aehr_ex31
Exhibit 3.1
BY-LAWS
OF
AEHR TEST SYSTEMS
(As
Amended as of September 2, 2020)
ARTICLE
I
CORPORATE OFFICES
1.1 PRINCIPAL
OFFICE.
The
board of directors shall fix the location of the principal
executive office of the corporation at any place within or outside
the State of California. If the principal executive office is
located outside such state, and the corporation has one or more
business offices in such state, the board of directors shall fix
and designate a principal business office in the State of
California.
1.2 OTHER
OFFICES.
The
board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified
to do business.
ARTICLE
II
MEETINGS OF SHAREHOLDERS
2.1 PLACE
OF MEETINGS.
Meetings of
shareholders shall be held at any place within or outside the State
of California designated by the board of directors. In the absence
of any such designation, shareholders' meetings shall be held at
the principal executive office of the corporation.
2.2 ANNUAL
MEETING.
The
annual meeting of shareholders shall be held each year on a date
and at a time designated by the board of directors. In the absence
of such designation, the annual meeting of shareholders shall be
held on the first Wednesday of October in each year at 4:00 p.m.
However, if such day falls on a legal holiday, then the meeting
shall be held at the same time and place on the next succeeding
full business day. At the meeting, directors shall be elected, and
any other proper business may be transacted.
2.3 SPECIAL
MEETING.
A
special meeting of the shareholders may be called at any time by
the board of directors, or by the chairman of the board, or by the
president, or by one or more shareholders holding shares in the
aggregate entitled to cast not less than ten percent (10%) of the
votes at that meeting.
If a
special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the
time of such meeting and the general nature of the business
proposed to be transacted, and shall be delivered personally or
sent by registered mail or other facsimile transmission to the
chairman of the board, the president, any vice president or the
secretary of the corporation. The officer receiving the request
shall cause notice to be promptly given to the shareholders
entitled to vote, in accordance with the provisions of
Sections 2.4 and 2.5 of these by-laws, that a meeting will be
held at the time requested by the person or persons calling the
meeting, not less than thirty-five (35) nor more than sixty (60)
days after the receipt of the request. If the notice is not given
within twenty (20) days after receipt of the request, the person or
persons requesting the meeting may give the notice. Nothing
contained in this paragraph of this Section 2.3 shall be
construed as limiting, fixing or affecting the time when a meeting
of shareholders called by action of the board of directors may be
held.
2.4 NOTICE
OF SHAREHOLDERS' MEETINGS.
All
notices of meetings of shareholders shall be sent or otherwise
given in accordance with Section 2.5 of these by-laws not less
than ten (10) nor more than sixty (60) days before the date of the
meeting. The notice shall specify the place, date and hour of the
meeting and (i) in the case of a special meeting, the general
nature of the business to be transacted (no business other than
that specified in the notice may be transacted) or (ii) in the
case of the annual meeting, those matters which the board of
directors, at the time of giving the notice, intends to present for
action by the shareholders. The notice of any meeting at which
directors are to be elected shall include the name of any nominee
or nominees whom, at the time of the notice, management intends to
present for election.
If
action is proposed to be taken at any meeting for approval of
(i) a contract or transaction in which a director has a direct
or indirect financial interest, pursuant to Section 310 of the
Corporations Code of California (the "Code"), (ii) an
amendment of the articles of incorporation, pursuant to
Section 902 of the Code, (iii) a reorganization of the
corporation, pursuant to Section 1201 of the Code, (iv) a
voluntary dissolution of the corporation, pursuant to
Section 1900 of the Code, or (v) a distribution in
dissolution other than in accordance with the rights of outstanding
preferred shares, pursuant to Section 2007 of the Code, the
notice shall also state the general nature of that
proposal.
2.5 MANNER
OF GIVING NOTICE; AFFIDAVIT OF NOTICE.
Notice
of any meeting of shareholders shall be given either personally or
by first-class mail or other written communication, charges
prepaid, addressed to the shareholder at the address of that
shareholder appearing on the books of the corporation or given by
the shareholder to the corporation for the purpose of notice. If no
such address appears on the corporation's books or is given, notice
shall be deemed to have been given if sent to that shareholder by
first-class mail or other written communication to the
corporation's principal executive office, or if published at least
once in a
newspaper of
general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when
delivered personally or deposited in the mail or other means of
written communication.
If any
notice addressed to a shareholder at the address of that
shareholder appearing on the books of the corporation is returned
to the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver
the notice to the shareholder at that address, all future notices
or reports shall be deemed to have been duly given without further
mailing if the same shall be available to the shareholder on
written demand of the shareholder at the principal executive office
of the corporation for a period of one (1) year from the date of
the giving of the notice.
An
affidavit of the mailing or other means of giving any notice of any
shareholders' meeting, executed by the secretary, assistant
secretary or any transfer agent of the corporation giving the
notice, shall be prima facie evidence of the giving of such
notice.
2.6 QUORUM.
The
presence in person or by proxy of the holders of a majority of the
shares entitled to vote thereat constitutes a quorum for the
transaction of business at all meetings of shareholders. The
shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less
than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to
constitute a quorum.
