As filed with the Securities and Exchange Commission on April 5, 2002
Registration No. 333-83728
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
OVERSTOCK.COM, INC.
(Exact name of registrant as specified in its charter)
Delaware | 5999 | 87-0634302 |
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Overstock.com, Inc.
6322 South 3000 East, Suite 100
Salt Lake City, Utah 84121
(801) 947-3100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Patrick Byrne
President and Chief Executive Officer
Overstock.com, Inc.
6322 South 3000 East, Suite 100
Salt Lake City, Utah 84121
(801) 947-3100
(Name and address, including zip code, of agent for service)
Copies to:
Robert G. O'Connor, Esq. | Robert S. Townsend, Esq. | |
David R. Bowman, Esq. | Russell J. Wood, Esq. | |
Wilson Sonsini Goodrich & Rosati | Harrison S. Clay, Esq. | |
Professional Corporation | Morrison & Foerster LLP | |
2795 E. Cottonwood Parkway, Suite 300 | 425 Market Street | |
Salt Lake City, Utah 84121 | San Francisco, California 94105 | |
(801) 993-6400 | (415) 268-7000 |
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 145 under the Securities Act of 1933, check the following box./ /
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering./ /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering./ /
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box./ /
Overstock.com, Inc. hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Overstock.com, Inc. shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Explanatory Note
The purpose of this Amendment No. 1 to the Registration Statement is solely to file Exhibits 3.1A, 3.1B, 3.2A, 3.2B, 4.2, 10.1, 10.9, 10.11, 10.14 and 10.15 to the Registration Statement, as set forth below in Item 16(a) of Part II.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by Overstock.com, Inc. in connection with the sale of Common Stock being registered. All amounts are estimates except the SEC registration fee and the NASD filing fee.
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SEC registration fee | $ | 3,386 | ||
NASD filing fee | 4,180 | |||
Nasdaq National Market listing fee | 95,000 | |||
Printing and engraving costs | ||||
Legal fees and expenses | ||||
Accounting fees and expenses | ||||
Blue sky fees and expenses | ||||
Transfer agent and registrar fees | ||||
Miscellaneous expenses | ||||
Total | ||||
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law permits a corporation to include in its charter documents, and in agreements between the corporation and its directors and officers, provisions expanding the scope of indemnification beyond that specifically provided by the current law.
Article V of our Amended and Restated Certificate of Incorporation provides for the indemnification of directors to the fullest extent permissible under Delaware law.
Article 5 of our Bylaws provides for the indemnification of officers, directors and third parties acting on behalf of Overstock.com, Inc. if such person acted in good faith and in a manner reasonably believed to be in and not opposed to the best interest of Overstock.com, Inc., and, with respect to any criminal action or proceeding, the indemnified party had no reason to believe his or her conduct was unlawful.
We have entered into indemnification agreements with our directors and executive officers, in addition to indemnification provided for in our Bylaws, and intend to enter into indemnification agreements with any new directors and executive officers in the future.
Item 15. Recent Sales of Unregistered Securities
During the last three years, we have issued unregistered securities to a limited number of persons, as described below. As indicated below, we have relied on Regulation D, Rule 506 thereof, Rule 701 or Section 4(2) of the Securities Act with respect to the issuance of these securities.
II-1
II-2
The foregoing transactions were exempt from registration under the Securities Act pursuant to Rule 701 promulgated thereunder on the basis that these options were offered and sold either pursuant to a written compensatory benefit plan or pursuant to written contracts relating to consideration, as provided by Rule 701, pursuant to Section 4(2) thereof or Regulation D, Rule 506 thereof on the basis that the transactions did not involve a public offering. None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
Exhibit Number |
Description of Document |
|
---|---|---|
1.1** | Form of Underwriting Agreement | |
3.1A | Articles of Amendment to the Amended and Restated Articles of Incorporation of Overstock.com, a Utah corporation and the Amended and Restated Articles of Incorporation currently in effect | |
3.1B | Amended and Restated Certificate of Incorporation of Overstock.com, Inc., a Delaware corporation effective upon the reincorporation of the Registrant in Delaware dated as of March 15, 2002 | |
3.1C** | Form of Amended and Restated Certificate of Incorporation of Overstock.com, Inc. to be in effect after the completion of the offering made pursuant to this Registration Statement | |
3.2A | Bylaws of Overstock.com, Inc. currently in effect | |
3.2B | Form of Bylaws of Overstock.com, Inc. to be in effect after the reincorporation of Overstock.com, Inc. in Delaware | |
3.2C** | Form of Amended and Restated Bylaws of Overstock.com, Inc. to be in effect after the closing of the offering made pursuant to this Registration Statement | |
4.1** | Form of specimen certificate for Overstock.com, Inc.'s common stock | |
4.2 | Investor Rights Agreement dated March 4, 2002 | |
5.1* | Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation | |
10.1 | Form of Indemnification Agreement between Overstock.com, Inc. and each of its directors and officers | |
10.2* | 1999 Stock Option Plan and form of agreements thereunder | |
10.3* | 2001 Stock Purchase Plan and form of agreements thereunder | |
10.4* | Gear.com Restated 1998 Stock Option Plan and form of agreements thereunder | |
10.5** | 2002 Stock Plan and form of agreements thereunder | |
10.6* | Agreement and Plan of Merger dated November 3, 2000 by and between Overstock.com, Inc. and Gear.com, Inc. | |
