UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): | May 31, 2007 |
Smart Online, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)
Delaware | 001-32634 | 95-4439334 |
_____________________
(State or other jurisdiction |
_____________
(Commission |
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(I.R.S. Employer |
of incorporation) | File Number) | Identification No.) |
2530 Meridian Parkway, 2nd Floor, Durham, North Carolina | 27713 | |
_________________________________
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: | 919-765-5000 |
Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective May 31, 2007, the Board of Directors (the "Board") of Smart Online, Inc. (the "Company") increased the authorized size of the Board from six to nine members, and set the current number of directors at seven. The Board also appointed David E. Colburn to the Board and the Audit Committee as of that date.
In connection with his service on the Board, Mr. Colburn will be compensated pursuant to the Company’s Revised Board Compensation Policy, which was attached as Exhibit 10.45 to the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 3, 2007. Pursuant to the Revised Board Compensation Policy, the Board granted 10,000 shares of restricted common stock of the Company to Mr. Colburn on May 31, 2007, with a fair market value equal to the closing price per share of the Company's common stock on the Over-the-Counter Bulletin Board on that date. A copy of the form of Restricted Stock Agreement (Non-Employee Director) setting forth the terms and conditions of Mr. Colburn's grant of restricted stock is attached to this report as Exhibit 10.1 and is incorporated into this report by reference. In addition, Mr. Colburn will receive a monthly retainer of $1,500 for serving as a member of the Board, and an additional $250 per month for serving as a member of the Audit Committee.
Mr. Colburn served as President, Global Manufacturing Industry Practice of Electronic Data Systems ("EDS"), a provider of business and technology solutions, from 2004 to 2006. He has been responsible for developing EDS's global manufacturing industry business and sales strategy for its automotive, industrial manufacturing, high tech and aerospace & defense Segments. Mr. Colburn has previously served as EDS's Area Director, Manufacturing - Automotive (2003 - 2004); Vice President of the Global Industry Group (2002 - 2003); and Vice President of Global Industrial Manufacturing within the Global Industry Group (2001 - 2002). In addition, Mr. Colburn has had a career where he has had responsibilities as President of four different corporations in the Manufacturing and Industrial segments. Mr. Colburn has served as chairman and on the boards of directors of several automotive industry associations. Mr. Colburn received a B.A. in Liberal Arts from Robert Wesleyan College, and previously served on that institution's Board of Trustees. He has enrolled in continuing education programs at, among others, the University of Michigan and the University of Pennsylvania.
A press release announcing the appointment of Mr. Colburn to the Company's Board of Directors is attached to this report as Exhibit 99.1.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Effective May 31, 2007, the Company amended its Second Amended and Restated Bylaws (the "Bylaws"). The amendment provides for an increase in the authorized size of the Board from six under the Bylaws to nine under the Third Amended and Restated Bylaws.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
3.1 Third Amended and Restated Bylaws
10.1 Form of Restricted Stock Agreement (Non-Employee Director) under Smart Online, Inc.'s 2004 Equity Compensation Plan
99.1 Press Release dated May 31, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Smart Online, Inc. | ||||
May 31, 2007 | By: |
/s/ Nicholas A. Sinigaglia
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Name: Nicholas A. Sinigaglia | ||||
Title: Chief Financial Officer |
Exhibit Index
Exhibit No.
Description
Third Amended and Restated Bylaws
Form of Restricted Stock Agreement (Non-Employee Director) under Smart Online, Inc.'s 2004 Equity Compensation Plan
Press Release dated May 31, 2007
Exhibit 3.1
THIRD AMENDED AND RESTATED
BYLAWS
OF
SMART ONLINE, INC.
ARTICLE I
OFFICES
SECTION 1
.
REGISTERED OFFICE
. The registered office of the Corporation shall
be located at 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, or at such other
place as the Board of Directors shall determine from time to time.
SECTION 2
.
PRINCIPAL OFFICE AND OTHER OFFICES
. The principal office of the
Corporation shall be located at such place as the Board of Directors may specify from time to time.
The Corporation may have such other offices at such other places, either within or without the
State of Delaware, as the Board of Directors may from time to time determine, or as the affairs of
the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1
.
PLACE OF MEETING
. Meetings of the stockholders of the Corporation
shall be held at the such place, either within or without the State of Delaware, as may be
designated from time to time by the Board of Directors, or, if not so designated, then at the
principal office of the Corporation required to be maintained pursuant to Article I, Section 2
hereof. The Board of Directors may, in its sole discretion and subject to such guidelines and
procedures as the Board of Directors may adopt for such meeting, permit stockholders and proxy
holders not present at such meeting to: (i) participate in such meeting of stockholders; and (ii)
be deemed present in person and vote at such meeting of stockholders, provided that: (A) the
Corporation shall implement reasonable measures to verify that each person deemed present and
permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder;
(B) the Corporation shall implement reasonable measures to provide stockholders and proxy holders a
reasonable opportunity to participate in the meeting and to vote on matters submitted to the
stockholders; and (C) if any stockholder or proxy holder votes or takes other action at the meeting
by means of remote communication, the Corporation shall maintain a record of such vote or other
action.
SECTION 2
.
ANNUAL MEETINGS
. The annual meeting of the stockholders shall be
held during the month of June of each year at such time and place as the Board of Directors shall
determine, at which time the stockholders shall elect a Board of Directors and transact such other
business as may be properly brought before the meeting. Notwithstanding the foregoing, the Board of
Directors may cause the annual meeting of stockholders to be held on such other date in any year as
they shall determine to be in the best interest of the Corporation, and any business transacted at
said meeting shall have the same validity as if transacted on the date designated herein.
SECTION 3
.
SPECIAL MEETINGS
. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or the Amended and Restated Certificate
of Incorporation, may be called by the Chairman of the Board, Chief Executive Officer or President.
The President or Secretary shall call a special meeting when: (i) requested in writing by any two
or more of the directors, or one director if only one director is then in office; or (ii) requested
in writing bystockholders owning a majority of the shares entitled to vote. Such written request
shall state the purpose or purposes of the proposed meeting.
SECTION 4
.
NOTICE
. Except as otherwise required by statute or the Certificate
of Incorporation, written notice of each meeting of the stockholders, whether annual or special,
shall be served, either personally, by mail or private carrier, or by facsimile, electronic mail or
other electronic means, upon each stockholder of record entitled to vote at such meeting, not less
than ten (10) nor more than sixty (60) days before the meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the stockholder at his
address as it appears on the records of the Corporation, with postage thereon prepaid. Notice shall
be sent by facsimile, electronic mail or other electronic means only to stockholders who have
agreed to receive notice by electronic means and who have not revoked such agreement. Notice of any
meeting of stockholders shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. The notice shall also
state the means of remote communication, if any, by which stockholders and proxy holders may be
deemed present in person and vote at such meeting. Notice of any meeting of stockholders shall not
be required to be given to any stockholder who, in person or by his authorized attorney, either
before or after such meeting, shall waive such notice in writing. Attendance of a stockholder at a
meeting, either in person or by proxy, shall itself constitute waiver of notice and waiver of any
and all objections to the place and time of the meeting and manner in which it has been called or
convened, except when a stockholder attends a meeting solely for the purpose of stating, at the
beginning of the meeting, any such objections to the transaction of business. Notice of the time
and place of any adjourned meeting need not be given otherwise than by the announcement at the
meeting at which adjournment is taken, unless the adjournment is for more than thirty (30) days or
after the adjournment a new record date is set.
