice Chairman may and
upon written application of any three Directors shall call a meeting of
the Board of Directors to be held at such time and place as may be
determined by the person calling said meeting and shall cause notice
thereof to be given. Unless waived in writing, three days verbal or
written (mail) notice shall be required provided, however, that if in
the judgment of any two officers an emergency exists, a meeting may be
called forthwith by telephone or telegram or verbal notice and such
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notice shall be deemed sufficient notice notwithstanding that some of
the Directors may not have actual notice.
The Annual Meeting of the Directors for the election of officers shall
be held without notice, immediately after the Annual Meeting of
shareholders. Regular meetings of the Directors shall be held at least
on a quarterly basis.
3. Written Consent. If all the Directors, or all members of a committee
of the Board of Directors, as the case may be, severally or
collectively consent in writing to any action taken or to be taken by
the Corporation, and the number of such Directors or members
constitutes a quorum for such action, such action shall be a valid
corporate action as though it had been authorized at a meeting of the
Board of Directors or committee, as the case may be. The Secretary
shall file such consents with the minutes of the Board of Directors or
of the committee, as the case may be.
4. Participation by Telephone. A Director may participate in a meeting of
the Board of Directors or of a committee by any means of communication
by which all Directors participating in the meeting may simultaneously
hear one another during the meeting, and participation in a meeting
pursuant to this subsection shall constitute presence in person at such
meeting.
5. Vacancies. In case any vacancy or vacancies shall exist in the Board
of Directors at any time the remaining members of the Board by majority
action may fill the vacancy or vacancies. The term of a Director
elected to fill a vacancy expires at the next shareholders meeting at
which Directors are elected.
6. Committees. The Board of Directors may from time to time appoint from
its membership such committees as it may deem necessary or desirable
for the best interests of the Corporation and may delegate to any
committee all needful authority to the extent permitted by law. The
meetings of all committees are open to all directors.
Each committee shall fix its own rules as to procedure and calling of
meetings. It shall appoint a Secretary, who need not be a member of the
committee. Such Secretary shall call meetings of the committee on the
request of the Chair of the committee or any two members and shall keep
permanent record of all of its proceedings. A majority of the members
of any committee shall constitute a quorum.
7. Executive Committee. The Directors shall appoint an Executive Committee
consisting of the Chairman, if any, the President and at least three
other Directors, but in no event shall the Committee consist of less
than five members. The Board of Directors may at any time decrease
(subject to the provisions of the preceding paragraph) or increase the
size of said Committee, may change the membership thereof and may fill
vacancies therein.
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During intervals between meetings of the Board of Directors, the
Executive Committee shall possess and may exercise all the powers of
the Board of Directors in the management of the business and affairs of
the Corporation, but the Committee shall have no power to declare
dividends or do other things specially reserved by law to the
Directors. The Executive Committee shall have power to appoint such
subcommittees as it may deem necessary to report and make
recommendations to the Executive Committee. Any action taken by the
Executive Committee shall be subject to change, alteration and revision
by the Board of Directors, provided that no rights or acts of others
shall be affected by any such alteration or revision.
8. Finance and Pension Committee. A Finance and Pension Committee
consisting of at least three Directors shall be appointed by the Board
of Directors. The Committee shall advise and assist the Chief
Financial Officer and the Treasurer in major matters concerning the
finances of the Corporation and in matters of major policy decisions in
the purchase and sale of securities. In performance of this the
Committee shall regularly review the financial condition of the
Corporation so as to counsel these officers and the Board on the total
financial resources, strength and capabilities of the Corporation. In
this connection, the Committee shall analyze and advise on fundamental
corporate changes in capital structure (both debt and equity); review
the capital structure of the Corporation and make recommendations with
respect to management proposals concerning financing, purchases of
treasury stock, investments, and dividend actions; review periodically
the Corporation's risk management program and its adequacy to safeguard
the Corporation against extraordinary liabilities or losses; and advise
and assist in matters such as short-term investments, credit
liabilities, financings, and hedges of foreign currency exposures.
The Committee shall oversee the Corporation's administration of its
pension plans and of the pension plans of its subsidiaries. The
Committee shall be responsible for setting (subject to the approval of
the Board of Directors) the retirement policies of the Corporation and
its subsidiaries; for amending pension plans, savings and retirement
plans, stock ownership plans or any similar plans or related trust
agreements; and for approving actuarial assumptions and investment
policies for the Corporation's pension plans. It shall report at least
annually to the Board of Directors. The Committee may delegate any or
all of these functions to such employees as it, in its judgment, deems
appropriate.