10.7** | Severance Package Agreement with Scott Stewart dated June 17, 1999 | |
10.8* | Lease Agreement dated January 23, 2002 between Overstock.com, Inc. and Holladay Building East L.L.C. | |
10.9 | Lease Agreement dated November 27, 2001 between Overstock.com and Holladay Building East L.L.C. | |
10.10* | First Lease Extension Agreement dated January 25, 2002 by and between Overstock.com, Inc. and Holladay Building East L.L.C. | |
10.11 | Lease Agreement, as amended, between 2855 E. Cottonwood Parkway, L.C., and Discountsdirect, dated December 21, 1998 |
II-3
10.12* | Lease Agreement by and between Overstock.com, Inc. and Marvin L. Oates Trust dated March 15, 2000 | |
10.13** | Severance Package Agreement with Douglas Greene dated June 17, 1999 | |
10.14 | Intellectual Property Assignment Agreement with Douglas Greene dated February 28, 2002 | |
10.15 | Strategic Alliance and Product Sales Agreement dated February 26, 2002 between Overstock.com, Inc. and Safeway Inc. | |
23.1* | Consent of Independent Accountants | |
23.2* | Consent of Arthur Andersen LLP | |
23.3* | Consent of Counsel (included in Exhibit 5.1) | |
24.1* | Power of Attorney |
(b) Financial Statement Schedules
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
The undersigned hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification by Overstock.com, Inc. for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Overstock.com, Inc. pursuant to the provisions referenced in Item 14 of this Registration Statement or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Overstock.com, Inc. of expenses incurred or paid by a director, officer, or controlling person of Overstock.com, Inc. in the successful defense of any action, suit or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered hereunder, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
II-4
Pursuant to the requirements of the Securities Act of 1933, as amended, Overstock.com, Inc. has duly caused this Amendment to the Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Salt Lake City, State of Utah, on the 5th day of April, 2002.
OVERSTOCK.COM, INC. | |||
By: |
/s/ PATRICK M. BYRNE Patrick M. Byrne, President, Chief Executive Officer and Director |
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature |
Title |
Date |
||
---|---|---|---|---|
/s/ PATRICK M. BYRNE (Patrick M. Byrne) |
President, Chief Executive Officer and Director (Principal Executive Officer) | April 5, 2002 | ||
* (Jason C. Lindsey) |
Chief Financial Officer and Director (Principal Financial and Accounting Officer) |
April 5, 2002 |
||
* (John Pettway) |
Director |
April 5, 2002 |
||
* (John J. Byrne) |
Director |
April 5, 2002 |
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* (Gordon S. Macklin) |
Director |
April 5, 2002 |
||
* (Gary D. Kennedy) |
Director |
April 5, 2002 |
||
(Allison H. Abraham) |
Director |
April 5, 2002 |
* By | /s/ PATRICK M. BYRNE Patrick M. Byrne Attorney-in-Fact |
II-5
Exhibit Number |
Description of Document |
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---|---|---|
1.1** | Form of Underwriting Agreement | |
3.1A | Articles of Amendment to the Amended and Restated Articles of Incorporation of Overstock.com, Inc., a Utah corporation and the Amended and Restated Articles of Incorporation currently in effect | |
3.1B | Amended and Restated Certificate of Incorporation of Overstock.com, Inc., a Delaware corporation effective upon the reincorporation of the Registrant in Delaware dated as of March 15, 2002 | |
3.1C** | Form of Amended and Restated Certificate of Incorporation of Overstock.com, Inc. to be in effect after the completion of the offering made pursuant to this Registration Statement | |
3.2A | Bylaws of Overstock.com, Inc. currently in effect | |
3.2B | Form of Bylaws of Overstock.com, Inc. to be in effect after the reincorporation of Overstock.com, Inc. in Delaware | |
3.2C** | Form of Amended and Restated Bylaws of Overstock.com, Inc. to be in effect after the closing of the offering made pursuant to this Registration Statement | |
4.1** | Form of specimen certificate for Overstock.com, Inc.'s common stock | |
4.2 | Investor Rights Agreement dated March 4, 2002 | |
5.1* | Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation | |
10.1 | Form of Indemnification Agreement between Overstock.com, Inc. and each of its directors and officers | |
10.2* | 1999 Stock Option Plan and form of agreements thereunder | |
10.3* | 2001 Stock Purchase Plan and form of agreements thereunder | |
10.4* | Gear.com Restated 1998 Stock Option Plan and form of agreements thereunder | |
10.5** | 2002 Stock Plan and form of agreements thereunder | |
10.6* | Agreement and Plan of Merger dated November 3, 2000 by and between Overstock.com, Inc. and Gear.com, Inc. | |
10.7** | Severance Package Agreement with Scott Stewart dated June 17, 1999 | |
10.8* | Lease Agreement dated January 23, 2002 between Overstock.com, Inc. and Holladay Building East L.L.C. | |
10.9 | Lease Agreement dated November 27, 2001 between Overstock.com and Holladay Building East L.L.C. | |
10.10* | First Lease Extension Agreement dated January 25, 2002 by and between Overstock.com, Inc. and Holladay Building East L.L.C. | |
10.11 | Lease Agreement, as amended, between 2855 E. Cottonwood Parkway, L.C., and Discountsdirect, dated December 21, 1998 | |
10.12* | Lease Agreement by and between Overstock.com, Inc. and Marvin L. Oates Trust dated March 15, 2000 | |
10.13** | Severance Package Agreement with Douglas Greene dated June 17, 1999 | |
10.14 | Intellectual Property Assignment Agreement with Douglas Greene dated February 28, 2002 | |
10.15 | Strategic Alliance and Product Sales Agreement dated February 26, 2002 between Overstock.com, Inc. and Safeway Inc. | |
23.1* | Consent of Independent Accountants | |
23.2* | Consent of Arthur Andersen LLP | |
23.3* | Consent of Counsel (included in Exhibit 5.1) | |
24.1* | Power of Attorney |
Exhibit 3.1A
ARTICLES OF AMENDMENT TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
OVERSTOCK.COM, INC.
