**EXHIBIT 3.1**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AMENDED AND RESTATED BYLAWS 

OF 

MERCURY GENERAL CORPORATION 

 

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AMENDED AND RESTATED BYLAWS 

OF 

MERCURY GENERAL CORPORATION 

ARTICLE I 

OFFICES 

Section 1. PRINCIPAL OFFICES. 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 executiveoffice is located outside this state, and the corporation has one or more business offices in this state, the Board of Directors shall likewise fix and designate a principal business office in the State of California. 

Section 2. OTHER OFFICES. The Board of Directors may at any time establish branch or subordinate offices at any place or places where thecorporation is qualified to do business. 

ARTICLE II 

MEETINGS OF SHAREHOLDERS 

Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at anyplace 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. 

Section 2. ANNUAL MEETINGS OF SHAREHOLDERS. The annual meeting of shareholders shall be held each year on a date and at a time designated by theBoard of Directors. At each annual meeting directors shall be elected and any other proper business may be transacted. 

Section 3.SPECIAL MEETINGS. 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 notless than 10% of the votes at any such 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 by telegraphic or other facsimile transmission tothe Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving such request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance 

 

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with the provisions of Sections 4 and 5 of this Article II, 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 thenotice. Nothing contained in this paragraph of this Section 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. 

Section 4. NOTICE OF SHAREHOLDERS’ MEETINGS. All notices of meetings of shareholders shall be sent or otherwise given in accordance withSection 5 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting being noticed. The notice shall specify the place, date and hour of the meeting and (i) in the case of a specialmeeting, the general nature of the business to 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 noticeof any meeting at which directors are to be elected shall include the name of any nominee or nominees which, 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 indirectfinancial interest, pursuant to Section 310 of the Corporations Code of California, (ii) an amendment of the articles of incorporation, pursuant to Section 902 of such Code, (iii) a reorganization of the corporation, pursuant toSection 1201 of such Code, (iv) a voluntary dissolution of the corporation, pursuant to Section 1900 of such Code, or (v) a distribution in dissolution other than in accordance with the rights of outstanding preferred sharespursuant to Section 2007 of such Code, the notice shall also state the general nature of such proposal. 

Section 5. MANNER OFGIVING NOTICE; AFFIDAVIT OF NOTICE. Notice of any meeting of shareholders shall be given either personally or by first-class mail or telegraphic or other written communication, charges prepaid, addressed to the shareholder at the address of suchshareholder 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 has been so given, notice shall be deemed to have beengiven if sent by first-class mail or telegraphic 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 such office is located.Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication. 

If any notice addressed to a shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that theUnited States Postal Service is unable to deliver the notice to the shareholder at such 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 uponwritten demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of such notice. 

 

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An affidavit of the mailing or other means of giving any notice of any shareholders’ meeting shallbe executed by the Secretary, Assistant Secretary or any transfer agent of the corporation giving such notice, and shall be filed and maintained in the minute book of the corporation. 

Section 6. QUORUM. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of shareholdersshall constitute a quorum for the transaction of business. 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 toleave 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. 

Section 7. ADJOURNED MEETING AND NOTICE THEREOF. 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 sharesrepresented at such meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at such meeting, except as provided in Section 6 of this Article II. 

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 ifthe time and place thereof 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 theoriginal meeting, in which case the Board of Directors shall set a new record date. Notice of any such adjourned meeting, if required, shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with theprovisions of Sections 4 and 5 of this Article II. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. 

Section 8. VOTING. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions ofSection 11 of this Article II, subject to the provisions of Sections 702 to 704, inclusive, of the Corporations Code of California (relating to voting shares held by a fiduciary, in the name of a corporation or in joint ownership). Such votemay be by voice vote or by ballot; provided, however, that all elections for directors must be by ballot upon demand by a shareholder at any election and before the voting begins. Any shareholder entitled to vote on any matter (other than theelection of directors) 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 such shareholder is votingaffirmatively, it will be conclusively presumed that the shareholder’s approving vote is with respect to all shares such shareholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the shares represented atthe meeting and voting on any matter (other than the election of directors), provided that the shares voting affirmatively must also constitute at least a majority of the required quorum, shall be the act of the shareholders, unless the vote of agreater number or voting by classes is required by the California General Corporation Law or the articles of incorporation. 