2.7 ADJOURNED
MEETING; NOTICE.
Any
shareholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by the vote of the
majority of the shares represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other
business may be transacted at that meeting, except as provided in
Section 2.6 of these by-laws.
When
any meeting of shareholders, either annual or special, is adjourned
to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at the meeting at which
the adjournment is taken, unless a new record date for the
adjourned meeting is fixed, or unless the adjournment is for more
than forty-five (45) days from the date set for the original
meeting, in which case notice of the adjourned meeting shall be
given. Notice of any such adjourned meeting shall be given to each
shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 2.4 and 2.5 of
these by-laws. At any adjourned meeting the corporation may
transact any business which might have been transacted at the
original meeting.
2.8 VOTING.
The
shareholders entitled to vote at any meeting of shareholders shall
be determined in accordance with the provisions of
Section 2.11 of these by-laws, subject to the provisions of
Sections 702 to 704, inclusive, of the Code (relating to
voting shares held by a fiduciary, in the name of a corporation or
in joint ownership).
The
shareholders' vote may be by voice vote or by ballot; provided,
however, that any election for directors must be by ballot if
demanded by any shareholder before the voting has
begun.
On any
matter other than the election of directors, any shareholder may
vote part of the shares in favor of the proposal and refrain from
voting the remaining shares or vote them against the proposal, but,
if the shareholder fails to specify the number of shares which the
shareholder is voting affirmatively, it will be conclusively
presumed that the shareholder's approving vote is with respect to
all shares which the shareholder is entitled to vote.
If a
quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on any
matter (other than the election of directors) shall be the act of
the shareholders, unless the vote of a greater number, or voting by
classes, is required by the Code or by the articles of
incorporation.
At a
shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e. cast for any
one or more candidates a number of votes greater than the number of
the shareholder's shares) unless the candidates' names have been
placed in nomination prior to commencement of the voting and a
shareholder has given notice prior to commencement of the voting of
the shareholder's intention to cumulate votes. If any shareholder
has given such a notice, then every shareholder entitled to vote
may cumulate votes for candidates placed in nomination and give one
candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which that
shareholder's shares are entitled, or distribute the shareholder's
votes on the same principle among any or all of the candidates, as
the shareholder thinks fit. The candidates receiving the highest
number of votes, up to the number of directors to be elected, shall
be elected.
2.9 VALIDATION
OF MEETINGS: WAIVER OF NOTICE; CONSENT.
The
transactions of any meeting of shareholders, either annual or
special, however called and noticed, and wherever held, shall be as
valid as though had at a meeting duly held after regular call and
notice, if a quorum be present either in person or by proxy, and
if, either before or after the meeting, each person entitled to
vote, who was not present in person or by proxy, signs a written
waiver of notice or a consent to the holding of the meeting or an
approval of the minutes thereof. The waiver of notice or consent
need not specify either the business to be transacted or the
purpose of any annual or special meeting of shareholders, except
that if action is taken or proposed to be taken for approval of any
of those matters specified in the second paragraph of
Section 2.4 of these by-laws, the waiver of notice or consent
shall state the general nature of the proposal. All such waivers,
consents and approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
Attendance by a
person at a meeting shall also constitute a waiver of notice of
that meeting, except when the person objects, at the beginning of
the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, and except that attendance at a
meeting is not a waiver of any right to object to the consideration
of a matter not included in the notice of the meeting, if that
objection is expressly made at the meeting.
2.10 SHAREHOLDER
ACTION BY WRITTEN CONSENT WITHOUT A MEETING.
Any
action which may be taken at any annual or special meeting of
shareholders may be taken without a meeting and without prior
notice, if a consent in writing, setting forth the action so taken,
is signed by the holders of outstanding shares having not less than
the minimum number of votes that would be necessary to authorize or
take that action at a meeting at which all shares entitled to vote
on that action were present and voted.
In the
case of election of directors, such a consent shall be effective
only if signed by the holders of all outstanding shares entitled to
vote for the election of directors; provided, however, that a
director may be elected at any time to fill a vacancy on the board
of directors that has not been filled by the directors, by the
written consent of the holders of a majority of the outstanding
shares entitled to vote for the election of directors.
All
such consents shall be maintained in the corporate records. Any
shareholder giving a written consent, or the shareholder's proxy
holders, or a transferee of the shares, or a personal
representative of the shareholder, or their respective proxy
holders, may revoke the consent by a writing received by the
secretary of the corporation before written consents of the number
of shares required to authorize the proposed action have been filed
with the secretary.
If the
consents of all shareholders entitled to vote have not been
solicited in writing, and if the unanimous written consent of all
such shareholders shall not have been received, the secretary shall
give prompt notice of the corporate action approved by the
shareholders without a meeting. Such notice shall be given in the
manner specified in Section 2.5 of these by-laws. In the case
of approval of (i) a contract or transaction in which a
director has a direct or indirect financial interest, pursuant to
Section 310 of the Code, (ii) indemnification of a
corporate "agent", pursuant to Section 317 of the Code,
(iii) a reorganization of the corporation, pursuant to
Section 1201 of the Code, and (iv) a distribution in
dissolution other than in accordance with the rights of outstanding
preferred shares, pursuant to Section 2007 of the Code, the
notice shall be given at least ten (10) days before the
consummation of any action authorized by that
approval.