Overstock.com, Inc., a Utah corporation (the Company), acting pursuant to Sections 16-10a-602 and 16-10a-1002 of the Utah Revised Business Corporation Act (the Act), hereby submits for filing these Articles of Amendment to its Amended and Restated Articles of Incorporation and hereby certifies as follows:
1. The name of the Company is Overstock.com, Inc.
2. The following text is added to the end of Article III of the Companys Amended and Restated Articles of Incorporation as previously in effect (the Amendment):
Preferred Stock.
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the settlement of disputes with any stockholder, or (iv) any other repurchase or redemption of capital stock of the Company approved by the holders of a majority of the Common Stock of the Company and the holders of at least 65% of the Series A Preferred Stock of the Company voting as separate classes.
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(ii) Common Stock. For purposes of this Section 1.2, the fair market value of one share of common stock shall be: (x) the initial price to public specified in the final prospectus with respect to a Qualified Offering; (y) the value received by the holders of Common Stock pursuant to a Merger or Consolidation for each share of such securities; or (z) as determined pursuant to Section 1.2(d)(i) above if there is no Qualified Offering or Merger or Consolidation.
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available for distribution to the holders of the Series A Preferred Stock are insufficient to permit the payment to such holders of the full amounts specified in this Section 1.3(a), then the entire assets of the Company legally available for distribution shall be distributed with equal priority and pro rata among the holders of the Series A Preferred Stock in proportion to the full amounts they would otherwise be entitled to receive pursuant to this Section 1.3(a).
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In the event of a merger or other acquisition of the Company by another entity, the Distribution date shall be deemed to be the date such transaction closes.
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On the date of the occurrence of an Automatic Conversion Event, each holder of record of shares of Series A Preferred Stock shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, notwithstanding that the certificates representing such shares of Series A Preferred Stock shall not have been surrendered at the office of the Company, that notice from the Company shall not have been received by any holder of record of shares of Series A Preferred Stock, or that the certificates evidencing such shares of Common Stock shall not then be actually delivered to such holder.
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Company for the issue of such exercised Options plus the consideration actually received by the Company upon such exercise or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Company upon such conversion or exchange, and
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provided for the benefit of the Series A Preferred Stock or (ii) increase or decrease the number of authorized shares of any class of stock or the Series A Preferred;
3. The Amendment was approved and adopted by the Board of Directors of the Company on March 4, 2002 without shareholder action because shareholder action was not required pursuant to Sections 16-10a-602 and 16-10a-1002 of the Act.
IN WITNESS WHEREOF, these Articles of Amendment are hereby executed as of the 4th day of March, 2002.
/s/ Patrick Byrne |
Patrick Byrne |
President and Chief Executive Officer |
13
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
of
OVERSTOCK.COM, INC.
(To Become Effective 5:00 p.m. September 21, 2000)
The undersigned, Patrick Byrne, being the President and Chief Executive Officer of deals.com, Inc., a Utah corporation (the Company), hereby certifies the following:
1. The Articles of Incorporation of the Company have been amended and restated to read as follows:
The name of this corporation is Overstock.com, Inc. (the Company).
The purposes for which the Company is organized is to engaged in any lawful activity allowed by the Utah Revised Business Corporation Act (the Act).
Authorized Capital. The aggregate number of shares which the Company shall have the authority to issue is Five Hundred Million (500,000,000) shares. Of this amount, Four Hundred and Fifty Million (450,000,000) shares shall be designated Common Stock, with no par value, and Fifty Million (50,000,000) shares shall be designated Preferred Stock, having rights, preferences, qualifications, limitations or restrictions as set forth herein and as determined at some future time by the Companys Board of Directors in its discretion pursuant to Section 602 of the Act.
Common Stock. The Common Stock shall have unlimited voting rights with each share of Common Stock entitling the holder thereof to one vote. The Common Stock is entitled to receive dividends when, as, and if declared by the Board of Directors. Subject to the terms of the Preferred Stock, the Common Stock is entitled to the net assets of the Company upon liquidation.
The address of the registered office of the Corporation is 2855 East Cottonwood Parkway, Suite 500, Salt Lake City, Utah 84121. The name of the registered agent of the Corporation at that address is Jason Lindsey.
A director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for any action taken or any failure to take any action as a director, except liability for: (i) the amount of a financial benefit received by a director to which such director is not entitled; (ii) an intentional infliction of harm on the Company or the shareholders; (iii) a violation of Section 842 of the Act; or (iv) an intentional violation of criminal law. If the laws of the State of Utah are amended after the adoption of these Amended and Restated Articles of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Company shall be eliminated or limited to the fullest extent permitted by the laws of the State of Utah, as so amended. Any repeal or modification of the foregoing paragraph by the stockholders of the Company shall not adversely affect any right or protection of a director of the Company existing at the time of such repeal or modification.