At ashareholders’ meeting involving the election of directors, no shareholder shall be entitled to cumulate votes (i.e., cast for any candidate a number of votes greater than the 

 

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number of the shareholder’s shares) unless such candidate or candidates’ names have been placed in nomination prior to commencement of the votingand 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 notice, then every shareholder entitled to vote may cumulate such shareholder’svotes for candidates 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 such shareholder’s shares are entitled, or distribute the shareholder’svotes 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. 

Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of shareholders, either annual or special, howevercalled 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 tovote, 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 thepurpose 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 4 of this Article II, the waiver of notice orconsent shall state the general nature of such proposal. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. 

Attendance of a person at a meeting shall also constitute a waiver of notice of such meeting, except when the person objects, at the beginning of themeeting, 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 matters not included in the notice of themeeting if such objection is expressly made at the meeting. 

Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Anyaction 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 notless 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. In the case of election of directors, such consent shall be effectiveonly 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 not created by removal and not filled by the directors by thewritten consent of the holders of a majority of the outstanding shares entitled to vote for the election of directors. All such consents shall be filed with the Secretary of the corporation and shall be maintained in the corporate records. Anyshareholder 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 holder, may revoke the consent by a writing received by theSecretary of the corporation prior to the time that written consents of the number of shares required to authorize the proposed action have been filed with the Secretary. 

 

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Unless the consents of all shareholders entitled to vote have been solicited in writing, the Secretaryshall give prompt notice of any corporate action approved by the shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. Such notice shall be given in the mannerspecified in Section 5 of this Article II. In the case of approval of (i) contracts or transactions in which a director has a direct or indirect financial interest, pursuant to Section 310 of the Corporations Code of California,(ii) indemnification of agents of the corporation, pursuant to Section 317 of such Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of such Code, or (iv) a distribution in dissolution other than inaccordance with the rights of outstanding preferred shares pursuant to Section 2007 of such Code, such notice shall be given at least ten (10) days before the consummation of any such action authorized by any such approval. 

Section 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING, AND GIVING CONSENTS. For purposes of determining the shareholders entitled to notice of anymeeting or to vote 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 prior to the date ofany such meeting nor more than sixty (60) days prior to such action without a meeting, and in such case only shareholders of record at the close of business on the date so fixed are entitled to notice and to vote or to give consents, as thecase may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid, except as otherwise provided in the California General Corporation Law. 

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 if 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. 

(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 of the Board has been taken, shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such other action, whichever islater. 

Section 12. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so eitherin 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, telegraphic transmission 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) revokedby the person executing it, prior to the vote pursuant thereto, by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy presented to the meeting and executed by, or attendance at the meeting and voting inperson by, the person executing the proxy; or (ii) written notice of the 

 

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death or incapacity of the maker of such proxy is received by the corporation before the vote pursuant thereto is counted; provided, however, that no suchproxy shall be valid after the expiration of eleven (I 1) months from the date of such 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 ofSection 705(e) and (f) of the Corporations Code of California. 

Section 13. INSPECTORS OF ELECTION. Before any meeting ofshareholders, the Board of Directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairman of the meeting may, and onthe request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one (1) or three (3). If inspectors are appointed at a meeting on the request of one ormore 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 orfails 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 such vacancy. 

The duties of these inspectors shall be as follows: 

(a) Determine the number of shares outstanding and the voting power of each, the 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. 

Section 14. NOTICE FOR PROPOSALS BY SHAREHOLDERS. 