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Specifically, the Committee shall approve retaining or terminating the
services of actuaries, lawyers, accountants or other professionals for
the plans; shall approve annually the amount of the contributions to be
made by the Corporation to the respective plans; and shall approve
appointing and terminating trustees and investment managers and
determine the allocation of the assets of the plans among one or more
trustees or investment managers.
9. Audit Committee. An Audit Committee consisting of at least three
Directors shall be appointed by the Board of Directors. Except as
permitted by the independence requirements of the New York Stock
Exchange, none of the Audit Committee members shall be officers or
employees of the Corporation or any of its affiliates. Audit Committee
members shall have no relationship to the Corporation that may
interfere with the exercise of their independence from management and
the Corporation. Each member of the Audit Committee shall be
financially literate and at least one member shall have accounting or
related financial management expertise, as such qualifications are
interpreted by the Corporation's Board of Directors in its business
judgment.
The Committee shall nominate the public accounting firm to conduct the
annual audit and shall review fees for audit and tax work and approve
in advance management consulting services which management may propose
be provided by the Corporation's public accounting firm. With respect
to such management consulting services, consideration shall be given to
the effect that performing such services might have on audit
independence. The Committee shall review with the auditors the scope
and timing of their audit examination, with particular emphasis on
those areas which either the Committee or the auditors believe warrant
special attention. The Committee is authorized to have the auditors
perform such supplemental reviews or audits as it deems desirable.
The Committee shall review the audited financial statements and the
auditors' report thereon, including consideration of all significant
disclosures required by the Securities and Exchange Commission, and any
proposed changes in accounting principles or practices which have a
significant impact on amounts reported for the current year (or will
have in the future) and shall discuss with the auditors any significant
problems encountered in the completion of the audit. The Committee
shall review with management and the independent auditors the
qualitative judgments about the appropriateness, not just the
acceptability, of accounting principles and financial disclosure
practices used or proposed to be adopted including the degree of
aggressiveness or conservatism of the accounting principles and
underlying estimates including significant liabilities and reserves
associated with those liabilities. The Committee shall review the
auditors' recommendations regarding internal control and their
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comments, if any, relating to conflicts of interest, questionable
payments or other similar matters, and monitor with management the
consideration given and/or the corrective action taken with respect to
these comments and recommendations. The Committee shall review
management's evaluation of the Corporation's system of internal
accounting controls, including the independence, scope and results of
the internal audit function, and monitor the effectiveness of the
system with management, independent auditors and internal audit
management. The Committee shall review with management and independent
auditors and consider the impact on the Corporation of significant
recent or pending statements by the Financial Accounting Standards
Board, the Securities and Exchange Commission, the Auditing Standards
Executive Committee of the American Institute of Certified Public
Accountants and similar authoritative bodies. The Committee shall
review environmental liabilities and the reserves associated with those
liabilities.
In carrying out all of the foregoing responsibilities, the Committee
shall have direct and open access to Management, public accountants and
internal audit management (each of which shall have direct and open
access to the Committee); shall submit Committee reports,
recommendations, and minutes of meetings to the Board of Directors; and
shall provide opportunities to the other members of the Board to have
full and open access to the independent auditors.
10. Compensation and Organization Committee. A Compensation and
Organization Committee consisting of at least three Directors, none of
whom shall be employees of the Corporation or any of its subsidiaries,
shall be appointed by the Board of Directors. The Committee shall
review and approve major organization and compensation structure
changes as recommended by Management. Although the Board, itself,
will review the performance of the chief executive officer and fix his
or her salary, the Committee shall approve the performance and
determine the salaries of the other executive officers of the
Corporation and of other senior executives whose base salary exceeds
an amount fixed by the Board of Directors; shall determine the
compensation of all executive officers and such senior executives under
the Corporation's senior executive compensation plans; shall administer
all of the Corporation's senior executive compensation plans; and shall
assure that there is a succession plan in place.
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11. Committee on Board Affairs and Public Policy. A Committee on Board
Affairs and Public Policy consisting of at least three directors, none
of whom shall be employees of the Corporation or any of its
subsidiaries shall be appointed by the Board of Directors. The
Committee shall consider and make recommendations to the Board of
Directors as to Board of Director membership with respect to names
generated by the Committee itself or submitted by shareholders. The
Committee shall consider and make recommendations to the Board of
Directors with respect to Board of Director committee membership and
chair assignments. (These will normally be acted upon by the Board of
Directors at its Annual Meeting held immediately after the Annual
Meeting of shareholders.) The Committee shall consider and make
recommendations to the Board of Directors with respect to the number
of members of the Board of Directors. (The Charter and Bylaws provide
for not less than nine nor more than eighteen as may be determined by
the Board). Annually, the Committee shall consider and recommend to
the Board of Directors the persons whom the Committee proposes that the
Board of Directors nominate for election as directors at the Annual
Meeting of shareholders. The Committee shall consider and make
recommendations to the Board of Directors with respect to remuneration
of directors.