[End of Amended and Restated Articles of Incorporation]
2. These Amended and Restated Articles of Incorporation were approved and recommended to the shareholders of the Company by its Board of Directors on August 18, 2000.
3. The Company has 157,023,527 shares of outstanding Common Stock that were entitled to vote on these Amended and Restated Articles of Incorporation. Pursuant to written consent, effective as of September 11, 2000, the holders of 88,216,556 shares of Common Stock (56.1% of the shares issued and outstanding) consented to the Amended and Restated Articles of Incorporation as stated herein, and therefore, the number of shares voting in favor of the proposed Amended and Restated Articles of Incorporation by each voting group entitled to vote thereon was sufficient for approval by that voting group.
4. These Amended and Restated Articles of Incorporation shall, in accordance with Section 129 of the Act, become effective at 5:00 p.m. September 21, 2000.
IN WITNESS WHEREOF, the undersigned has executed these Amended and Restated Articles of Incorporation as of this 18th day of September, 2000.
/s/ Karla Bourland
Karla Bourland, President
Exhibit 3.1B
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
OVERSTOCK.COM, INC.
Overstock.com, Inc., a corporation organized and existing under the laws of the State of Delaware (the Corporation), certifies that:
A. The name of the Corporation is Overstock.com, Inc. The Corporations original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 27, 2002.
B. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware, and restates, integrates and further amends the provisions of the Corporations Certificate of Incorporation.
C. The text of the Certificate of Incorporation is amended and restated to read as set forth in EXHIBIT A attached hereto.
IN WITNESS WHEREOF, Overstock.com, Inc. has caused this Amended and Restated Certificate of Incorporation to be signed by Patrick Byrne, a duly authorized officer of the Corporation, on March 15, 2002.
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/s/ Patrick M. Byrne |
|
Patrick Byrne, |
Exhibit A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
OVERSTOCK.COM, INC.
ARTICLE I
NAME
The name of this corporation is Overstock.com, Inc. (the Company).
ARTICLE II
PURPOSE
The purposes for which the Company is organized is to engage in any lawful activity allowed by Delaware General Corporation Law (the DGCL).
ARTICLE III
CAPITALIZATION
Authorized Capital. The aggregate number of shares which the Company shall have the authority to issue is Five Hundred Million (500,000,000) shares. Of this amount, Four Hundred and Fifty Million (450,000,000) shares shall be designated Common Stock, with a par value of $0.0001, and Fifty Million (50,000,000) shares shall be designated Preferred Stock, with a par value of $0.0001, having rights, preferences, qualifications, limitations or restrictions as set forth herein and as determined at some future time by the Companys Board of Directors in its discretion pursuant to Section 151 of the DGCL.
Common Stock. The Common Stock shall have unlimited voting rights with each share of Common Stock entitling the holder thereof to one vote. The Common Stock is entitled to receive dividends when, as, and if declared by the Board of Directors. Subject to the terms of the Preferred Stock, the Common Stock is entitled to the net assets of the Company upon liquidation.
Preferred Stock.
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(ii) Common Stock. For purposes of this Section 3.2, the fair market value of one share of common stock shall be: (x) the initial price to public specified in the final prospectus with respect to a Qualified Public Offering; (y) the value received by the holders of Common Stock pursuant to a Merger or Consolidation for each share of such securities; or (z) as determined pursuant to Section 3.2(d)(i) above if there is no Qualified Public Offering or Merger or Consolidation.
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In the event of a merger or other acquisition of the Company by another entity, the Distribution date shall be deemed to be the date such transaction closes.
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ARTICLE IV
REGISTERED AGENT AND ADDRESS OF REGISTERED OFFICE
The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
ARTICLE V
LIMITATION OF LIABILITY AND INDEMNIFICATION
5.1 Limitation of Liability.
To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as it may hereafter be amended, the directors of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director.
5.2 Indemnification of Corporate Agents.
To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of, and advancement of expenses to, directors, officers, employees, or other agents of the Company and any other person to which the Delaware General Corporation Law permits the Company to provide indemnification.
5.3 Repeal or Modification.
Any repeal or modification of this Article V, by amendment of such article or by operation of law, shall not adversely affect any right or protection of a director, officer, employee or other agent of the Company existing at the time of, or increase the liability of any such person with respect to any acts or omissions in their capacity as a director, officer, employee, or other agent of the Company occurring prior to, such repeal or modification.
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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation is hereby executed as of the 15th day of March, 2002.
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/s/ Patrick M. Byrne |
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Patrick Byrne |
Exhibit 3.2A
BYLAWS OF
D2 DISCOUNTS DIRECT, INC.
Adopted by Resolution Effective January 1, 1999
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Indemnification of Agents and Employees Who Are Not Directors or Officers |
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iii
1.1. Business Offices. The principal office of the corporation shall be located in such location as the board of directors may determine from time to time. The corporation may have such other offices, either within or without Utah, as the board of directors may designate or as the business of the corporation may require from time to time.
1.2. Registered Office. The registered office of the corporation required to be kept by the Utah Revised Business Corporation Act (as it may be amended from time to time, the Act) shall be located within the State of Utah and may be, but need not be, identical with the principal office. The address of the registered office may be changed from time to time.
2.1. Annual Meeting. The annual meeting of the shareholders shall be held on such date and such time as shall be designated from time to time by the board of directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall be held on the next succeeding business day.