(a) Nominations of persons for election to the Board ofDirectors of the corporation and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders (i) pursuant to the corporation’s notice of meeting, (ii) by or at the direction(iii) by any shareholder of the corporation who was a shareholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw.

 

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(b) For nominations or other business to be properly brought before an annual meeting bya shareholder pursuant to clause (iii) of paragraph (a) of this Bylaw, the shareholder must have given timely notice thereof in writing to the Secretary of the corporation and such other business must otherwise be a proper matter forshareholder action. To be timely, a shareholder’s notice shall be delivered to the Secretary at the principal executive offices of the corporation not later than 120 days prior to the first anniversary of the preceding year’s annualmeeting; provided, however, that in the event no annual meeting was held, or the date of the meeting changed more than 30 days from the prior year, such number of days as the Board of Directors may determine in its sole discretion, suchdetermination to be communicated by the corporation to shareholders of the corporation no later than 30 days before such deadline by public announcement or by any other means determined by the Board of Directors, in its sole discretion, to beappropriate for the notification of shareholders. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a shareholder’s notice as described above. Such shareholder’snotice shall set forth (i) as to each person whom the shareholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for electionof directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities and Exchange Act of 1934 (the “Exchange Act”) and Rule 14A-11 thereunder (including such person’s writtenconsent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to bebrought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the nomination or proposal is made and (iii) asto the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (a) the name and address of such shareholder, as they appear on the corporation’s books, and of such beneficial ownerand (b) the class and number of shares of the corporation which are owned beneficially and of record by such shareholder and such beneficial owner. 

(c) Notwithstanding the foregoing provisions of this Bylaw, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to matters setforth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of shareholders to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act. 

ARTICLE III 

DIRECTORS 

Section 1. POWERS. Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation andthese bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and 

 

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affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. 

Without prejudice to such general powers, but subject to the same limitations, it is hereby expressly declared that the directors shall have the powerand authority to: 

(a) Select and remove all officers, agents, and employees of the corporation, ‘prescribe such powersand duties for them as may not be inconsistent with law, the articles of incorporation or these bylaws, fix their compensation, and require from them security for faithful service. 

(b) Change the principal executive office or the principal business office in the State of California from one location to another; causethe corporation to be qualified to do business in any other state, territory, dependency, or foreign country and conduct business within or outside the State of California; designate any place within or without the State for the holding of anyshareholders’ meeting or meetings, including annual meetings; adopt, make and use a corporate seal, and prescribe the forms of certificates of stock, and alter the form of such seal and of such certificates from time to time as in theirjudgment they may deem best, provided that such forms shall at all times comply with the provisions of law. 

(c) Authorizethe issuance of shares of stock of the corporation from time to time, upon such terms as may be lawful, in consideration of money paid, labor done or services actually rendered, debts or securities cancelled or tangible or intangible propertyactually received. 

(d) Borrow money and incur indebtedness for the purposes of the corporation, and cause to be executedand delivered therefor, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, or other evidences of debt and securities therefor. 

Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The number of directors of the corporationshall be not fewer than eight (8) nor more than fifteen (15). The exact number of directors shall be nine (9) until changed, within the limits specified above, by a bylaw amending this Section 2, duly adopted by the Board of Directorsor by the shareholders. Such indefinite number of directors may be changed, or a definite number fixed without provision for an indefinite number, by a duly adopted amendment to the Articles of Incorporation or by an amendment to this bylaw dulyadopted 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 or the minimum number of directors to a number less than five cannot be adopted ifthe 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 16 2/3% of the outstanding shares entitled to vote. No amendment may change the stated maximum number of authorized directors to a number greater than two times the stated minimum number ofdirectors minus one. 

 

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Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS. Directors shall be elected at each annualmeeting of the shareholders to hold office until the next 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 andqualified. 

Section 4. VACANCIES. Vacancies in the Board of Directors may be filled by a majority of the remaining directors, thoughless 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 sharesrepresented and voting at a duly held meeting at which a quorum is present, or by the written consent of holders of all outstanding shares entitled to vote. Each director so elected shall hold office until the next annual meeting of the shareholdersand until a successor has been elected and qualified. 