2.11 RECORD
DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING
CONSENTS.
For
purposes of determining the shareholders entitled to notice of any
meeting or to vote thereat or entitled to give consent to corporate
action without a meeting, the board of directors may fix, in
advance, a record date, which shall not be more than sixty (60)
days nor less than ten (10) days before the date of any such
meeting nor more than sixty (60) days before any such action
without a meeting, and in such event only shareholders of record on
the date so fixed are entitled to notice and to vote or to give
consents, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date,
except as otherwise provided in the Code.
If the
board of directors does not so fix a record date:
(a) the
record date for determining shareholders entitled to notice of or
to vote at a meeting of shareholders shall be at the close of
business on the business day next preceding the day
on
which notice is given or, if notice is waived, at the close of
business on the business day next preceding the day on which the
meeting is held; and
(b) the
record date for determining shareholders entitled to give consent
to corporate action in writing without a meeting, (i) when no
prior action by the board has been taken, shall be the day on which
the first written consent is given or (ii) when prior action
by the board has been taken, shall be the day on which the board
adopts the resolution relating to that action, or the sixtieth
(60th) day before the date of such other action, whichever is
later.
The
record date for any other purpose shall be as provided in
Article VIII of these by-laws.
2.12 PROXIES.
Every
person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more
agents authorized by a written proxy signed by the person and filed
with the secretary of the corporation. A proxy shall be deemed
signed if the shareholder's name is placed on the proxy (whether by
manual signature, typewriting or otherwise) by the shareholder or
the shareholder's attorney-in-fact. A validly executed proxy which
does not state that it is irrevocable shall continue in full force
and effect unless (i) revoked by the person executing it,
before the vote pursuant to that proxy, by a writing delivered to
the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and
voting in person by, the person executing the proxy or
(ii) written notice of the death or incapacity of the maker of
that proxy is received by the corporation before the vote pursuant
to that proxy is counted; provided, however, that no proxy shall be
valid after the expiration of eleven (11) months from the date of
the proxy, unless otherwise provided in the proxy. The revocability
of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of
the Code.
2.13 INSPECTORS
OF ELECTION.
Before
any meeting of shareholders, the board of directors may appoint an
inspector or inspectors of election to act at the meeting or its
adjournment. If no inspector of election is so appointed, the
chairman of the meeting may, and on the request of any shareholder
or a shareholder's proxy shall, appoint an inspector or inspectors
of election to act at the meeting. The number of inspectors shall
be either one (1) or three (3). If inspectors are appointed at a
meeting pursuant to the request of one (1) or more shareholders or
proxies, the holders of a majority of shares or their proxies
present at the meeting shall determine whether one (1) or three (3)
inspectors are to be appointed. If any person appointed as
inspector fails to appear or fails or refuses to act, the chairman
of the meeting may, and upon the request of any shareholder or a
shareholder's proxy shall, appoint a person to fill that
vacancy.
Such
inspectors shall:
(a) Determine
the number of shares outstanding and the voting power of each, the
number of shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of
proxies;
(b) Receive
votes, ballots or consents;
(c) Hear
and determine all challenges and questions in any way arising in
connection with the right to vote;
(d) Count
and tabulate all votes or consents;
(e) Determine
when the polls shall close;
(f) Determine
the result; and
(g) Do
any other acts that may be proper to conduct the election or vote
with fairness to all shareholders.
ARTICLE
III
DIRECTORS
3.1 POWERS.
Subject
to the provisions of the Code and any limitations in the articles
of incorporation and these by-laws relating to action required to
be approved by the shareholders or by the outstanding shares, the
business and affairs of the corporation shall be managed and all
corporate powers shall be exercised by or under the direction of
the board of directors.
3.2 NUMBER
AND QUALIFICATION OF DIRECTORS.
The
number of directors of the corporation shall be not less than four
(4) nor more than seven (7). The exact number of directors shall be
fixed from time to time, within the limits specified above, by a
resolution duly adopted by the board of directors. The indefinite
number of directors may be changed, or a definite number fixed
without provision for an indefinite number, by a duly adopted
amendment to this by-law duly adopted by the vote or written
consent of holders of a majority of the outstanding shares entitled
to vote; provided, however, that an amendment reducing the number
of the minimum number of directors to a number less than five (5)
cannot be adopted if the votes cast against its adoption at a
meeting of the shareholders, or the shares not consenting in the
case of action by written consent, are equal to more than sixteen
and two-thirds percent (16 2/3%) of the outstanding shares entitled
to vote thereon. No amendment may change the stated maximum number
of authorized directors to a number greater than two (2) times the
stated minimum number of directors minus one (1).
3.3 ELECTION
AND TERM OF OFFICE OF DIRECTORS.