SECTION 5
.
PROXIES
. A stockholder may attend, represent, and vote his shares
at any meeting in person, or be represented and have his shares voted for by a proxy which such
stockholder has (i) duly executed in writing or (ii) transmitted by electronic means and which has
been authenticated as required by law. No proxy shall be valid after three (3) years from the date
of its execution unless a longer period is expressly provided in the proxy. Each proxy shall be
revocable unless otherwise expressly provided in the proxy or unless otherwise made irrevocable by
law.
SECTION 6
.
QUORUM
. The holders of a majority of the stock issued, outstanding
and entitled to vote, present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders and shall be required for the transaction of business, except as
otherwise provided by law, by the Certificate of Incorporation, or by these Bylaws. When a quorum
is present at the original meeting, any business which might have been transacted at the original
meeting may be transacted at an adjourned meeting, even when a quorum is not present at the
adjourned meeting. The stockholders at a meeting at which a quorum is initially present may
continue to do business until adjournment, notwithstanding the withdrawal of sufficient
stockholders to leave less than a quorum. If, however, such majority shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to vote at such meeting,
present in person or by proxy, shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting unless the adjournment is for more than
thirty (30) days or after the adjournment a new record date is set, until the required amount of
voting stock shall be present. At such adjourned meeting at which a quorum shall be present in
person or by proxy, any business may be transacted that might have been transacted at the meeting
originally called.
SECTION 7
.
VOTING OF SHARES
. Each outstanding share of voting capital stock of
the Corporation shall be entitled to one vote on each matter submitted to a vote at a meeting of
the stockholders, except as otherwise provided in the Amended and Restated Certificate of
Incorporation. The vote by the holders of a majority of the shares voted on any matter at a meeting
of stockholders at which a quorum is present shall be the act of the stockholders on that matter,
unless the vote of a greater number is required by law, by the Amended and Restated Certificate of
Incorporation, or by these Bylaws; provided, however, that directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy at the meeting and
entitled to vote on the election of directors. Voting on all matters except the election of
directors shall be by voice vote or show of hands unless the holders of ten percent (10%) of the
shares represented at the meeting shall, prior to voting on any matter, demand a written ballot on
that particular matter. All elections of directors shall be by written ballot, unless otherwise
provided in the Amended and Restated Certificate of Incorporation. Shares of its own stock owned by
the Corporation, directly or indirectly, through a subsidiary or otherwise, shall not be voted and
shall not be counted in determining the number of shares entitled to vote; except that shares held
in a fiduciary capacity may be voted and shall be counted except to the extent provided by law.
SECTION 8
.
ACTION WITHOUT MEETING
.
(a) Any action required or permitted to be taken at any annual or special meeting of the
stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent
or consents in writing, setting forth the action so taken, are signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were present and voted.
(b) Every written consent shall bear the date of signature of each stockholder who signs the
consent, and no consent shall be effective to take the corporate action referred to in such consent
unless, within sixty (60) days of the earliest dated consent delivered to the Corporation in the
manner required in these Bylaws, written consents signed by a sufficient number of stockholders to
take action are delivered to the Corporation by delivery to its registered office in the State of
Delaware, its principal place of business or an officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the
Corporations registered office shall be by hand or by certified or registered mail, return receipt
requested.
(c) A telegram, electronic mail or other electronic transmission consenting to action to be
taken and transmitted by a stockholder or proxy holder, or by a person or persons authorized to act
for a stockholder or proxy holder, shall be deemed to be written, signed and dated, as required by
Section 228 of the General Corporation Law of Delaware and by these Bylaws, provided that any such
telegram, electronic mail or other electronic transmission sets forth or is delivered with
information from which the Corporation can determine: (i) that the telegram, electronic mail or
other electronic transmission was transmitted by the stockholder, proxy holder or person authorized
to act for the stockholder or proxy holder; and (ii) the date on which such stockholder, proxy
holder or authorized person(s) transmitted such telegram, electronic mail or other electronic
transmission. The date on which such telegram, electronic mail or other electronic transmission is
transmitted shall be deemed to be the date on which such consent was signed. Unless otherwise
provided by resolution of the Board of Directors, no consent given by telegram, electronic mail or
other electronic transmission shall be deemed to have been delivered until such consent is
reproduced in paper form and until such paper form shall be delivered to the Corporation by
delivery to its registered office, its principal place of business or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporations registered office shall be made by and or by certified
or registered mail, return receipt requested.
(d) Prompt notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not consented in writing.
If the action which is consented to is such as would have required the filing of a certificate
under any section of the General Corporation Law of Delaware if such action had been voted on by
the stockholders at a meeting thereof, then the certificate filed under such section shall state,
in lieu of any statement required by such section concerning any vote of stockholders, that written
notice and written consent have been given as provided in Section 228 of the General Corporation
Law of Delaware.
SECTION 9
.
LIST OF STOCKHOLDERS
.
The Secretary shall prepare and make, at
least ten (10) days before every meeting of stockholders, a complete alphabetical list of the
stockholders entitled to vote at the meeting, showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the notice of the meeting,
or, if not specified, at the place where the meeting is to be held. The list shall be produced and
kept at the time and place of meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
SECTION 10
.
INSPECTORS OF ELECTION
.
(a)
APPOINTMENT OF INSPECTORS OF ELECTION
. In advance of any meeting of stockholders,
the Board of Directors may appoint any persons, other than nominees for office, as inspectors of
election to act at such meeting or any adjournment thereof. If inspectors of election are not so
appointed, the chairman of any such meeting may appoint inspectors of election at the meeting. The
number of inspectors shall be either one (1) or three (3). In case any person appointed as
inspector fails to appear or fails or refuses to act, the vacancy may be filled by appointment by
the Board of Directors in advance of the meeting or at the meeting by the person acting as
chairman.
(b)
DUTIES OF INSPECTORS
. The inspectors of elections shall determine the number of
shares outstanding and the voting power of each, the shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies, receive votes, ballots or
consents, hear and determine all challenges and questions in any way arising in connection with the
right to vote, count and tabulate all votes or consents, determine the results and do such acts as
may be proper to conduct the election or vote with fairness to all stockholders. The inspectors of
election shall perform their duties impartially, in good faith, to the best of their ability and as
expeditiously as possible.
(c)
VOTE OF INSPECTORS
. If there are three (3) inspectors of election the decision,
act or certificate of a majority shall be effective in all respects as the decision, act or
certificate of all.
(d)
REPORT OF INSPECTORS
. On request of the chairman of the meeting, the inspectors
shall make a report in writing of any challenge or question or matter determined by them and shall
execute a certificate of any fact found by them. Any report or certificate made by them shall be
prima facie evidence of the facts stated therein.