2.2. Special Meetings. Special meetings of the shareholders, for any purpose or purposes described in the meeting notice, may be called by the president or by the board of directors, and shall be called by the president at the written request of the holders of not less than onetenth of all the votes entitled to be cast on any issue proposed to be considered at the meeting.
2.3. Place of Meeting. The board of directors may designate any place, either within or without the State of Utah, as the place of meeting for any annual or any special meeting of the shareholders. If no designation is made by the directors, the place of meeting shall be the principal office of the corporation in the State of Utah.
2.4. Notice of Meeting.
2.4.(a) Content and Mailings Requirements. Written notice stating the date, time and place of each annual or special shareholder meeting shall be delivered no fewer than 10 nor more than 60 days before the date of the meeting, either personally or by mail, by or at the direction of the president, the board of directors, or other persons calling the meeting, to each shareholder of record entitled to vote at such meeting and to any other shareholder entitled by the Act or the articles of incorporation to receive notice of the meeting. Notice of special shareholder meetings shall include a description of the purpose or purposes for which the meeting is called.
2.4.(b) Effective Date. Written notice shall be deemed to be effective at the earlier of: (1)
when mailed, if addressed to the shareholders address shown in the corporations current record of shareholders; (2) when received; (3) five days after it is mailed; or (4) on the date shown on the return receipt if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.
2.4.(c) Effect of Adjournment. If any shareholder meeting is adjourned to a different date, time or place, notice need not be given of the new date, time and place, if the new date, time and place is announced at the meeting before adjournment. But if a new record date for the adjourned meeting is or must be fixed, then notice must be given pursuant to the requirements of this section to those persons who are shareholders as of the new record date.
2.5. Waiver of Notice.
2.5.(a) Written Waiver. A shareholder may waive any notice required by the Act, the articles of incorporation or the bylaws, by a writing signed by the shareholder entitled to the notice, which is delivered to the corporation (either before or after the date and time stated in the notice) for inclusion in the minutes or filing with the corporate records.
2.5.(b) Attendance at Meetings. A shareholders attendance at a meeting: (1) waives objection to lack of notice or defective notice of the meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting because of lack of notice or effective notice; and (2) waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the shareholder objects to considering the matter when it is presented.
2.6. Record Date.
2.6.(a) Fixing of Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or shareholders entitled to receive payment of any distribution, or in order to make a determination of shareholders for any other proper purpose, the board of directors may fix in advance a date as the record date. Such record date shall not be more than 70 days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is so fixed by the board for the determination of shareholders entitled to notice of, or to vote at, a meeting of shareholders, the record date for determination of such shareholders shall be at the close of business on the day before the first notice is delivered to shareholders. If no record date is fixed by the board for the determination of shareholders entitled to receive a distribution, the record date shall be the date the board authorizes the distribution. If no record date is fixed by the board for the determination of shareholders entitled to take action without a meeting, the record date shall be the date the first shareholder signs a consent.
2.6.(b) Effect of Adjournment. When a determination of shareholders entitled to vote at
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any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the board of directors fixes a new record date, which it must do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
2.7. Shareholder List. After fixing a record date for a shareholders meeting, the corporation shall prepare a list of the names of its shareholders entitled to be given notice of the meeting. The list must be arranged by voting group and within each voting group by class or series of shares, must be alphabetical within each class or series, and must show the address of, and the number of shares held by, each shareholder. The shareholder list must be available for inspection by any shareholder, beginning on the earlier of ten days before the meeting for which the list was prepared or two business days after notice of the meeting is given for which the list was prepared and continuing through the meeting and any adjournment thereof. The list shall be available at the corporations principal office or at a place identified in the meeting notice in the city where the meeting will be held.
2.8. Shareholder Quorum and Voting Requirements.
2.8.(a) Quorum. At any meeting of shareholders, a majority of the issued and outstanding shares of the corporation entitled to vote, represented in person or in proxy, shall constitute a quorum. Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if a quorum of those shares exists with respect to that matter. Unless the articles of incorporation or the Act provide otherwise, a majority of the votes entitled to be cast on the matter by the voting group constitutes a quorum of that voting group for action on that matter. Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting.
2.8.(b) Voting Groups. If the articles of incorporation or the Act provide for voting by a single voting group on a matter, action on that matter is taken when voted upon by that voting group. If the articles of incorporation or the Act provide for voting by two or more voting groups on a matter, action on that matter is taken only when voted upon by each of those voting groups counted separately. Action may be taken by one voting group on a matter even though no action is taken by another voting group entitled to vote on the matter.
2.8.(c) Shareholder Action. If a quorum exists, action on a matter, other than the election of directors, by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action, unless the articles of incorporation or the Act require a greater number of affirmative votes. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.
2.9. Proxies. At all meetings of shareholders, a shareholder may vote in person or by proxy which is executed in writing by the shareholder or which is executed by his or her duly authorized attorneyinfact. Such proxy shall be filed with the secretary of the corporation or other person authorized
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to tabulate votes before or at the time of the meeting. No proxy shall be valid after 11 months from the date of its execution unless otherwise provided in the proxy.
2.10. Voting of Shares. Unless otherwise provided in the articles of incorporation or by applicable law, each outstanding share, regardless of class, is entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. Except as provided by specific court order, no shares of the corporation owned, directly or indirectly, by a second corporation, domestic or foreign, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting if a majority of the shares entitled to vote for the election of directors of such second corporation are held by the corporation. The prior sentence shall not limit the power of the corporation to vote any shares, including its own shares, held by it in a fiduciary capacity.