A vacancy or vacancies in the Board of Directors shall be deemed to exist in thecase 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 authorizednumber of directors be increased, or if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for 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 bywritten consent, other than to fill a vacancy created by removal, shall require the consent of a majority of the outstanding shares entitled to vote. 

Any director may resign upon giving written notice to the Chairman of the Board, the President, the Secretary or the Board of Directors. A resignation shall be effective upon the giving of the notice, unless thenotice specifies a later time for its effectiveness. 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 prior to the expiration of his term of office.

Section 5. PLACE OF MEETINGS AND TELEPHONIC MEETINGS. Regular meetings of the Board of Directors may be held at any place within orwithout the State that has been designated from time to time by resolution of the board. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall beheld at any place within or without the State that has been designated in the notice of the meeting or, if not stated in the notice or there is no notice, at the principal executive office of the corporation. Any meeting, regular or special, may beheld by conference telephone or similar communication equipment, so long as all directors participating in such meeting can hear one another, and all such directors shall be deemed to be present in person at such meeting. 

 

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Section 6. ANNUAL MEETINGS. Immediately following each annual meeting of shareholders, the Board ofDirectors shall hold a regular meeting for the purpose of organization, any desired election of officers and the transaction of other business. Notice of this meeting shall not be required. 

Section 7. OTHER REGULAR MEETINGS. Other regular meetings of the Board of Directors shall be held without call at such time as shall from time totime be fixed by the Board of Directors. Such regular meetings may be held without notice. 

Section 8. SPECIAL MEETINGS. Specialmeetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairman of the Board or the President or any Vice President or the Secretary or any two directors. 

Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram,charges prepaid, addressed to each director at his or her address as it is shown upon the records of the corporation. In case such notice is mailed, it shall be deposited in the United States mail at least four (4) days prior to the time of theholding of the meeting. In case such notice is delivered personally, or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours prior to the time of the holding ofthe meeting. Any oral notice given personally or by telephone may be communicated to either 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 thedirector. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation. 

Section 9. DISPENSING WITH 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 calland notice if a quorum be 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 consentneed 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 need not be given to any director who attends themeeting without protesting, prior thereto or at its commencement, the lack of notice to such director. 

Section 10. QUORUM. A majorityof the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as hereinafter provided. Every act or decision done or made by a majority of the directors present at a meeting duly held at which aquorum is present shall be regarded as the act of the Board of Directors, subject to the provisions of Section 310 of the Corporations Code of California (approval of contracts or transactions in which a director has a direct or indirectmaterial financial interest), Section 311 (appointment of committees), and Section 317 (e) (indemnification of directors). A meeting at which a quorum is initially present may continue to transact business notwithstanding thewithdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting. 

 

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Section 11. ADJOURNMENT. A majority of the directors present, whether or not constituting a quorum,may adjourn any meeting to another time and place. 

Section 12. NOTICE OF ADJOURNMENT. Notice of the time and place of holding anadjourned meeting need not be given, unless the meeting is adjourned for more than twenty-four (24) hours, in which case notice of such time and place shall be given prior to the time of the adjourned meeting, in the manner specified inSection 8 of this Article III, to the directors who were not present at the time of the adjournment. 

Section 13. ACTION WITHOUTMEETING. 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 such action. Such action by written consent shallhave the same force and effect as a unanimous vote of the Board of Directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board. 

Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors and members of committees may receive such compensation, if any, for their services, andsuch reimbursement of expenses, as may be fixed or determined by resolution of the Board of Directors. Nothing herein contained shall 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 such services. 