SECTION 13
.
NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS
.
(a) Annual Meetings of Stockholders.
(i) Nominations of persons for election to the Board of Directors and the proposal of business
to be considered by the stockholders may be made at an annual meeting of stockholders: (a) pursuant
to the notice of meeting pursuant to Article II, Section 4 of these Bylaws; (b) by or at the
direction of the Board of Directors; or (c) by any stockholder of the Corporation who was a
stockholder of record at the time of giving of notice provided for in this Bylaw (Article II,
Section 13), who is entitled to vote at the meeting and who complies with the notice procedures set
forth in this Bylaw.
(ii) For nominations or other business to be properly brought before an annual meeting by a
stockholder pursuant to clause (c) of paragraph (a)(i) of this Bylaw, the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation and such other business
must otherwise be a proper matter for stockholder action. To be timely, a stockholders notice
shall be delivered to the secretary at the principal executive offices of the Corporation not later
than the close of business on the 60th calendar day nor earlier than the close of business on the
90th calendar day prior to the first anniversary of the preceding years annual meeting;
provided,
however,
that in the event that the date of the annual meeting is more than thirty (30) calendar
days before or more than sixty (60) calendar days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the close of business on the 90th
calendar day prior to such annual meeting and not later than the close of business on the later of
the 60th calendar day prior to such annual meeting or the 10th calendar day following the calendar
day on which public announcement of the date of such meeting is first made by the Corporation. In
no event shall the public announcement of an adjournment of an annual meeting commence a new time
period for the giving of a stockholders notice as described above. Such stockholders notice shall
set forth: (a) as to each person whom the stockholder proposes to nominate for election or
reelection as a director all information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors in an election contest, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the Exchange Act) and Rule 14a-11 thereunder (including such persons written consent to
being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to
any other business that the stockholder proposes to bring before the meeting, a brief description
of the business desired to be brought before the meeting, the reasons for conducting such business
at the meeting and any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, the
name and address of such stockholder, as they appear on the Corporations books, and of such
beneficial owner and the class and number of shares of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
(b) Special Meetings of Stockholders.
(i) Only such business shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the notice of meeting under Article II, Section 4 of
these Bylaws. If directors are to be elected at a special meeting of stockholders pursuant to the
notice of meeting, nominations of persons for election to the Board of Directors at such meeting
may be made (a) by or at the direction of the Board of Directors, or (b) by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice provided for in this
Bylaw, who shall be entitled to vote at the meeting and who complies with the notice procedures set
forth in this Bylaw.
(ii) In the event a special meeting of stockholders is called for the purpose of electing one
or more directors to the Board of Directors, any stockholder may, pursuant to clause (b)(i) above,
nominate a person or persons (as the case may be) for election to such position(s) as specified in
the notice of meeting, if the stockholder shall have delivered notice containing the information
specified in paragraph (a)(ii) of this Bylaw to the secretary at the principal executive offices of
the Corporation not earlier than the close of business on the 90th calendar day prior to such
special meeting and not later than the close of business on the later of the 60th calendar day
prior to such special meeting or the 10th calendar day following the day on which public
announcement is first made of the date of the special meeting and of the nominees proposed by the
Board of Directors to be elected at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for the giving of a stockholders
notice as described above.
(c) General.
(i) Only such persons who are nominated in accordance with the procedures set forth in this
Bylaw shall be eligible to serve as directors and only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting in accordance with the
procedures set forth in this Bylaw. Except as otherwise provided by law, the Amended and Restated
Certificate of Incorporation or these Bylaws, the chairman of the meeting shall have the power and
duty to determine whether a nomination or any business proposed to be brought before the meeting
was made or proposed, as the case may be, in accordance with the procedures set forth in this Bylaw
and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that
such defective proposal or nomination shall be disregarded.
(ii) For purposes of this Bylaw, public announcement shall mean disclosure in a press
release reported in a national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply
with all applicable requirements of the Securities Exchange Act of 1934, as amended (Exchange
Act), and the rules and regulations thereunder with respect to the matters set forth in this
Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of stockholders to request
inclusion of proposals in the Corporations proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
SECTION 14
.
STOCKHOLDER COMMUNICATIONS WITH DIRECTORS
.
The Board of Directors
may from time to time establish or amend the procedures for stockholder communications to the Board
of Directors. Such procedures shall be contained in the Corporations proxy statement for its
annual shareholders meeting or such other communication as the Board may deem appropriate in its
sole discretion. Any stockholder who desires to send a communication to members of the Board shall
be required to submit such communication in accordance with such procedures. All communications
properly submitted under the procedures established by the Board of Directors, except those deemed
inappropriate as provided below, will be delivered to all members of the Board periodically,
generally in advance of each regularly scheduled Board meeting. The Secretary shall not forward
communications which (a) are not reasonably related to the business of the Company, (b) concern
individual grievances or other interests that are personal to the stockholder submitting the
communication and that cannot reasonably be construed to present a matter of concern to
stockholders generally, or (c) under community standards, contain offensive, scurrilous or abusive
content or that advocate engaging in illegal activities. If the Secretary, in his or her judgment,
deems a communication inappropriate under the foregoing criteria, it will be returned to the person
who submitted it together with a brief explanation of the reason why it has been deemed
inappropriate for delivery.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1
.
GENERAL POWERS
.
The business and affairs of the Corporation shall
be managed by the Board of Directors, except as otherwise provided by law, by the Certificate of
Incorporation of the Corporation or by these Bylaws.
SECTION 2
.
NUMBER AND QUALIFICATIONS
.
The authorized number of directors shall
be determined from time to time by resolution of the Board of Directors, provided that the number
of directors shall not exceed nine (9), and provided further that any decrease in the number of
directors shall not shorten an incumbent directors term of office. Each director shall hold office
until his death, resignation, retirement, removal, disqualification, or his successor is elected
and qualifies. Directors need not be residents of the State of Delaware or stockholders of the
Corporation.
SECTION 3
.
ELECTION AND CLASSIFICATION OF DIRECTORS; TERM
.
The directors shall
be elected for annual terms at the annual meeting of stockholders (or by written consent in lieu of
such meeting) and such directors, as provided in Section 7 of Article II, shall be elected by a
plurality of the votes of the shares present or represented by proxy at the meeting (or executing
the written consent in lieu of such meeting) and entitled to vote in the election of directors.
SECTION 4
.
REMOVAL
.
At a special meeting of the stockholders called for the
purpose and in the manner provided in these Bylaws, subject to any limitations imposed by law or
the Amended and Restated Certificate of Incorporation, the Board of Directors, or any individual
director, may be removed from office, but only for cause, and a new director or directors elected
by a vote of stockholders holding a majority of the outstanding shares entitled to vote at an
election of directors.
SECTION 5
.
RESIGNATION
. Any director of the Corporation may resign at any time
by giving written notice to the President or the Secretary of the Corporation. The resignation of
any director shall take effect upon receipt of such notice or at such later time as shall be
specified in such notice. The acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6
.
VACANCIES
.