2.11. Meetings by Telecommunications. Any or all shareholders may participate in an annual or special meeting by, or conduct the meeting through the use of, any means of communication by which all shareholders participating may hear each other during the meeting. A shareholder participating in a meeting by this means is deemed to be present in person at the meeting.
2.12. Action Without a Meeting.
2.12.(a) Written Consent. Except for the election of directors, any action which may be taken at a meeting of the shareholders may be taken without a meeting and without prior notice if one or more consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares 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 shareholders entitled to vote with respect to the subject matter thereof were present and voted. Action taken under this section has the same effect as action taken at a meeting of shareholders and may be described as such in any document.
2.12.(b) Post-Consent Notice. Unless the written consents of all shareholders entitled to vote have been obtained, notice of any shareholder approval without a meeting shall be given at least ten days before the consummation of the action authorized by such approval to (i) those shareholders entitled to vote who have not consented in writing, and (ii) those shareholders not entitled to vote and to whom the Act requires that notice of the proposed action be given. Any such notice must contain or be accompanied by the same material that is required under the Act to be sent in a notice of meeting at which the proposed action would have been submitted to the shareholders for action.
2.12.(c) Effective Date and Revocation of Consents. No action taken pursuant to this section shall be effective unless all written consents on which the corporation relies for the taking of an action are received by the corporation within a 60-day period and not revoked. Such action is effective as of the date the last written consent necessary to effect the action is received, unless all of the written consents specify a later date as the effective date of the action. If the corporation has received written consents signed by all shareholders entitled to vote with respect to the action, the effective date of the action
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may be any date that is specified in all the written consents as the effective date of the action. Any such writing may be received by the corporation by electronically transmitted facsimile or other form of communication providing the corporation with a complete copy thereof, including a copy of the signatures thereto. Any shareholder giving a written consent pursuant to this section may revoke the consent by a signed writing describing the action and stating that the consent is revoked, provided that such writing is received by the corporation prior to the effective date of the action.
2.12.(d) Unanimous Consent for Election of Directors. Notwithstanding subsection (a) of this section, directors may not be elected by written consent unless such consent is unanimous by all shares entitled to vote for the election of directors.
3.1. General Powers. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the board of directors.
3.2. Number, Tenure and Qualifications. The authorized number of directors shall be not less than three nor more than nine; provided, however, if the number of shareholders shall be less than three, the number of directors may equal the number of shareholders. The current number of directors shall be within the limits specified above, as determined (or as amended from time-to-time) by resolution adopted by either the shareholders or the directors. Each director shall hold office until the next annual meeting of shareholders or until the directors earlier death, resignation or removal. However, if a directors term expires, the director shall continue to serve until his or her successor shall have been elected and qualified, or until there is a decrease in the number of directors. Directors do not need to be residents of Utah or shareholders of the corporation.
3.3. Regular Meetings. A regular meeting of the board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of shareholders, for the purpose of appointing officers and transacting such other business as may come before the meeting. The board of directors may provide, by resolution, the time and place for the holding of additional regular meetings without other notice than such resolution.
3.4. Special Meetings. Special meetings of the board of directors may be called by or at the request of either the president, the chairman of the board of directors, or any two directors acting together. The person(s) authorized to call special meetings of the board of directors may fix any place as the place for holding any special meeting of the board of directors.
3.5. Notice of Special Meetings. Notice of the date, time and place of any special director meeting shall be given at least two days previously thereto either orally or in writing. Oral notice shall be effective when communicated in a comprehensive manner. Written notice is effective as to each director at the earlier of: (a) when received; (b) five days after deposited in the United States mail, addressed to the
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directors address shown in the records of the corporation; or (c) the date shown on the return receipt if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the director. Any director may waive notice of any meeting before or after the date and time of the meeting stated in the notice. Except as provided in the next sentence, the waiver must be in writing and signed by the director entitled to the notice. A directors attendance at or participation in a meeting shall constitute a waiver of notice of such meeting, unless the director at the beginning of the meeting, or promptly upon his arrival, objects to holding the meeting or transacting business at the meeting because of lack of or defective notice, and does not thereafter vote for or assent to action taken at the meeting. Unless required by the articles of incorporation, neither the business to be transacted at, nor the purpose of, any special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.
3.6. Quorum and Voting.
3.6.(a) Quorum. A majority of the number of directors prescribed by resolution adopted pursuant to section 3.2 of these bylaws, or if no number is prescribed, the number in office immediately before the meeting begins, shall constitute a quorum for the transaction of business at any meeting of the board of directors, unless the articles of incorporation require a greater number.
3.6.(b) Voting. The act of the majority of the directors present at a meeting at which a quorum is present when the vote is taken shall be the act of the board of directors unless the articles of incorporation require a greater percentage.
3.6.(c) Presumption of Assent. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless: (1) the director objects at the beginning of the meeting, or promptly upon his or her arrival, to holding or transacting business at the meeting and does not thereafter vote for or assent to any action taken at the meeting; (2) the director contemporaneously requests that his or her dissent or abstention as to any specific action be entered in the minutes of the meeting; or (3) the director causes written notice of his or her dissent or abstention as to any specific action be received by the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting. The right of dissent or abstention is not available to a director who votes in favor of the action taken.