ARTICLE IV 

COMMITTEES 

Section 1. COMMITTEES OF DIRECTORS. The Board of Directors may, byresolution adopted by a majority of the authorized number of directors, designate one or more committees, each consisting of two or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternatemembers of any committee, who may replace any absent member at any meeting of the committee. Any such 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 General Corporation Law of California, also requires shareholders’ approval orapproval of the outstanding shares; 

(b) the filling of vacancies on the Board of Directors or in any committee; 

(c) the fixing of compensation of the directors for serving on the board or on any committee; 

(d) the amendment or repeal of bylaws or the adoption of new bylaws; 

 

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(e) the amendment or repeal of any resolution of the Board of Directors which by itsexpress terms is not so amendable or repealable; 

(f) a distribution to the shareholders of the corporation, except at arate or in a periodic amount or within a price range determined by the Board of Directors; or 

(g) the appointment of anyother committees of the Board of Directors or the members thereof. 

Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and actionof committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Sections 5 (place of meetings), 7 (regular meeting), 8 (special meetings and notice), 9 (dispensing with notice), 10 (quorum),11 (adjournment), 12 (notice of adjournment) and 13 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board of Directors and its members, except that thetime of regular meetings of committees may be determined by resolution of the Board of Directors as well as the committee, special meetings of committees may also be called by resolution of the Board of Directors and notice of special meetings ofcommittees 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 thesebylaws. 

ARTICLE V 

OFFICERS

Section 1. OFFICERS. The officers of the corporation shall be a Chief Executive Officer, a President, a Secretary and a ChiefFinancial 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 maybe appointed in accordance with the provisions of Section 3 of this Article V. Any number of offices may be held by the same person. 

Section 2. ELECTION OF OFFICERS. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 of this Article V, shall be chosen by the Board of Directors, and each shallserve at the pleasure of the Board, subject to the rights, if any, of an officer under any contract of employment. 

Section 3.SUBORDINATE OFFICERS, ETC. The Board of Directors may empower the Chief Executive Officer to appoint all officers, other than the President, as the business of the corporation may require, each of whom shall hold office for such period, have suchauthority and perform such duties as are provided in the Bylaws or as the Board of Directors or the Chief Executive Officer, as the case may be, may from time to time determine. 

Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to the rights, of any, of an officer under any contract of employment, any officer may beremoved, either with or without cause, by the Board of Directors, at any regular or special meeting thereof, 

 

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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 such resignation shall take effect at the date of thereceipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any such resignation is without prejudice to the rights, if any,of the corporation under any contract to which the officer is a party. 

Section 5. VACANCIES IN OFFICE. A vacancy in any officebecause of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these Bylaws for regular appointments to such office. 

Section 6. CHAIRMAN OF THE BOARD. The Chairman of the Board, if such officer be elected, shall, if present, preside at all meetings of the Board ofDirectors 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 the Bylaws. If there is no Chief Executive Officer, the Chairman of the Board shall in addition bethe Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V. 

Section 7. CHIEF EXECUTIVE OFFICER. The Board of Directors shall appoint a Chief Executive Officer. In the absence of such appointment, the Chairman of the Board shall be the Chief Executive Officer of the Corporation. The ChiefExecutive Officer shall have the general responsibility for implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation. He shall preside at allmeetings 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. 

Section 8. PRESIDENT. Subject to such supervisory powers, if any, as may be given by the Board of Directors to the Chairman of the Board or the Chief Executive Officer, the President shall be the chief operating officer of thecorporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the operations and the officers of the corporation. He shall have the general powers and duties of management usually vestedin 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 the Bylaws. 

Section 9. 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 bythe 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 President shall have such other powers and perform suchother duties as from time to time may be prescribed for them respectively by the Board of Directors or the Bylaws, the President or the Chairman of the Board if there is no President. 

Section 10. SECRETARY. The Secretary shall keep or cause to be kept, at the principal executive officer or such other place as the Board ofDirectors may order, a book of minutes of all meetings and actions of directors, committees of directors and shareholders, with 

 

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the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present atdirectors’ and 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 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 duplicateshare 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 or uncertificated shares issued for the same, and the number and date of cancellation ofevery certificate surrendered for cancellation. 