Any vacancy in the Corporations Board of Directors,
including, without limitation, any vacancy created by an increase in the authorized number of
directors or resulting from the stockholders failure to elect the full authorized number of
directors, may be filled by the vote of a majority of the remaining directors then in office,
though less than a quorum. If the vacant office was held by a director elected by a voting group,
only the remaining director or directors elected by that voting group or the holders of shares of
that voting group are entitled to fill the vacancy. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. The stockholders may elect a director
at any time to fill a vacancy not filled by the directors.
SECTION 7
.
COMPENSATION
.
The Board of Directors may cause the Corporation to
compensate directors for their services as directors and may provide for payment by the Corporation
of all expenses incurred by directors in attending regular and special meetings of the Board.
ARTICLE IV
MEETINGS OF DIRECTORS
SECTION 1
.
ANNUAL AND REGULAR MEETINGS
.
A regular meeting of the Board of
Directors shall be held immediately after, and at the same place as, the annual meeting of
stockholders. In addition, the Board of Directors may provide, by resolution, for the holding of
additional regular meetings.
SECTION 2
.
SPECIAL MEETINGS
.
Special meetings of the Board of Directors may be
called by or at the request of the Chairman of the Board, the President or any two or more
directors, or one director if only one director is then in office. Such meetings may be held at the
time and place designated in the notice of the meeting.
SECTION 3
.
NOTICE OF MEETINGS
.
(a) Regular meetings of the Board of Directors may be held without notice. Written notice of
the time and place of all special meetings of the Board of Directors shall be given no later than
5:00 p.m. in the time zone of the principal office of the Corporation on a date after which at
least two business days intervene before the date of the meeting; such notice need not specify the
purpose for which the meeting is called. Notice of any meeting may be waived in writing at any time
before or after the meeting and will be waived by any director by attendance at such meeting,
except when the director attends the meeting for the express purposes of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting is not lawfully
called of convened. Notice of an adjourned meeting need not be given if the time and place are
fixed at the meeting adjourning and if the period of adjournment does not exceed ten (10) days in
any one adjournment.
(b) The transaction of all business at any meeting of the Board of Directors, however called
or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular
call and notice, if a quorum be present and if, either before or after the meeting, each of the
directors not present shall sign a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need be specified in any written
waiver of notice or consent unless so required by the Certificate of Incorporation or these Bylaws.
All such waivers, consents or approvals shall be filed with the corporate records or made a part of
the minutes of the meetings.
SECTION 4
.
QUORUM
.
At all meetings of the Board of Directors, the presence of
a majority of the directors then in office shall constitute a quorum for the transaction of
business. In the absence of a quorum, a majority of the directors present at any meeting may
adjourn from time to time until a quorum is constituted. Notice of the time and place of any
adjourned meeting need only be given by announcement at the meeting at which adjournment is taken.
SECTION 5
.
MANNER OF ACTING
.
Except as otherwise provided by law, these Bylaws
or the Amended and Restated Certificate of Incorporation, the act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board of Directors.
SECTION 6
.
ACTION WITHOUT MEETING
.
Unless otherwise restricted by the Amended
and Restated Certificate of Incorporation or these Bylaws, any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting, if all members of
the Board of Directors consent in writing, and such writing or writings are filed with the minutes
of proceedings of the Board of Directors.
SECTION 7
.
TELEPHONIC MEETINGS
.
Members of the Board of Directors may
participate in a meeting of such Board by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear each other and
participation in a meeting pursuant to this Section shall constitute presence in person at such
meeting.
ARTICLE V
COMMITTEES OF THE BOARD
SECTION 1
.
CREATION
.
The Board of Directors may designate one (1) or more
directors to constitute a Executive Committee or other committees, each of which, to the extent
authorized by law and provided in the resolution shall have and may exercise all of the authority
delegated to the Executive Committee or other committee by the Board of Directors in the management
of the Corporation, except as set forth in Section 7, below.
SECTION 2
.
VACANCY
.
Any permanent vacancy occurring on a committee shall be
filled by the Board of Directors.
SECTION 3
.
REMOVAL
.
Any member of a committee may be removed at any time, with
or without cause, by the Board of Directors.
SECTION 4
.
PROCEDURES AND MINUTES
.
Any such committee shall elect a presiding
officer from among its members and may fix its own rules of procedure, which may not be
inconsistent with these Bylaws. Each committee shall keep regular minutes of its proceedings and
report the same to the Board when required.
SECTION 5
.
MEETINGS; QUORUM
.
Regular meetings of any such committee may be
held without notice at such time and place as such committee may fix by resolution. Special
meetings of any such committee may be called by any member thereof upon not less than one (1) days
notice stating the place and time of such meeting, which notice may be written or oral, and if
mailed, shall be deemed delivered when deposited in the United States mail addressed to any member
of the committee at his business address. Any member of the committee may waive notice of meeting
and no notice of meeting need be given to any member thereof who attends in person. The notice of a
meeting of a committee need not state the business proposed to be transacted at the meeting. A
majority of the members of any such committee shall constitute a quorum for the transaction of
business at any meeting thereof, and actions of such committee must be authorized by the
affirmative vote of a majority of the members pursuant to a meeting at which a quorum is present.
In the absence or disqualification of a member of the committee, the member or members present and
not disqualified from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member.
SECTION 6
.
RESPONSIBILITY OF DIRECTORS
.
The designation of an Executive
Committee or other committee and the delegation thereto of authority shall not alone operate to
relieve the Board of Directors or any member thereof, of any responsibility or liability imposed
upon it or him by law.
SECTION 7
.
RESTRICTIONS ON COMMITTEES
.
Neither the Executive Committee nor any
other committee shall have the authority to: (a) approve or adopt or recommend to the stockholders,
any action or matter expressly required by the Delaware General Corporation Law to be submitted to
the stockholders for approval; (b) adopt, amend or repeal Bylaws; (c) amend the Amended and
Restated Certificate of Incorporation; (d) authorize distributions; (e) fill vacancies on the Board
of Directors or on any of its committees, except as provided in Section 5, above; (f) approve a
plan of merger not requiring stockholder approval; (g) authorize or approve reacquisition of
shares, except according to a formula or method prescribed by the Board of Directors; (h) authorize
or approve the issuance or sale or contract for sale of shares, or determine the designation and
relative rights, preferences, and limitations of a class or series of shares, except within limits
specifically prescribed by the Board of Directors; (i) fix compensation of the directors for
serving on the Board or on any committee; or (j) amend or repeal any resolution of the Board of
Directors which by its terms shall not be so amendable or repealable.
ARTICLE VI
OFFICERS
SECTION 1
.
OFFICERS
.
The Board of Directors shall elect a President and a
Secretary or Assistant Secretary, and may elect or appoint a chief executive officer, one or more
vice presidents, one or more assistant secretaries, a treasurer or chief financial officer, and
other or additional officers as in its opinion are desirable for conduct of the business of the
Corporation. The Board of Directors may elect from its own membership a Chairman of the Board. The
Board of Directors may by resolution empower any officer or officers of the Corporation to appoint
from time to time such vice presidents and other or additional officers as in the opinion of the
officer(s) so empowered by the Board are desirable for the conduct of the business of the
Corporation. Any two or more offices may be held by the same person. In no event, however, may an
officer act in more than one capacity where action of two or more officers is required.