3.7. Meetings by Telecommunications. Any or all directors may participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
3.8. Action Without a Meeting. Any action required or permitted to be taken by the board of directors at a meeting may be taken without a meeting if all the directors consent to such action in writing. Action taken by written consent is effective when the last director signs the consent, unless, prior to such
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time, any director has revoked a consent by a signed writing received by the corporation, or unless the consent specifies a different effective date. A signed consent has the effect of an action taken at a meeting of directors and may be described as such in any document.
3.9. Resignation. A director may resign at any time by giving a written notice of resignation to the corporation. Such a resignation is effective when the notice is received by the corporation unless the notice specifies a later effective date, and the acceptance of such resignation shall not be necessary to make it effective.
3.10. Removal. The shareholders may remove one or more directors at a meeting called for that purpose if notice has been given that a purpose of the meeting is such removal. The removal may be with or without cause unless the articles of incorporation provide that directors may only be removed with cause. If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director. A director may be removed only if the number of votes cast to remove him or her exceeds the number of votes cast not to remove him or her.
3.11. Vacancies. Unless the articles of incorporation provide otherwise, if a vacancy occurs on the board of directors, including a vacancy resulting from an increase in the number of directors, the shareholders or the board of directors may fill the vacancy. During such time If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. If the vacant office was held by a director elected by a voting group of shareholders: (1) if one or more directors are elected by the same voting group, only such directors are entitled to vote to fill the vacancy if it is filled by the directors; and (2) only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders. A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs.
3.12. Compensation. By resolution of the board of directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the board of directors and may be paid a stated salary as director or a fixed sum for attendance at each meeting of the board of directors or both. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.
3.13. Committees. The board of directors may create one or more committees and appoint members of the board of directors to serve on them. Each committee must have two or more members, who serve at the pleasure of the board of directors. Those sections of this Article 3 which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the board of directors, apply to committees and their members.
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4.1. Number. The officers of the corporation shall be a president, a secretary and a chief financial officer, each of whom shall be appointed by the board of directors. Such other officers and assistant officers as may be deemed necessary, including any vice-presidents, may also be appointed by the board of directors. If specifically authorized by the board of directors, an officer may appoint one or more officers or assistant officers. The same individual may simultaneously hold more than one office in the corporation.
4.2. Appointment and Term of Office. The officers of the corporation shall be appointed by the board of directors for a term as determined by the board of directors. The designation of a specified term does not grant to the officer any contract rights, and the board can remove the officer at any time prior to the termination of such term. If no term is specified, the officer shall hold office until he or she resigns, dies or until he or she is removed in the manner provided in section 4.3 of these bylaws.
4.3. Removal. Any officer or agent may be removed by the board of directors at any time, with or without cause. Such removal shall be without prejudice to the contract rights, if any, of the person so removed. Appointment of an officer or agent shall not of itself create contract rights.
4.4. Resignation. Any officer may resign at any time, subject to any rights or obligation under any existing contracts between the officer and the corporation, by giving notice to the president or board of directors. An officers resignation shall be effective when received by the corporation, unless the notice specifies a later effective date, and the acceptance of such resignation shall not be necessary to make it effective.
4.5. Authority and Duties of Officers. The officers of the corporation shall have the authority and shall exercise the powers and perform the duties specified below and as may be additionally specified by the board of directors or these bylaws, except that in each event each officer shall exercise such powers and perform such duties as may be required by law:
4.5.(a) President. The president shall be the chief executive officer of the corporation and, subject to the control of the board of directors, shall in general supervise and control all of the business and affairs of the corporation. Unless there is a chairman of the board, the president shall, when present, preside at all meetings of the shareholders and of the board of directors. The president may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the board of directors, certificates for shares of the corporation and deeds, mortgages, bonds, contracts, or other instruments which the board of directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the board of directors or by these bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed. In general, the president shall perform all duties incident to the office of president and such other duties as may be prescribed by the board of directors from time to time.
4.5.(b) Vice-President. If appointed, the vicepresident (or if there is more than one, each
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vice-president) shall assist the president and shall perform such duties as may be assigned to him or her by the president or by the board of directors. If appointed, in the absence of the president or in the event of his death, inability or refusal to act, the vice-president (or in the event there is more than one vice-president, the vice-presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their appointment) shall perform 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. (If there is no vice-president, then the chief financial officer shall perform such duties of the president.)
4.5.(c) Secretary. The secretary shall: (i) keep the minutes of the proceedings of the shareholders, the board of directors and any committees of the board in one or more books provided for that purpose; (ii) see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; (iii) be custodian of the corporate records; (iv) when requested or required, authenticate any records of the corporation; (v) keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; (vi) sign with the president, or a vicepresident, certificates for shares of the corporation, the issuance of which shall have been authorized by resolution of the board of directors; (vii) have general charge of the stock transfer books of the corporation; and (viii) in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned by the president or by the board of directors. Assistant secretaries, if any, shall have the same duties and powers, subject to the supervision of the secretary.
4.5.(d) Chief Financial Officer. If appointed, the chief financial officer shall: (i) have charge and custody of and be responsible for all funds and securities of the corporation; (ii) receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies, or other depositaries as shall be selected by the board of directors; and (iii) in general, perform all of the duties incident to the office of chief financial officer and such other duties as from time to time may be assigned by the president or by the board of directors. If required by the board of directors, the chief financial officer shall give a bond for the faithful discharge of his or her duties in such sum and with such surety or sureties as the board of directors shall determine. Assistant chief financial officers, if any, shall have the same powers and duties, subject to the supervision of the chief financial officer.