The Committee shall provide guidance to the Management on major issues
in areas of corporate social responsibility, including environmental
issues and public affairs. The Committee shall review and approve
policy guidelines to be used by Management in making charitable
contributions and shall annually review all charitable contributions
made by the Corporation during the previous twelve months and recommend
to the Board the level of contributions to be set for the ensuing year.
12. In the absence of any one or more members from a meeting of any of the
committees provided for in these Bylaws, the Chairman, or the
President, may in his or her discretion invite any member or members of
the Board (otherwise qualified to serve) to attend such meeting.
Temporary members thus appointed to attend for absentees shall act as
regular members and shall have the right to vote.
13. Powers of All Committees. The powers of all committees are at all
times subject to the control of the Directors, and any member of any
committee may be removed at any time at the pleasure of the Board.
ARTICLE IV
OFFICERS
1. Election of Officers. The Board of Directors shall have power to elect
from its own members or otherwise a Chairman, a President, one or more
Vice Chairmen and Vice Presidents, a Secretary, a Treasurer, one or
more Assistant Treasurers and Assistant Secretaries, and such other
officers, agents and employees as it may deem expedient, and to define
the duties and authority of all officers, employees and agents and to
delegate to them such lawful powers as may be deemed advisable.
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The officers shall respectively perform all acts and duties required of
such officers by law, by the Charter and Bylaws of this Corporation, or
by the Board of Directors.
2. Chairman of the Board. If the Directors have elected a Chairman, the
Chairman shall preside at all meetings of the Board except that in the
Chairman's absence the Directors present shall designate a person to
preside. The Chairman shall have such additional duties as the Board of
Directors or the Executive Committee may assign.
3. President. The President shall be elected by the Directors and shall
have such duties as the Board of Directors or the Executive Committee
may assign.
4. Chief Executive Officer. One of the officers shall be appointed
Chief Executive Officer of the Corporation by the Board of Directors.
Subject to the Board of Directors and the Executive Committee, the
Chief Executive Officer shall have general supervision and control of
the policies, business and affairs of the Corporation.
5. Vice Chairmen. Each Vice Chairman shall have such powers and perform
such duties as may be conferred upon him or her or determined by the
Chief Executive Officer.
6. Vice Presidents. Each Vice President shall have such powers and
perform such duties as may be conferred upon him or her or determined
by the Chief Executive Officer.
7. Treasurer. The Treasurer shall have the oversight and control of the
funds of the Corporation and shall have the power and authority to make
and endorse notes, drafts and checks and other obligations necessary
for the transaction of the business of the Corporation except as herein
otherwise provided.
8. Controller. The Controller shall have the oversight and control of the
accounting records of the Corporation and shall prepare such accounting
reports and recommendations as shall be appropriate for the operation
of the Corporation.
9. Secretary. It shall be the duty of the Secretary to make and keep
records of the votes, doings and proceedings of all meetings of the
shareholders and Board of Directors of the Corporation, and of its
Committees, and to authenticate records of the Corporation.
10. Assistant Treasurers. The Assistant Treasurers shall have such duties
as the Treasurer shall determine.
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11. Assistant Secretaries. The Assistant Secretaries shall have such
duties as the Secretary shall determine.
12. Powers of All Officers. The powers of all officers are at all times
subject to the control of the Directors, and any officer may be removed
at any time at the pleasure of the Board.
ARTICLE V
INDEMNIFICATION
To the extent properly permitted by law the Board of Directors shall
provide for the indemnification and reimbursement of, and advances of
expenses to, any person made a party to any action, suit or proceeding
by reason of the fact that he or she, or a person whose legal
representative or successor he or she is,
(a) is or was a Director, officer, employee or agent of the
Corporation, or
(b) served at the Corporation's request as a director, officer,
employee or agent of another corporation,
for expenses, including attorney's fees, and such amount of any
judgment, money decree, fine, penalty or settlement for which he or
she may have become liable as the Board of Directors deems
reasonable, actually incurred by him or her in connection with the
defense or reasonable settlement of any such action, suit or
proceeding or any appeal therein.
This provision of indemnification shall be in addition to any other
right or remedy which such person may have. The Corporation shall have
the right to intervene in and defend all such actions, suits or
proceedings brought against any such person.