SECTION 2
.
ELECTION AND TERM
.
Each officer of the Corporation shall hold
office for the term for which he is elected or appointed, and until his successor has been duly
elected or appointed and has qualified, or until his death, resignation or removal pursuant to
these Bylaws. Elections by the Board of Directors may be held at any regular or special meeting of
the Board.
SECTION 3
.
REMOVAL
.
Any officer elected by the Board may be removed, either
with or without cause, by a vote of the Board of Directors. Any officer appointed by another
officer or officers may be removed, either with or without cause, by either a vote of the Board of
Directors or by the officer or officers given the power to appoint that officer. The removal of any
person from office shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4
.
RESIGNATIONS
.
Any officer may resign at any time by giving written
notice to the Board of Directors or to the President or Secretary of the Corporation. Any such
resignation shall take effect upon receipt of the notice.
SECTION 5
.
VACANCIES
.
A vacancy in any office because of death, resignation,
removal, disqualification, or any other cause, shall be filled for the unexpired portion of the
term in the manner prescribed by these Bylaws for regular appointment or elections to such offices.
SECTION 6
.
COMPENSATION
.
The compensation of all officers of the Corporation
shall be fixed by the Board of Directors, except that the Board may delegate to any officer who has
been given the power to appoint subordinate officers, the authority to fix the salaries of such
appointed officers. No officer shall be prevented from receiving a salary as an officer by reason
of the fact that the officer is also a member of the Board of Directors.
SECTION 7
.
CHAIRMAN OF THE BOARD
.
The Chairman of the Board of Directors, if
elected, shall preside at all meetings of the Board of Directors and shall perform such other
duties as may be prescribed from time to time by the Board of Directors or by these Bylaws.
SECTION 8
.
CHIEF EXECUTIVE OFFICER
.
The Chief Executive Officer, if elected,
shall be the principal executive officer of the Corporation and shall preside at meetings of the
Board of Directors in the absence of the Chairman of the Board. The Chief Executive Officer shall
be subject to the control and direction of the Board of Directors, and shall supervise and control
the management of the Corporation.
SECTION 9
.
PRESIDENT
.
If no Chief Executive Officer is elected, the President
shall be the principal executive officer of the Corporation, and shall preside at meetings of the
Board of Directors in the absence of the Chairman of the Board and the Chief Executive Officer. The
President shall be subject to the control and direction of the Board of Directors, and in general,
he shall perform all duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board, or the Chief Executive Officer
from time to time.
SECTION 10
.
VICE PRESIDENTS
. In the absence or disability of the President or
in the event of his death, inability or refusal to act, the Vice Presidents, in the order of their
length of service as such, unless otherwise determined by the Board of Directors, shall perform the
duties and exercise the powers of the President. In addition, the Vice President shall perform such
other duties and have such other powers as the Board of Directors shall prescribe. Vice Presidents
shall not be executive officers of the Corporation except as designated by the Board of Directors.
SECTION 11
.
SECRETARY AND ASSISTANT SECRETARY
.
The Secretary shall attend all
meetings of the stockholders and of the Board of Directors, and shall record all acts and
proceedings of such meetings in the minute book of the Corporation. The Secretary shall give notice
in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the
Board of Directors requiring notice. The Secretary shall perform all other duties given him in
these Bylaws and other duties commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall designate from time to time. The
President may direct any Assistant Secretary to assume and perform the duties of the Secretary in
the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties
commonly incident to his office and shall also perform such other duties and have such other powers
as the Board of Directors or the President shall designate from time to time.
SECTION 12
.
CHIEF FINANCIAL OFFICER OR TREASURER AND ASSISTANT TREASURER
.
The
Chief Financial Officer or Treasurer shall keep or cause to be kept the books of account of the
Corporation in a thorough and proper manner, and shall render statements of the financial affairs
of the Corporation in such form and as often as required by the Board of Directors or the
President. The Chief Financial Officer or Treasurer, subject to the order of the Board of
Directors, shall have the custody of all funds and securities of the Corporation. The Corporation
shall mail the annual financial statements, or a written notice of their availability, to each
stockholder within one hundred twenty (120) days of the close of each fiscal year. The Chief
Financial Officer or Treasurer shall perform other duties commonly incident to this office and
shall also perform such other duties and have such other powers as the Board of Directors or the
President shall designate from time to time. The President may direct any Assistant Treasurer to
assume and perform the duties of the Chief Financial Officer or Treasurer in the absence or
disability of the Chief Financial Officer or Treasurer, and each Assistant Treasurer shall perform
other duties commonly incident to this office and shall also perform such other duties and have
such other powers as the Board of Directors or the President shall designate from time to time.
SECTION 13
.
CONTROLLER AND ASSISTANT CONTROLLER
.
The Controller, if one has
been appointed, shall have charge of the accounting affairs of the Corporation and shall have such
other powers and perform such other duties as the Board of Directors shall designate. Each
Assistant Controller shall have such powers and perform such duties as may be assigned by the Board
of Directors and the Assistant Controllers shall exercise the powers of the Controller during that
officers absence or inability to act.
SECTION 14
.
DUTIES OF OFFICERS MAY BE DELEGATED
.
In case of the absence of any
officer of the Corporation or for any other reason that the Board may deem sufficient, the Board
may delegate the powers or duties of such officer to any other officer or to any director for the
time being provided a majority of the entire Board of Directors concurs in such delegation.
SECTION 15
.
BONDS
.
The Board of Directors may, by resolution, require any or
all officers, agents and employees of the Corporation to give bond to the Corporation, with
sufficient securities, conditioned on faithful performance of the duties of their respective
offices or positions, and to comply with such other conditions as may from time to time be required
by the Board of Directors.
ARTICLE VII
CAPITAL STOCK AND TRANSFER OF SAME
SECTION 1
.
CERTIFICATES FOR SHARES
.
Certificates representing shares of the
Corporation shall be issued, in such form as the Board of Directors shall determine, to every
stockholder for the fully paid shares owned by him. These certificates shall be signed by the
President or any Vice President or a person who has been designated as the chief executive officer
of the Corporation and by the Secretary, Assistant Secretary, Treasurer or Assistant Treasurer and
sealed with the seal of the Corporation or a facsimile thereof. The signatures of any such officers
upon a certificate may be facsimiles or may be engraved or printed or omitted if the certificate is
countersigned by a transfer agent, or registered by a registrar, other than the Corporation itself
or an employee of the Corporation. In case any officer who has signed or whose facsimile or other
signature has been placed upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with the same effect as if he were such
officer at the date of its issue. The certificates shall be consecutively numbered or otherwise
identified; and the name and address of the persons to whom they are issued, with the number of
shares and date of issue, shall be entered on the stock transfer books of the Corporation.
SECTION 2
.
TRANSFER OF SHARES
.