Directors shall be
elected at each annual meeting of shareholders to hold office until
the next such annual meeting. Each director, including a director
elected to fill a vacancy, shall hold office until the expiration
of the term for which elected and until a successor has been
elected and qualified.
3.4 VACANCIES.
Vacancies in the
board of directors may be filled by a majority of the remaining
directors, though less than a quorum, or by a sole remaining
director, except that a vacancy created by the removal of a
director by the vote or written consent of the shareholders or by
court order may be filled only by the vote of a majority of the
shares entitled to vote thereon represented at a duly held meeting
at which a quorum is present, or by the written consent of holders
of a majority of the outstanding shares entitled to vote thereon.
Each director so elected shall hold office until the next annual
meeting of the shareholders and until a successor has been elected
and qualified.
A
vacancy or vacancies in the board of directors shall be deemed to
exist in the event of the death, resignation or removal of any
director, or if the board of directors by resolution declares
vacant the office of a director who has been declared of unsound
mind by an order of court or convicted of a felony, or if the
authorized number of directors is increased, or if the shareholders
fail, at any meeting of shareholders at which any director or
directors are elected, to elect the number of directors to be
elected at that meeting.
The
shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such
election, if by written consent, shall require the consent of the
holders of a majority of the outstanding shares entitled to vote
thereon.
Any
director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of
directors, unless the notice specifies a later time for that
resignation to become effective. If the resignation of a director
is effective at a future time, the board of directors may elect a
successor to take office when the resignation becomes
effective.
No
reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of
office expires.
3.5 PLACE
OF MEETINGS; MEETINGS BY TELEPHONE.
Regular
meetings of the board of directors may be held at any place within
or outside the State of California that has been designated from
time to time by resolution of the board. In the absence of such a
designation, regular meetings shall be held at the principal
executive office of the corporation. Special meetings of the board
may be held at any place within or outside the State of California
that has been designated in the notice of the meeting or, if not
stated in the notice or if there is no notice, at the principal
executive office of the corporation.
Any
meeting, regular or special, may be held by conference telephone or
similar communication equipment, so long as all directors
participating in the meeting can hear one another; and all such
directors shall be deemed to be present in person at the
meeting.
3.6 REGULAR
MEETINGS.
Regular
meetings of the board of directors may be held without notice if
the times of such meetings are fixed by the board of
directors.
3.7 SPECIAL
MEETINGS.
Special
meetings of the board of directors for any purpose or purposes may
be called at any time by the chairman of the board, the president,
any vice president, the secretary or any two
directors.
Notice
of the time and place of special meetings shall be delivered
personally, by telephone or by electronic transmission (in any
manner permissible under the Code) to each director or sent by
first-class mail, charges prepaid, addressed to each director at
that director's address as it is shown on the records of the
corporation. If the notice is mailed, it shall be deposited in the
United States mail at least four (4) days before the time of the
holding of the meeting. If the notice is delivered personally, or
by telephone or electronic transmission, it shall be delivered
personally or by telephone or electronic transmission at least
forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of
the director who the person giving the notice has reason to believe
will promptly communicate it to the director. The notice need not
specify the purpose or the place of the meeting, if the meeting is
to be held at the principal executive office of the
corporation.
3.8 QUORUM.
A
majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as
provided in Section 3.10 of these by-laws. Every act or
decision done or made by a majority of the directors present at a
duly held meeting at which a quorum is present shall be regarded as
the act of the board of directors, subject to the provisions of
Section 310 of the Code (as to approval of contracts or
transactions in which a director has a direct or indirect material
financial interest), Section 311 of the Code (as to
appointment of committees) and Section 317(e) of the Code (as
to indemnification of directors).
A
meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if
any action taken is approved by at least a majority of the required
quorum for that meeting.
3.9 WAIVER
OF NOTICE.
The
transactions of any meeting of the board of directors, however
called and noticed or wherever held, shall be as valid as though
had at a meeting duly held after regular call and notice if a
quorum is present and if, either before or after the meeting, each
of the directors not present signs a written waiver of notice, a
consent to holding the meeting or an approval of the minutes
thereof. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents and approvals
shall be filed with the corporate records or made a part of the
minutes of the meeting. Notice of a meeting shall also be deemed
given to any director who attends the meeting without protesting,
before or at its commencement, the lack of notice to that
director.
3.10 ADJOURNMENT.
A
majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting to another time and
place.
3.11 NOTICE
OF ADJOURNMENT.
Notice
of the time and place of holding an adjourned meeting need not be
given, unless the meeting is adjourned for more than twenty-four
(24) hours, in which case notice of the time and place shall be
given before the time of the adjourned meeting, in the manner
specified in Section 3.7 of these by-laws, to the directors
who were not present at the time of the adjournment.
3.12 ACTION
WITHOUT MEETING.
Any
action required or permitted to be taken by the board of directors
may be taken without a meeting, if all members of the board shall
individually or collectively consent in writing to that action.
Such action by written consent shall have the same force and effect
as a unanimous vote of the board of directors. Such written consent
and any counterparts thereof shall be filed with the minutes of the
proceedings of the board.
3.13 FEES
AND COMPENSATION OF DIRECTORS.