The Secretary shall give, or cause to be given, notice of all meetings of the shareholdersand of the Board of Directors required by the Bylaws 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 theBoard of Directors or by the Bylaws. 

Section 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall keep and maintain, orcause 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 be open at all reasonable times to inspection by any director. 

The ChiefFinancial Officer shall deposit all moneys and other values in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He shall disburse the funds of the corporation as may be ordered bythe 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 other powers andperform such other duties as may be prescribed by the Board of Directors or the Bylaws. 

ARTICLE VI 

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND 

OTHER AGENTS 

Section 1. SCOPE OF INDEMNIFICATION. 

(a) The corporation shall, to the broadest and maximum extent permitted by law, indemnify each person who was or is a party or isthreatened to be made a party to any proceeding by reason of the fact that such person is or was a director of the corporation, or is or was serving at the request of the corporation as a director of another corporation or other enterprise, againstexpenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding. In addition, the corporation shall, to the broadest and maximum extent permitted by law,promptly upon demand pay to such person any and all expenses (including attorneys’ fees) incurred in defending or settling any such proceeding in advance of the final disposition of such proceeding upon receipt of an 

 

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undertaking by or on behalf of the director to repay such amount if it shall ultimately be determined by a final judgment or other final adjudication thatsuch person is not entitled to be indemnified by the corporation as authorized as this Section 1. 

(b) If a claimunder paragraph a. of this Section 1 is not paid in full by the corporation within 45 days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover theunpaid amount of the claim and, if successful in whole or in part, the claimant shall also be entitled to be paid the expenses of prosecuting such claim, including attorneys’ fees. It shall be a defense to any such action (other than an actionbrought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the corporation) that the claimant has not met the standards of conduct which makeit permissible under the California Corporations Code for the corporation to indemnify the claimant for the amount claimed, but the burden or proving such defense by clear and convincing evidence shall be on the corporation. 

(c) The Board of Directors may in its discretion provide by resolution for such indemnification of, or advance of expenses to, officers,employees or agents of the corporation, and likewise may refuse to provide for such indemnification or advance of expenses except to the extent such indemnification is mandatory under the California General Corporation Law. 

Section 2. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the advancement of expenses conferred in this Article VI shall not beexclusive of any other right which any person may have or hereafter acquire under any statute, the corporation’s articles of incorporation or any bylaw, agreement, vote of shareholders or disinterested directors or otherwise. 

Section 3. TERM AND HEIRS. The rights to indemnification and advancement of expenses conferred in this Article VI shall continue as to any personwho has ceased to be a director with respect to any acts or omissions that occurred during the time such person was a director and shall inure to the benefit of the heirs, executors and administrators of each such person. 

Section 4. SEVERABILITY. If any provision of this Article VI shall be found, in any proceeding or appeal therefrom or in any other circumstances oras to any person entitled to indemnification hereunder to be unenforceable, ineffective or invalid for any reason, the enforceability, effect and validity of the remaining parts or of such parts in other circumstances shall not be affected, exceptas otherwise required by applicable law. 

Section 5. AMENDMENTS. The provisions of this Article VI shall be deemed to constitute anagreement between the corporation and each of the persons entitled to indemnification hereunder, for as long as such provisions remain in effect. Any amendment to the provisions of this Article VI which limits or otherwise adversely affects thescope of indemnification or rights of any such persons hereunder shall, as to such persons, apply only to claims or causes of action based on actions or events occurring after such amendment and 

 

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delivery of notice of such amendment is given to the person or persons so affected. Until notice of such amendment is given to. the person or persons whoserights hereunder are affected, such amendment shall have no effect on such rights of such persons hereunder. Any person entitled to indemnification under the provisions of this Article VI shall as to any act or omission occurring prior to the dateof receipt of such notice, be entitled to indemnification to the same extent as had such provisions continued as Bylaws of the corporation without such amendment.” 