Transfer of shares shall be made on the stock
transfer books of the Corporation only upon surrender of the certificates for the shares sought to
be transferred by the record holder thereof or by his duly authorized agent, transferee or legal
representative. All certificates surrendered for transfer shall be cancelled before new
certificates for the transferred shares shall be issued.
SECTION 3
.
TRANSFER AGENT AND REGISTRAR
.
The Board of Directors may appoint
one or more transfer agents and one or more registrars of transfer and may require all stock
certificates to be signed or countersigned by the transfer agent and registered by the registrar of
transfers.
SECTION 4
.
CLOSING TRANSFER BOOKS AND FIXING RECORD DATE
.
(a) For the purpose of determining the stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less
than ten (10) days before the date of such meeting. If no record date is fixed by the Board of
Directors, such record date shall be at the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held. Such determination of stockholders of record shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
(b) For the purpose of determining the stockholders entitled to consent to corporate action in
writing without a meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten (10) days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, such record date, when no prior action by the Board of Directors
is required by this chapter, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is filed with the Secretary of the Corporation. If
no record date has been fixed by the Board of Directors and prior action by the Board of Directors
is required by the Delaware Corporation Law, such record date shall be at the close of business on
the day on which the Board of Directors adopts the resolution taking such prior action.
(c) For the purpose of determining the stockholders entitled to receive payment of any
dividend or other distribution or allotment of any rights, or the stockholders entitled to exercise
any rights in respect of any change, conversion or exchange of stock, or for the purpose of any
other lawful action, the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted, and which record date
shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record
date for determining stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
SECTION 5
.
LOST CERTIFICATES
.
The Board of Directors may authorize the
issuance of a new share certificate in place of a certificate claimed to have been lost or
destroyed, upon receipt of an affidavit of such fact from the person claiming the loss or
destruction. When authorizing such issuance of a new certificate, the Board may require the
claimant to give the Corporation a bond in such sum as it may direct to indemnify the Corporation
against loss from any claim with respect to the certificate claimed to have been lost or destroyed;
or the Board may, by resolution reciting that the circumstances justify such action, authorize the
issuance of the new certificate without requiring such a bond.
SECTION 6
.
HOLDER OF RECORD
.
The Corporation may treat as absolute owner of
the shares the person in whose name the shares stand of record on its books just as if that person
had full competency, capacity, and authority to exercise all rights of ownership irrespective of
any knowledge or notice to the contrary or any description indicating a representative, pledge or
other fiduciary relation or any reference to any other instrument or to the rights of any other
person appearing upon its record or upon the share certificate; except that any person furnishing
to the Corporation proof of his appointment as a fiduciary shall be treated as if he were a holder
of record of the Corporations shares.
SECTION 7
.
TREASURY SHARES
.
Treasury shares of the Corporation shall consist
of such shares as have been issued and thereafter acquired but not cancelled by the Corporation.
Treasury shares shall not carry voting or dividend rights, except rights in share dividends.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 1
.
DISTRIBUTIONS TO STOCKHOLDERS
.
The Board of Directors may from time
to time authorize, and the Corporation may make, distributions to its stockholders (including,
without limitation, dividends and distributions involving acquisition of the Corporations shares)
in the manner and upon the terms and conditions provided by law, and subject to the provisions of
its Certificate of Incorporation.
SECTION 2
.
SEAL
.
The seal of the Corporation shall be in such form as the
Board of Directors may from time to time determine.
SECTION 3
.
DEPOSITORIES AND CHECKS
.
All funds of the Corporation shall be
deposited in the name of the Corporation in such bank, banks, or other financial institutions as
the Board of Directors may from time to time designate and shall be drawn out on checks, drafts or
other orders signed on behalf of the Corporation by such person or persons as the Board of
Directors may from time to time designate.
SECTION 4
.
LOANS
.
No loans shall be contracted on behalf of the Corporation
and no evidence of indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or defined to specific instances.
SECTION 5
.
FISCAL YEAR
.
The fiscal year of the Corporation shall be fixed by
the Board of Directors.
SECTION 6
.
CONTRACTS
.
The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any instrument on
behalf of the Corporation, and such authority may be general or confined to specific instances.
ARTICLE IX
AMENDMENTS
The Bylaws of the Corporation may be altered or amended and new Bylaws may be adopted by the
stockholders or, if authorized by the Certificate of Incorporation, by the Board of Directors at
any regular or special meeting of the Board of Directors; provided, however, that, if such action
is to be taken at a meeting of the stockholders, notice of the general nature of the proposed
change in the Bylaws shall have been given in the notice of a meeting. Action by the stockholders
with respect to Bylaws shall be taken by an affirmative vote of a majority of the shares entitled
to elect directors, and action by the directors with respect to Bylaws shall be taken by an
affirmative vote of a majority of all directors then holding office.
ARTICLE X
INDEMNIFICATION AND REIMBURSEMENT OF DIRECTORS AND OFFICERS
SECTION 1
.
INDEMNIFICATION FOR EXPENSES AND LIABILITIES
.
Any person who at any
time serves or has served (i) as a director, officer, employee or agent of the Corporation, (ii) at
the request of the Corporation as a director, officer, partner, trustee, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or
(iii) at the request of the Corporation as a trustee or administrator under an employee benefit
plan, or is called as a witness at a time when he or she has not been made a named defendant or
respondent to any Proceeding, shall have a right to be indemnified by the Corporation to the
fullest extent from time to time permitted by law against Liability and Expenses in any Proceeding
(including without limitation a Proceeding brought by or on behalf of the Corporation itself)
arising out of his or her status as such or activities in any of the foregoing capacities. The
Board of Directors of the Corporation shall take all such action as may be necessary and
appropriate to authorize the Corporation to pay the indemnification required by this provision,
including without limitation, to the extent needed, making a good faith evaluation of the manner in
which the claimant for indemnity acted and of the reasonable amount of indemnity due him or her.
Any person who at any time serves or has served in any of the aforesaid capacities for or on behalf
of the Corporation shall be deemed to be doing or to have done so in reliance upon, and as
consideration for, the rights provided for herein. Any repeal or modification of these
indemnification provisions shall not affect any rights or obligations existing at the time of such
repeal or modification. The rights provided for herein shall inure to the benefit of the legal
representatives of any such person and shall not be exclusive of any other rights to which such
person may be entitled apart from this provision. The rights granted herein shall not be limited by
the provisions contained in Section 145 of the Delaware Corporation Law or any successor to such
statute. The rights granted herein shall not be exclusive of any other rights which an indemnified
person may have or hereafter acquire under any statute, provision of the Amended and Restated
Certificate of Incorporation, these bylaws, agreement, vote of stockholders or disinterested
directors, or otherwise.
SECTION 2
.
ADVANCE PAYMENT OF EXPENSES
.
The Corporation shall (upon receipt of
an undertaking by or on behalf of the director, officer, employee or agent involved to repay the
Expenses described herein unless it shall ultimately be determined that he or she is entitled to be
indemnified by the Corporation against such Expenses) pay Expenses incurred by such director,
officer, employee or agent in defending a Proceeding or appearing as a witness at a time when he or
she has not been named as a defendant or a respondent with respect thereto in advance of the final
disposition of such Proceeding.