Directors and
members of committees may receive such compensation, if any, for
their services, and such reimbursement of expenses, as may be fixed
or determined by resolution of the board of directors. This
Section 3.13 shall not be construed to preclude any director
from serving the corporation in any other capacity as an officer,
agent, employee or otherwise, and receiving compensation for those
services.
ARTICLE
IV
COMMITTEES
4.1 COMMITTEES
OF DIRECTORS.
The
board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one (1) or more
committees, each consisting of two or more directors, to serve at
the pleasure of the board. The board may designate one (1) or more
directors as alternate members of any committee, who may replace
any absent member at any meeting of the committee. Any committee,
to the extent provided in the resolution of the board, shall have
all the authority of the board, except with respect
to:
(a) the
approval of any action which, under the Code, also requires
shareholders' approval or approval of the outstanding
shares;
(b) the
filling of vacancies in the board of directors or in any
committee;
(c) the
fixing of compensation of the directors for serving on the board or
any committee;
(d) the
amendment or repeal of these by-laws or the adoption of new
by-laws;
(e) the
amendment or repeal of any resolution of the board of directors
which by its express terms is not so amendable or
repealable;
(f) a
distribution to the shareholders of the corporation, except at a
rate or in a periodic amount or within a price range determined by
the board of directors; or
(g) the
appointment of any other committees of the board of directors or
the members of such committees.
4.2 MEETINGS
AND ACTION OF COMMITTEES.
Meetings and
actions of committees shall be governed by, and held and taken in
accordance with, the provisions of Article III of these
by-laws, Section 3.5 (place of meetings), Section 3.6
(regular meetings), Section 3.7 (special meetings and notice),
Section 3.8 (quorum.), Section 3.9 (waiver of notice),
Section 3.10 (adjournment), Section 3.11 (notice of
adjournment) and Section 3.12 (action without meeting), with
such changes in the context of those by-laws as are necessary to
substitute the committee and its members for the board of directors
and its members, except that the time of regular meetings of
committees may be determined either by resolution of the board of
directors or by resolution of the committee; special meetings of
committees may also be called by resolution of the board of
directors; and notice of special meetings of committees shall also
be given to all alternate members, who shall have the right to
attend all meetings of the committee. The board of directors may
adopt rules for the government of any committee not inconsistent
with the provisions of these by-laws.
ARTICLE
V
OFFICERS
5.1 OFFICERS.
The
officers of the corporation shall be a president, a secretary, and
a chief financial officer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, one
or more vice presidents, one or more assistant secretaries, one or
more assistant treasurers, and such other officers as may be
appointed in accordance with the provisions of Section 5.3 of
these by-laws. Any number of offices may be held by the same
person.
5.2 ELECTION
OF OFFICERS.
The
officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Section 5.3 or
Section 5.5 of these by-laws, shall be chosen by the board,
subject to the rights, if any, of an officer under any contract of
employment.
5.3 SUBORDINATE
OFFICERS.
The
board of directors may appoint, or may empower the president to
appoint, such other officers as the business of the corporation may
require, each of whom shall hold office for such period, have such
authority and perform such duties as are provided in these by-laws
or as the board of directors may from time to time
determine.
5.4 REMOVAL
AND RESIGNATION OF OFFICERS.
Subject
to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without
cause, by the board of directors at any regular or special meeting
of the board or, except in case of an officer chosen by the board
of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
Any
officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the
receipt of that notice or at any later time specified in that
notice; and, unless otherwise specified in that notice, the
acceptance of the resignation shall not be necessary to make it
effective. Any resignation is without prejudice to the rights, if
any, of the corporation under any contract to which the officer is
a party.
5.5 VACANCIES
IN OFFICES.
A
vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner
prescribed in these by-laws for regular appointments to that
office.
5.6 CHAIRMAN
OF THE BOARD.
The
chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise
and perform such other powers and duties as may be from time to
time assigned to him by the board of directors or prescribed by
these by-laws. If there is no president, the chairman of the board
shall also be the chief executive officer of the corporation and
shall have the powers and duties prescribed in Section 5.7 of
these by-laws.
5.7 PRESIDENT.
Subject
to such supervisory powers, if any, as may be given by the board of
directors to the chairman of the board, if there be such an
officer, the president shall be the chief executive officer of the
corporation and shall, subject to the control of the board of
directors, have general supervision, direction and control of the
business and the officers of the corporation. He shall preside at
all meetings of the shareholders and, in the absence of the
chairman of the board, or if there be none, at all meetings of the
board of directors. He shall have the general powers and duties of
management usually vested in the office of president of a
corporation, and shall have such other powers and duties as may be
prescribed by the board of directors or these bylaws.
5.8 VICE
PRESIDENTS.
In the
absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or,
if not ranked, a vice president designated by the board of
directors, shall perform all the duties of the president and when
so acting shall have all the powers of, and be subject to all the
restrictions upon, the president. The vice presidents shall have
such other powers and perform such other duties as from time to
time may be prescribed for them respectively by the board of
directors, these by-laws, the president or the chairman of the
board.