ARTICLE VII 

RECORDS AND REPORTS 

Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER. The corporation shall keep at its principal executive office, or at the office of itstransfer 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 eachshareholder. 

A shareholder or shareholders of the corporation holding at least five percent (5 %) in the aggregate of the outstandingvoting shares of the corporation may (i) inspect and copy the records of shareholders’ names and addresses and shareholdings during usual business hours upon five (5) business days prior written demand upon the corporation, and/or(ii) obtain from the transfer agent of the corporation, upon written demand and upon the tender of such transfer agent’s usual charges for such list, a list of the shareholders’ names and addresses, who are entitled to vote for theelection of directors, and their shareholdings, as of the most recent record date for which such list has been compiled or as of a date specified by the shareholder subsequent to the date of demand. Such list shall be made available to suchshareholder or shareholders by the transfer agent on or before the later of five (5) business days after the demand is received or the date specified therein as the date as of which the list is to be compiled. The record of shareholders shallalso be open to inspection upon 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 such holder’s interests as a shareholder or as theholder of a voting trust certificate. Any inspection and copying under this Section I may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making such demand. 

Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep at its principal executive office, or if its principal executive officeis not in the State of California at its principal business office in this state, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours. If theprincipal executive office of the corporation is outside this state and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to such shareholder a copy of thebylaws as amended to date. 

Section 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE RECORDS. The accounting books and records andminutes of proceedings of the shareholders and the Board of Directors and any committee or committees of the Board of Directors shall be 

 

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kept at such place or places designated by the Board of Directors, or, in the absence of such designation, at the principal executive office of thecorporation. 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. Such minutes and accounting books and records shallbe 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 such holder’s interests as a shareholder or as theholder of a voting trust certificate. Such inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts. The foregoing rights of inspection shall extend to the records of each subsidiarycorporation of the corporation. 

Section 4. INSPECTION BY DIRECTORS. Every director shall have the absolute right at any reasonabletime 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 agent or attorney and the right ofinspection includes the right to copy And make extracts. 

Section 5. ANNUAL REPORT TO SHAREHOLDERS. The Board of Directors shall causean annual report to be sent to the shareholders not later than one hundred twenty days (120) after the close of the fiscal year adopted by the corporation. The annual report shall contain a balance sheet as of the end of such fiscal year and anincome statement and statement of changes in financial position for such fiscal year, accompanied by any report thereon of independent accountants or, if there is no such report, the certificate of an authorized officer of the corporation that suchstatements were prepared without audit from the books and records of the corporation. Such report shall be sent at least fifteen (15) days prior to the annual meeting of shareholders to be held during the next fiscal year and in the mannerspecified in Section 5 of Article 11 of these bylaws for giving notice to shareholders of the corporation. 

Section 6. FINANCIALSTATEMENTS. 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 beenprepared 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 anysuch statement or a copy shall be mailed to any such shareholder. 

If the corporation has not sent to the shareholders an annual report forthe last fiscal year, a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year shall, upon the written request of any shareholder made more than one hundred twenty(120) days after the close of such fiscal year, be delivered or mailed to such shareholder within thirty (30) days after such request. 

If a shareholder or shareholders holding at least five percent (5 %) of the outstanding shares of any class of stock of the corporation make a written request to the corporation for an income statement of the corporation for thethree-month, six-month or nine-month period of the current fiscal year ended more than thirty (30) days prior to the date of the request, and a balance sheet of the corporation as of the end of such period, the Chief Financial 

 

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Officer shall cause such statement to be prepared, if not already prepared, and shall deliver personally or mail such statement or statements to the personmaking the request within thirty (30) days after the receipt of such request. 

The corporation also shall, upon the written request ofany 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 such period. 

The quarterly income statements and balance sheets referred to in this section shall be accompanied by the report thereon, if any, of any independentaccountants engaged by the corporation or the certificate of an authorized officer of the corporation that such financial statements were prepared without audit from the books and records of the corporation. 