SECTION 3
.
INSURANCE
.
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, or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another domestic or foreign corporation, partnership, joint venture, trust or
other enterprise or as a trustee or administrator under an employee benefit plan) against any
liability asserted against him or her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the Corporation would have the power to indemnify
him or her against such liability.
SECTION 4
.
OTHER INDEMNIFICATION
.
The Corporations obligation, if any, to
indemnify any person who was or is serving at its request as a director, officer, employee or agent
of another foreign or domestic corporation, partnership, joint venture, trust, or other entity
shall be reduced by any amount such person may collect as indemnification from such other entity.
SECTION 5
.
DEFINITIONS
.
The following terms as used in this Article shall have
the following meanings. Proceeding means any threatened, pending or completed action, suit, or
proceeding and any appeal therein (and any inquiry or investigation that could lead to such action,
suit, or proceeding), whether civil, criminal, administrative, investigative or arbitrative and
whether formal or informal. Expenses means expenses of every kind, including counsel fees.
Liability means the obligation to pay a judgment, settlement, penalty, fine (including an excise
tax assessed with respect to an employee benefit plan), reasonable expenses incurred with respect
to a Proceeding, and all reasonable expenses incurred in enforcing the indemnification rights
provided herein. Director, officer, employee and agent include the estate or personal
representative of a director, officer, employee or agent. Corporation shall include any domestic
or foreign predecessor of this Corporation in a merger or other transaction in which the
predecessors existence ceased upon consummation of the transaction.
/s/ James W. Gayton
Secretary
May 31, 2007
Exhibit 10.1
RESTRICTED STOCK AGREEMENT
(Non-Employee Director)
THIS RESTRICTED STOCK AGREEMENT, made and entered into as of the day of , 20 , by and between Smart Online, Inc., a Delaware corporation (the Company), and , a member of the Companys Board of Directors (the Director).
WHEREAS, in consideration of the services of the Director, the Company is desirous of giving the Director shares of common stock of the Company under the Companys 2004 Equity Compensation Plan (the Plan) (all capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan), subject to the restrictions set forth below.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises set forth below and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Restricted Stock Award . The Company shall issue ( ) shares of the common stock of the Company (the Securities) to the Director, as part of the Directors compensation. The Securities are subject to the restrictions set forth in Section 4 below.
2. Director Representations . The Director hereby acknowledges and represents the following:
(a) Compensation. The Director acknowledges that the Securities is part of his or her compensation from the Company.
(b) Investment . The Director will treat the Securities as if acquired for investment for the Directors own account and not with a view to, or for resale in connection with, any distribution thereof, and Director has no present intention of selling or distributing the Securities. The Director does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person with respect to any of the Securities other than as set forth in this Agreement. The Director understands that the Securities to be issued to the Director have not been registered under the Securities Act of 1933, as amended (the Act) by reason of a specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.
(c) Taxes . The Director has not relied upon the Company with respect to any tax consequences related to the acquisition or disposition of the Securities. The Director acknowledges that the Director may incur a substantial tax liability. The Director assumes full responsibility for all such consequences and the filing of all tax returns and elections the Director may be required or find desirable to file in connection therewith. In the event any valuation of the Securities purchased pursuant to its exercise must be made under federal or state tax laws and such valuation affects any return or election of the Company, the Director agrees that the Company may determine such value and that the Director will observe any determination so made by the Company in all returns and elections filed by the Director. In the event the Company is required by applicable law to collect any withholding, payroll or similar taxes by reason of the grant of the Securities, the Director agrees that the Company may withhold such taxes from any monetary amounts otherwise payable by the Company to the Director and that, if such amounts are insufficient to cover the taxes required to be collected by the Company, the Director will pay to the Company such additional amounts as are required.
(d) No Registration Obligation . The Company will be under no obligation to register the Securities or to comply with any exemption available for sale of the Securities by the Director without registration, and the Company is under no obligation to act in any manner so as to make Rule 144 promulgated under the Securities Act of 1933 available with respect to any sale of the Securities by the Director.
(e) Underwriter Restrictions . In the event any underwriter of securities of the Company requests the Director to sign any agreement restricting resale of the Securities in connection with any public offering by the Company, the Director agrees to sign such agreement, provided the officers of the Company have signed an agreement no less restrictive. The Company may instruct its transfer agent not to transfer the Securities if requested by an underwriter as described above.
(f) Compliance with Securities Laws . The Director hereby agrees to comply with any plan, policy or other document of the Company approved by the Board of Directors of the Company to ensure compliance with securities laws, rules and regulations both prior to the Termination of Service of the Director and for one (1) year thereafter. The Company may impose stop transfer restrictions with respect to the Securities to enforce this provision.
(g) Legends . Each certificate representing Securities shall also bear any legend required by any applicable state securities law or by any other agreement to which the holder thereof is a party or by which the holder thereof is bound, including the provisions of any existing lock-up or similar agreements between the Director and the Company, and including the following legend as required in Section 4, below:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ASSIGNED, CONVEYED OR PLEDGED ONLY UPON COMPLIANCE WITH THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT, AS THE SAME MAY BE AMENDED OR REPLACED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH, AND AVAILABLE FOR INSPECTION AT THE OFFICES OF THE SECRETARY OF THE CORPORATION.
3. Condition to Issuance . The representations, warranties, understandings, acknowledgments and agreements in this Agreement are true and accurate as of the date hereof, shall be true and accurate as of the date of the issuance of the Securities by the Company and shall survive thereafter.
4. Restrictions . The Securities described above shall be subject to the following restrictions:
(a) Restriction Period; Lapse of Restriction . For a period of one (1) year following the date of this Agreement, the Director agrees not to transfer, assign or sell the Securities, without the express written consent of the Company, which may be granted or withheld in the sole discretion of the Company. This restriction shall expire and cease to be of any effect with respect to the number of shares equal to twenty-five percent (25%) of the Securities in four (4) equal quarterly increments for one year following the date hereof; provided that this restriction shall lapse with respect to an increment as specified only if the Director is a member of the Companys Board of Directors on the specified date for such increment. Shares representing the Securities shall bear a legend to such effect.
The schedule set forth above is cumulative, so that the Securities as to which the restriction has lapsed on and after a date indicated by the schedule may be transferred, assigned, or sold at any subsequent date.
(b) Acceleration of Lapse of Restriction . Upon a Change of Control or Corporate Organization, as defined below, the restriction set forth in Section 5(a) shall accelerate so as to lapse as to all of the Securities to which the restriction applies on the date of such event.