5.9 SECRETARY.
The
secretary shall keep or cause to be kept, at the principal
executive office of the corporation, or such other place as the
board of directors may direct, a book of minutes of all meetings
and actions of directors, committees of directors, and
shareholders, with the time and place of holding, whether regular
or special (and, if special, how authorized and the notice given),
the names of those present at directors' meetings or committee
meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof.
The
secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the
corporation's transfer agent or registrar, as determined by
resolution of the board of directors, a share register, or a
duplicate share register, showing the names of all shareholders and
their addresses, the number and classes of shares held by each, the
number and date of certificates evidencing such shares, and the
number and date of cancellation of every certificate surrendered
for cancellation.
The
secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the board of directors required by these
by-laws or by law to be given, and he shall keep the seal of the
corporation, if one be adopted, in safe custody and shall have such
other powers and perform such other duties as may be prescribed by
the board of directors or by these by-laws.
5.10 CHIEF
FINANCIAL OFFICER.
The
chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of
accounts of the properties and business transactions of the
corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, retained earnings,
and shares. The books of account shall at all reasonable times be
open to inspection by any director.
The
chief financial officer shall deposit all money and other valuables
in the name and to the credit of the corporation with such
depositaries as may be designated by the board of directors. He
shall disburse the funds of the corporation as may be ordered by
the board of directors, shall render to the president and
directors, whenever they request it, an account of all of his
transactions as chief financial officer and of the financial
condition of the corporation, and shall have such other powers and
perform such other duties as may be prescribed by the board of
directors or these by-laws.
ARTICLE
VI
INDEMNIFICATION OF DIRECTORS, AND OFFICERS, EMPLOYEES
AND OTHER AGENTS
6.1 INDEMNIFICATION
OF DIRECTORS AND OFFICERS.
The
corporation shall, to the maximum extent and in the manner
permitted by the Code, indemnify each of its directors and officers
against expenses (as defined in Section 317(a) of the Code),
judgments, fines, settlements, and other amounts actually and
reasonably incurred in
connection with any
proceeding (as defined in Section 317(a) of the Code), arising
by reason of the fact that such person is or was an agent of the
corporation. For purposes of this Article VI, a "director" or
"officer" of the corporation includes any person (i) who is or
was a director or officer of the corporation, (ii) who is or
was serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise, or (iii) who was a director or officer of
a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such
predecessor corporation.
6.2 INDEMNIFICATION
OF OTHERS.
The
corporation shall have the power, to the extent and in the manner
permitted by the Code, to indemnify each of its employees and
agents (other than directors and officers) against expenses (as
defined in Section 317(a) of the Code), judgments, fines,
settlements, and other amounts actually and reasonably incurred in
connection with any proceeding (as defined in Section 317(a) of the
Code), arising by reason of the fact that such person is or was an
agent of the corporation. For purposes of this Article VI, an
"employee" or "agent" of the corporation (other than a director or
officer) includes any person (i) who is or was an employee or
agent of the corporation, (ii) who is or was serving at the
request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
or (iii) who was an employee or agent of a corporation which
was a predecessor corporation of the corporation or of another
enterprise at the request of such predecessor
corporation.
6.3 PAYMENT
OF EXPENSES IN ADVANCE.
Expenses incurred
in defending any civil or criminal action or proceeding for which
indemnification is required pursuant to Section 6.1 or for
which indemnification is permitted pursuant to Section 6.2
following authorization thereof by the Board of Directors shall be
paid by the corporation in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by or on behalf
of the indemnified party to repay such amount if it shall
ultimately be determined that the indemnified party is not entitled
to be indemnified as authorized in this
Article VI.
6.4 INDEMNITY
NOT EXCLUSIVE.
The
indemnification provided by this Article VI shall not be
deemed exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to
action in an official capacity and as to action in another capacity
while holding such office, to the extent that such additional
rights to indemnification are authorized in the Articles of
Incorporation.
6.5 INSURANCE
INDEMNIFICATION.
The
corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee
or agent of the corporation against any liability asserted against
or incurred by such person in such capacity or arising out of such
person's status as such, whether or not the corporation would have
the power to indemnify him against such liability under the
provisions of this Article VI.
6.6 CONFLICTS.
No
indemnification or advance shall be made under this
Article VI, except where such indemnification or advance is
mandated by law or the order, judgment or decree of any court of
competent jurisdiction, in any circumstance where it
appears:
(a) That
it would be inconsistent with a provision of the Articles of
Incorporation, these bylaws, a resolution of the shareholders or an
agreement in effect at the time of the accrual of the alleged cause
of the action asserted in the proceeding in which the expenses were
incurred or other amounts were paid, which prohibits or otherwise
limits indemnification; or
(b) That
it would be inconsistent with any condition expressly imposed by a
court in approving a settlement.
ARTICLE
VII
RECORDS AND REPORTS
7.1 MAINTENANCE
AND INSPECTION OF SHARE REGISTER.
The
corporation shall keep at its principal executive office, or at the
office of its transfer agent or registrar, if either be appointed
and as determined by resolution of the board of directors, a record
of its shareholders, giving the names and addresses of all
shareholders and the number and class of shares held by each
shareholder.