ARTICLE VI
CORPORATE SEAL
The corporate seal shall be in the custody of the Secretary and either
the Secretary or any other officer shall have the power to affix the
same for the Corporation.
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ARTICLE VII
STOCK CERTIFICATES
1. Signatures. Certificates of stock shall be signed by the Chairman, the
President or a Vice President and by the Secretary or the Treasurer
(except that where any such certificate is signed by a transfer agent
or transfer clerk and by the registrar, the signatures of any such
Chairman, President, Vice President, Secretary or Treasurer may be
facsimiles, engraved or printed) and shall be sealed with the seal of
the corporation (or shall bear a facsimile of such seal).
2. Lost Certificates. No certificate for shares of stock in the
Corporation shall be issued in place of any certificate alleged to have
been lost, stolen or destroyed except upon production of such evidence
of such loss, theft or destruction as the Board of Directors in its
discretion may require and upon delivery to the Corporation of a bond
of indemnity in form and, unless such requirement is waived by
Resolution of the Board, with one or more sureties, satisfactory to the
Board in at least double the value of the stock represented by said
Certificate.
ARTICLE VIII
FISCAL YEAR
The Corporation's fiscal year shall close on the Saturday nearest
December 31st of each year.
ARTICLE IX
INDEPENDENT AUDIT
The Board of Directors shall provide for a yearly independent audit,
the form and scope of which shall be determined by the Board from time
to time.
ARTICLE X
AMENDMENTS
The Board of Directors of the Corporation may adopt, amend or repeal
the Bylaws of the Corporation, subject, however, to the power of the
shareholders to adopt, amend or repeal the same, provided that any
notice of a meeting of shareholders or of the Board of Directors at
which Bylaws are to be adopted, amended or repealed, shall include
notice of such proposed action.
ARTICLE XI
ACQUISITIONS OF STOCK
(a) Except as set forth in subsection (b) hereof, the Corporation shall
not acquire any of its voting equity securities (as defined below)
at a price per share above the market price per share (as defined
below) of such securities on the date of such acquisition from any
person actually known by the Corporation to be the beneficial owner
(as determined pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, or any successor rule or regulation) of
more than three percent of the Corporation's voting equity
securities who has been the beneficial owner of the Corporation's
voting equity securities for less than two years prior to the date
of the Corporation's acquisition thereof, unless such acquisition
(i) has been approved by a vote of a majority of the shares
entitled to vote, excluding shares owned by any beneficial owner
any of whose shares are proposed to be acquired pursuant to the
proposed acquisition that is the subject of such vote or (ii) is
pursuant to an offer made on the same terms to all holders of
securities of such class. The determination of the Board of
Directors shall be conclusive in determining the price paid per
share for acquired voting equity securities if the Corporation
acquires such securities for consideration other than cash.
(b) This provision shall not restrict the Corporation from: (i)
acquiring shares in the open market in transactions in which there
has been no prior arrangement with, or solicitation of (other than
a solicitation publicly made to all holders), any selling holder of
voting equity securities or in which all shareholders desiring to
sell their shares have an equal chance to sell their shares; (ii)
offering to acquire shares of shareholders owning less than 100
shares of any class of voting equity securities; (iii) acquiring
shares pursuant to the terms of a stock option or similar plan that
has been approved by a vote of a majority of the Corporation's
common shares represented at a meeting of shareholders and entitled
to vote thereon; (iv) acquiring shares from, or on behalf of, any
employee benefit plan maintained by the Corporation or any
subsidiary or any trustee of, or fiduciary with respect to, any
such plan when acting in such capacity; or (v) acquiring shares
pursuant to a statutory appraisal right or otherwise as required by
law.
(c) Market price per share on a particular day means the highest sale
price on that day or during the period of five trading days
immediately preceding that day of a share of such voting equity
security on the Composite Tape for New York Stock Exchange-Listed
Stocks, or if such voting equity security is not quoted on the
Composite Tape on the New York Stock Exchange or listed on such
Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such
voting equity security is listed, or, if such voting equity
security is not listed on any such exchange, the highest sales
price or, if sales price is not reported, the highest closing bid
quotation with respect to a share of such voting equity security on
that day or during the period of five trading days immediately
preceding that day on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in
use, or if no such quotations are available, the fair market value
on the date in question of a share of such voting equity security
as determined by a majority of the Board of Directors.
(d) Voting equity securities of the Corporation means equity securities
issued from time to time by the Corporation which by their terms
are entitled to be voted generally in the election of the directors
of the Corporation.
(e) The Board of Directors shall have the power to interpret the terms
and provisions of, and make any determinations with respect to,
this Article XI, which interpretations and determinations shall be
conclusive.
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