(i) A Change in Control shall be deemed to have occurred if, after the class of stock then subject to this Agreement becomes publicly traded, (1) the direct or indirect beneficial ownership (within the meaning of Section 13(d) of the Act and Regulation 13D thereunder) of fifty percent (50%) or more of the class of securities then subject to this Agreement is acquired or becomes held by any person or group of persons (within the meaning of Section 13(d)(3) of the Act), but excluding the Company and any employee benefit plan sponsored or maintained by the Company, or (2) assets or earning power constituting more than fifty percent (50%) of the assets or earning power of the Company and its subsidiaries (taken as a whole) is sold, mortgaged, leased or otherwise transferred, in one or more transactions not in the ordinary course of the Companys business, to any such person or group of persons; provided, however, that a Change in Control shall not be deemed to have occurred upon an investment by one or more venture capital funds, Small Business Investment Companies (as defined in the Small Business Investment Act of 1958, as amended) or similar financial investors. For the purposes of this Agreement, the class of stock then subject to this Agreement shall be deemed to be publicly traded if such stock is listed or admitted to unlisted trading privileges on a national securities exchange or as to which sales or bid and offer quotations are reported in the automated system operated by the National Association of Securities Dealers, Inc.
(ii) A Corporate Reorganization means the happening of any one (1) of the following events: (1) the dissolution or liquidation of the Company; (2) a capital reorganization, merger or consolidation involving the Company, unless (A) the transaction involves only the Company and one or more of the Companys parent corporation and wholly-owned (excluding interests held by employees, officers and directors) subsidiaries; or (B) the shareholders who had the power to elect a majority of the board of directors of the Company immediately prior to the transaction have the power to elect a majority of the board of directors of the surviving entity immediately following the transaction; (3) the sale of all or substantially all of the assets of the Company to another corporation, person or business entity; or (4) an acquisition of Company stock, unless the shareholders who had the power to elect a majority of the board of directors of the Company immediately prior to the acquisition have the power to elect a majority of the board of directors of the Company immediately following the transaction; provided, however, that a Corporate Reorganization shall not be deemed to have occurred upon an investment by one or more venture capital funds, Small Business Investment Companies (as defined in the Small Business Investment Act of 1958, as amended) or similar financial investors.
5. Effect of Termination of Service . The restriction on the Securities shall lapse as specified in Section 4 above until the Termination of Service of the Director for reasons other than death, Disability or Retirement. Pursuant to Section 7.6 of the Plan, where the Termination of Service is for death, Disability or Retirement, than the Committee shall determine, in its sole discretion, whether to waive any remaining restriction.
All shares of the Securities still subject to the restriction set forth in Section 5 shall be forfeited by the Director and reacquired by the Company on such date. Upon such date, the Director shall have no further rights to any Securities to which the restriction has not lapsed.
6. Rights as Stockholder . The Director shall have all rights as a stockholder with respect to the Securities; provided , however , any dividends or distributions on the Securities shall be automatically deferred and reinvested as restricted Securities subject to the same restrictions set forth in this Agreement.
7. Incorporation of the Plan . The terms and conditions included in the Plan, the receipt of a copy of which Participant hereby acknowledges by execution of this Agreement, are incorporated by reference herein, and to the extent that any conflict may exist between any term or provision of this Agreement and any term or provision of the Plan, such term or provision of the Plan shall control.
8. Governing Law . This Agreement shall be enforced, governed and construed in all respects in accordance with the laws of the State of Delaware, as such laws are applied by Delaware courts to agreements entered into and to be performed in Delaware, and shall be binding upon the Director, the Directors heirs, estate, legal representatives, successors and assigns and shall inure to the benefit of the Company and its successors and assigns.
9. Miscellaneous . This Agreement and the Plan constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes any and all prior or contemporaneous representations, warranties, agreements and understandings in connection therewith, other than any existing lock-up or similar agreements between the parties which by their terms would apply to the Securities. This Agreement may be amended only by a writing executed by all parties hereto. This Agreement may be executed in one or more counterparts.
1
IN WITNESS WHEREOF, Director has executed this Restricted Stock Agreement effective as of the date
first written above.
Print Name:
SMART ONLINE, INC.
By:
Name:
Title:
2
Exhibit 99.1
Media:
Thomas Furr
Smart Online, Inc.
919-765-5000
tfurr@smartonline.com
Smart Online Appoints David E. Colburn to Board of Directors
RESEARCH TRIANGLE PARK, N.C., May 31, 2007 Smart Online Inc. (OTCBB: SOLN), a leading provider of Software-as-a-Service (SaaS) for the small business market, today announced the appointment of an independent director, David E. Colburn, to its board of directors, effective May 31, 2007.
Mr. Colburn served as President from 2004 to 2006 of the Global Manufacturing Industry Practice of Electronic Data Systems (EDS), which is a leading provider of business and technology solutions. He has been responsible for developing EDS global manufacturing industry business and sales strategy for its automotive, industrial manufacturing, high tech, and aerospace and defense segments. Prior to serving as the President of the Global Manufacturing Industry Practice of EDS, Mr. Colburn also held positions in EDS as the Area Director of Manufacturing Automotive, Vice President of the Global Industry Group, and Vice President of Global Industrial Manufacturing within the Global Industry Group. Mr. Colburn has also been President of four different corporations in the Manufacturing and Industrial segments. He has served as chairman and on the boards of directors of several automotive industry associations. Mr. Colburn received a Bachelor of Arts in Liberal Arts from Robert Wesleyan College, and previously served on that institutions Board of Trustees.
We are pleased to welcome Mr. Colburn to Smart Onlines board of directors. We believe his experience and leadership with large public companies in the areas of operations, finance, auditing, and corporate governance will be particularly valuable to Smart Online as we continue to take advantage of the growing small business SaaS market, said Jeff LeRose, Chairman of the Board.
I am pleased to have this opportunity to be a part of a leading company in the SaaS sector. I am aware of the challenges and rewards that come with being on the board of a cutting-edge technology company such as Smart Online. Having spent many years in the technology arena, I fully appreciate the benefits that SaaS delivered business applications can have on assisting small businesses to start and grow their business, said David Colburn.
About Smart Online, Inc.
Smart Online Inc. (OTCBB: SOLN), a pioneer of Web-native applications, offers a private-label syndicated online business platform that enables Web delivery of applications and services used to start and manage small businesses. In 1999, Smart Online converted its business applications to a Software-as-a-Service (SaaS) Web delivery model. Today, the company markets its Web-based business applications to corporations via the private-labeling of its syndicated software services. These companies private-label and add to their Web sites Smart Onlines applications to enable their business customers to run their businesses more efficiently and without the upfront capital typically required for traditional business software and IT resources. To learn more go to http://www.smartonline.com.
Smart Online, the Smart Online logo, and OneBiz SM are trademarks and/or registered trademarks of Smart Online Inc. in the United States. Other marks belong to their respective owners.
Forward-Looking Statements
Statements in this press release that are forward-looking statements, are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of many factors, including, but not limited to, delays in development schedules, changes in market conditions, product announcements by other companies and customer perception of the value of our enhanced products. For further information regarding risks and uncertainties associated with Smart Onlines business, please refer to the Risk Factors Section of Smart Onlines SEC filings, including, but not limited to, its Annual Report on Form 10-K for the year ended December 31, 2005 and Quarterly Reports on Form 10-Q , copies of which may be obtained on the Web site of the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Smart Online on the date hereof. Smart Online undertakes no duty to update any forward-looking statement or to conform the statement to actual results or changes in Smart Onlines expectations.