A
shareholder or shareholders of the corporation holding at least
five percent (5%) in the aggregate of the outstanding voting shares
of the corporation or who holds at least one percent (1%) of such
voting shares and has filed a Schedule 14B with the Securities
and Exchange Commission relating to the election of directors, may
(i) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours on five (5)
days' prior written demand on the corporation, (ii) obtain
from the transfer agent of the corporation, on written demand and
on the tender of such transfer agent's usual charges for such list,
a list of the names and addresses of the shareholders who are
entitled to vote for the election of directors, and their
shareholdings, as of the most recent record date for which that
list has been compiled or as of a date specified by the shareholder
after the date of demand. Such list shall be made available to any
such shareholder by the transfer agent on or before the later of
five (5) days after the demand is received or five (5) days after
the date specified in the demand as the date as of which the list
is to be compiled.
The
record of shareholders shall also be open to inspection on the
written demand of any shareholder or holder of a voting trust
certificate, at any time during usual business hours, for a purpose
reasonably related to the holder's interests as a shareholder or as
the holder of a voting trust certificate.
Any
inspection and copying under this Section 7.1 may be made in
person or by an agent or attorney of the shareholder or holder of a
voting trust certificate making the demand.
7.2 MAINTENANCE
AND INSPECTION OF BY-LAWS.
The
corporation shall keep at its principal executive office, or if its
principal executive office is not in the State of California, at
its principal business office in such state, the original or a copy
of these by-laws as amended to date, which bylaws shall be open to
inspection by the shareholders at all reasonable times during
office hours. If the principal executive office of the corporation
is outside the State of California and the corporation has no
principal business office in such state, the secretary shall, upon
the written request of any shareholder, furnish to that shareholder
a copy of these by-laws as amended to date.
7.3 MAINTENANCE
AND INSPECTION OF OTHER CORPORATE RECORDS.
The
accounting books and records, and the minutes of proceedings of the
shareholders and the board of directors and any committee or
committees of the board of directors, shall be kept at such place
or places designated by the board of directors or, in absence of
such designation, at the principal executive office of the
corporation. The minutes shall be kept in written form and the
accounting books and records shall be kept either in written form
or in any other form capable of being converted into written
form.
The
minutes and accounting books and records shall be open to
inspection upon the written demand of any shareholder or holder of
a voting trust certificate, at any reasonable time during usual
business hours, for a purpose reasonably related to the holder's
interests as a shareholder or as the holder of a voting trust
certificate. The inspection may be made in person or by an agent or
attorney, and shall include the right to copy and make extracts.
Such rights of inspection shall extend to the records of each
subsidiary corporation of the corporation.
7.4 INSPECTION
BY DIRECTORS.
Every
director shall have the absolute right at any reasonable time to
inspect all books, records and documents of every kind and the
physical properties of the corporation and each of its subsidiary
corporations. Such inspection by a director may be made in person
or by an agent or attorney, and the right of inspection includes
the right to copy and make extracts of documents.
7.5 ANNUAL
REPORT TO SHAREHOLDERS; WAIVER.
The
board of directors shall cause an annual report to be sent to the
shareholders not later than one hundred twenty (120) days after the
close of the fiscal year adopted by the corporation. Such report
shall be sent at least fifteen (15) days before the annual meeting
of shareholders to be held during the next fiscal year and in the
manner specified in Section 2.5 of these by-laws for giving
notice to shareholders of the corporation.
The
annual report shall contain a balance sheet as of the end of the
fiscal year and an income statement and statement of changes in
financial position for the fiscal year, accompanied by any report
of independent accountants or, if there is no such report, the
certificate of an authorized officer of the corporation that the
statements were prepared without audit from the books and records
of the corporation.
The
foregoing requirement of an annual report may be waived by the
board so long as the shares of the corporation are held by less
than one hundred (100) holders of record.
7.6 FINANCIAL
STATEMENTS.
A copy
of any annual financial statement and any income statement of the
corporation for each quarterly period of each fiscal year, and any
accompanying balance sheet of the corporation as of the end of each
such period, that has been prepared by the corporation shall be
kept on file in the principal executive office of the corporation
for twelve (12) months; and each such statement shall be exhibited
at all reasonable times to any shareholder demanding an examination
of any such statement or a copy shall be mailed to any such
shareholder.
If a
shareholder or shareholders holding at least five percent (5%) of
the outstanding shares of any class of stock of the corporation
makes a written request to the corporation for an income statement
of the corporation for the three-month, six-month or nine-month
period of the then current fiscal year ended more than thirty (30)
days before the date of the request, and for a balance sheet of the
corporation as of the end of that period, the chief financial
officer shall cause that statement to be prepared, if not already
prepared, and shall deliver personally or mail that statement or
statements to the person making the request within thirty (30) days
after the receipt of the request. If the corporation has not sent
to the shareholders its annual report for the last fiscal year,
such report shall likewise be delivered or mailed to the
shareholder or shareholders within thirty (30) days after the
request.