ARTICLE VIII 

GENERAL CORPORATE MATTERS

Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING. For purposes of determining the shareholders entitled to receivepayment 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 mayfix, in advance, a record date, which shall not be more than sixty (60) days prior to any such action, and in such case only shareholders of record on the date so fixed are entitled to receive the dividend, distribution or allotment of rightsor to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date fixed as aforesaid. except as otherwise provided in the California General Corporation Law. 

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 ofbusiness on the day on which the board adopts the resolution relating thereto, or the sixtieth (60th) day prior to the date of such action, whichever is later. 

Section 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, shallbe 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. 

Section 3. CORPORATE CONTRACTS AND INSTRUMENTS; HOW EXECUTED. The Board of Directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into anycontract 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 anofficer, 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 to any amount. 

 

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Section 4. CERTIFICATES FOR SHARES. Shares of capital stock in the corporation may be represented byuncertificated shares, but every holder of capital stock in the corporation shall be entitled to have a certificate or certificates for such shares of the capital stock of the corporation, when any such shares are fully paid, and the Board ofDirectors may authorize the issuance of certificates or shares as partly paid provided that such certificates shall state the amount of the consideration to be paid therefor and the amount paid thereon. All certificates shall be signed in the nameof the corporation by the Chairman of the Board or Vice Chairman of the Board or the President or Vice President and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or any Assistant Secretary, certifying the number ofshares 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 upon acertificate shall have ceased to be 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 ofissue. 

Section 5. LOST CERTIFICATES. Except as hereinafter in this Section 5 provided, no new certificates for shares shall beissued in lieu of an old 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 a new certificate or uncertificated share in lieu thereof, upon such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate securitysufficient 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 such certificate or the issuance of such new certificate oruncertificated share. 

Section 6. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of the Board, the President, or anyVice President, or any other person authorized by resolution of the Board of Directors by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations,foreign or domestic, standing in the name of the corporation. The authority herein granted to said officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may beexercised by any such officer in person or by any person authorized to do so by proxy duly executed by said officer. 

ARTICLE IX 

AMENDMENTS 

Section 1. AMENDMENT BYSHAREHOLDERS. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of holders of two thirds of the outstanding shares entitled to vote. 

Section 2. AMENDMENT BY DIRECTORS. Subject to the rights of the shareholders as provided in Section 1 of this Article IX, to adopt, amend orrepeal bylaws, bylaws may be adopted, amended or repealed by the Board of Directors; provided, however, that 

 

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the Board of Directors may adopt a bylaw or amendment thereof changing the authorized number of directors only for the purpose of fixing the exact number ofdirectors within the limits specified in the Articles of Incorporation or Section 2 of Article III of these bylaws. 

ARTICLE X

GENERAL 

Section 1.GOVERNING LAW. This corporation is organized under the provisions of the California General Corporation Law (Corporations Code Sections 100-2319) as in effect on the date of filing of its original articles of incorporation, namely January 20,1961. Upon such filing the California Secretary of State assigned the following corporation number to this corporation: 408367. The corporate affairs of this corporation shall be governed by and conducted in accordance with the provisions of theCalifornia General Corporation Law, as the same presently exist and are from time to time hereafter amended or superseded, except in those instances where the articles of incorporation or bylaws of this corporation, now or through amendmenthereafter, may adopt alternative rules which are permissible under the California General Corporation Law. Any provision (or portion thereof) in these bylaws which is not permissible under the California General Corporation Law or is inconsistentwith the articles of incorporation of this corporation (as they may from time to time be amended and supplemented) is void, but the balance of these bylaws shall nevertheless be valid and effective. 

Section 2. CONSTRUCTION AND DEFINITIONS. Unless the context requires otherwise, the general provisions, rules of construction, and definitions inthe California General Corporation Law shall govern the construction of these bylaws. Without limiting the generality of the foregoing, the singular number includes the plural, the plural number includes the singular, and the term “person”includes both a corporation and a natural person. 

 

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