The
corporation shall also, on the written request of any shareholder,
mail to the shareholder a copy of the last annual, semi-annual or
quarterly income statement which it has prepared, and a balance
sheet as of the end of that period.
The
quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any
independent accountants engaged by the corporation or the
certificate of an authorized officer of the corporation that the
financial statements were prepared without audit from the books and
records of the corporation.
ARTICLE
VIII
GENERAL MATTERS
8.1 RECORD
DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING.
For
purposes of determining the shareholders 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 other
lawful action (other than action by shareholders by written consent
without a meeting), the board of directors may fix, in advance, a
record date, which shall not be more than sixty (60) days before
any such action, and in that case only shareholders of record on
the date so fixed are entitled to receive the dividend,
distribution or allotment of rights, or to exercise such rights, as
the case may be, notwithstanding any transfer of any shares on the
books of the corporation after the record date so fixed, except as
otherwise provided in the Code.
If the
board of directors does not so fix a record date, the record date
for determining shareholders for any such purpose shall be at the
close of business on the day on which the board adopts the
applicable resolution or the sixtieth (60th) day before the date of
that action, whichever is later.
8.2 CHECKS,
DRAFTS, EVIDENCES OF INDEBTEDNESS.
All
checks, drafts, or other orders for payment of money, notes, or
other evidences of indebtedness, issued in the name of or payable
to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be
determined by resolution of the board of directors.
8.3 CORPORATE
CONTRACTS AND INSTRUMENTS: HOW EXECUTED.
The
board of directors, except as otherwise provided in these by-laws,
may authorize any officer or officers, or agent or agents, to enter
into any contract or execute any instrument in the name of and on
behalf of the corporation, and such authority may be general or
confined to specific instances; and, unless so authorized or
ratified by the board of directors or within the agency power of an
officer, no officer, agent or employee shall have any power or
authority to bind the corporation by any contract or engagement or
to pledge its credit or to render it liable for any purpose or for
any amount.
8.4 CERTIFICATES
FOR SHARES.
A
certificate or certificates for shares of the corporation shall be
issued to each shareholder when any of such shares are fully paid,
and the board of directors may authorize the issuance of
certificates or shares as partly paid provided that these
certificates shall state the amount of the consideration to be paid
for them and the amount paid. All certificates shall be signed in
the name of the corporation by the chairman or vice chairman of the
board or the president or a vice president and by the chief
financial officer or an assistant treasurer or the secretary or any
assistant secretary, certifying the number of shares and the class
or series of shares owned by the shareholder. Any or all of the
signatures on the certificate may be facsimile. In case any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on a certificate has ceased to
be that such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the
same effect as if such person were an officer, transfer agent or
registrar at the date of issue.
Nothwithstanding
the foregoing paragraph, the corporation may adopt a system of
issuance, recordation and transfer of its shares by electronic or
other means not involving any issuance of certificates, including
provisions for notice to purchasers in substitution for the
required statements on certificates under Sections 417, 418
and 1302 of the Code, and as may be required by the commissioner in
administering the California Corporate Securities Law of 1968,
which system (1) has been approved by the United States
Securities and Exchange Commission, (2) is authorized in any
statute of the United States, or (3) is in accordance with
Division 8 of the California Commercial Code. Any system so adopted
shall not become effective as to issued and outstanding
certificated securities until the certificates therefor have been
surrendered to the corporation.
8.5 LOST
CERTIFICATES.
Except
as provided in this Section 8.5, no new certificates for
shares shall be issued to replace a previously issued certificate
unless the latter is surrendered to the corporation and cancelled
at the same time. The board of directors may, in case any share
certificate or certificate for any other security is lost, stolen
or destroyed, authorize the issuance of replacement certificates on
such terms and conditions as the board may require, including
provision for indemnification of the corporation secured by a bond
or other adequate security sufficient to protect the corporation
against any claim that may be made against it, including any
expense or liability, on account of the alleged loss, theft or
destruction of the certificate or the issuance of the replacement
certificate.
8.6 CONSTRUCTION
AND DEFINITIONS.
Unless
the context requires otherwise, the general provisions, rules of
construction and definitions in the Code shall govern the
construction of these by-laws. Without limiting the generality of
this provision, the singular number includes the plural, the Plural
number includes the singular, and the term "person" includes both a
corporation and a natural person.
ARTICLE
IX
AMENDMENTS
9.1 AMENDMENT
BY SHAREHOLDERS.
New
by-laws may be adopted or these by-laws may be amended or repealed
by the vote or written consent of holders of a majority of the
outstanding shares entitled to vote; provided, however, that if the
articles of incorporation of the corporation set forth the number
of authorized directors of the corporation, the authorized number
of directors may be changed only by an amendment of the articles of
incorporation.
9.2 AMENDMENT
BY DIRECTORS.
Subject
to the rights of the shareholders as provided in Section 9.1
of these by-laws, by-laws, other than a by-law or an amendment of a
by-law changing the authorized number of directors (except to fix
the authorized number of directors pursuant to a by-law providing
for a variable number of directors), may be adopted, amended, or
repealed by the board of directors.