4.6. Salaries. The salaries of the officers shall be fixed from time to time by the board of directors.
ARTICLE 5. INDEMNIFICATION OF DIRECTORS,
OFFICERS, AGENTS AND EMPLOYEES
5.1. Indemnification of Directors and Officers. The corporation shall indemnify any individual made a party to a proceeding because the individual is or was a director or officer of the corporation, against liability incurred in the proceeding, but only if such indemnification is both (i) determined permissible and (ii) authorized, as such are defined in subsection (a) of this section 5.1. (Such indemnification is further
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subject to the limitation specified in subsection 5.1(c).)
5.1.(a) Determination and Authorization. The corporation shall not indemnify a director or officer under this section unless:
(1) a determination has been made in accordance with the procedures set forth in section 16-10a-906(2) of the Act that the director or officer met the standard of conduct set forth in subsection (b) below; and
(2) payment has been authorized in accordance with the procedures set forth in section 16-10a-906(4) of the Act based on a conclusion that the expenses are reasonable, the corporation has the financial ability to make the payment, and the financial resources of the corporation should be devoted to this use rather than some other use by the corporation.
5.1.(b) Standard of Conduct. The individual shall demonstrate that:
(1) his or her conduct was in good faith; and
(2) he or she reasonably believed that his or her conduct was in, or not opposed to, the corporations best interests; and
(3) in the case of any criminal proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful.
5.1.(c) No Indemnification in Certain Circumstances. The corporation shall not indemnify a director or officer under this Section 5.1 of Article 5:
(1) in connection with a proceeding by or in the right of the corporation in which the director or officer was adjudged liable to the corporation; or
(2) in connection with any other proceeding charging that the director or officer derived an improper personal benefit, whether or not involving action in his or her official capacity, in which proceeding he or she was adjudged liable on the basis that he or she derived an improper personal benefit.
5.1.(d) Indemnification in Derivative Actions Limited. Indemnification permitted under this section 5.1 in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.
5.2. Advance of Expenses for Directors and Officers. If a determination is made, following the
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procedures of section 16-10a-906(2) of the Act, that the director or officer has met the following requirements and if an authorization of payment is made following the procedures and standards set forth in section 16-10a-906(4) of the Act, then the corporation shall pay for or reimburse the reasonable expenses incurred by a director or officer who is a party to a proceeding in advance of final disposition of the proceeding, if:
5.2.(a) the director or officer furnishes the corporation a written affirmation of his or her good faith belief that he or she has met the standard of conduct described in section 5.1;
5.2.(b) the director or officer furnishes the corporation a written undertaking, executed personally or on his or her behalf, to repay the advance if it is ultimately determined that he or she did not meet the standard of conduct; and
5.2.(c) a determination is made that the facts then known to those making the determination would not preclude indemnification under section 5.1 of these bylaws or Part 9 of the Act.
5.3. Indemnification of Agents and Employees Who Are Not Directors or Officers. The board of directors may indemnify and advance expenses to any employee or agent of the corporation who is not a director or officer of the corporation to any extent consistent with public policy, as determined by the general or specific actions of the board of directors.
5.4. Insurance. By action of the board of directors, notwithstanding any interest of the directors in such action, the corporation may purchase and maintain liability insurance on behalf of a person who is or was a director, officer, employee, fiduciary or agent of the corporation, against any liability asserted against or incurred by such person in that capacity or arising from such persons status as a director, officer, employee, fiduciary or agent, whether or not the corporation would have the power to indemnify such person under the applicable provisions of the Act.
6.1. Issuance of Shares. The corporation may issue the number of shares of each class or series of capital stock authorized by the articles of incorporation. The issuance or sale by the corporation of any shares of its authorized capital stock of any class shall be made only upon authorization by the board of directors, unless otherwise provided by statute. The board of directors may authorize the issuance of shares for consideration consisting of any tangible or intangible property or benefit to the corporation, including cash, promissory notes, services performed, contracts or arrangements for services to be performed (if such contracts are in writing), or other securities of the corporation. Shares shall be issued for such consideration as shall be fixed from time to time by the board of directors.
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6.2. Certificates for Shares.
6.2.(a) Content. Shares may but need not be represented by certificates in such form as determined by the board of directors and stating on their face, at a minimum, the name of the corporation and that it is formed under the laws of the State of Utah, the name of the person to whom issued, and the number and class of shares and the designation of the series, if any, the certificate represents. Such certificates shall be signed (either manually or by facsimile) by any two officers of the corporation and may be sealed with a corporate seal or a facsimile thereof. If the certificates are signed by facsimile, such certificates must be countersigned by a transfer agent or registered by a registrar, other than the corporation itself or an employee of the corporation. Each certificate for shares shall be consecutively numbered or otherwise identified.
6.2.(b) Legend as to Class or Series. If the corporation is authorized to issue different classes of shares or different series within a class, the designations, relative rights, preferences and limitations applicable to each class and the variations in rights, preferences and limitations determined for each series (and the authority of the board of directors to determine variations for future series) must be summarized on the front or back of each certificate. Alternatively, each certificate may state conspicuously on its front or back that the corporation will furnish the shareholder this information on request in writing and without charge.
6.2.(c) Shareholder List. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation.
6.2.(d) Transferring Shares. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed, or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the corporation as the board of directors may prescribe.
6.3. Shares Without Certificates. The board of directors may authorize the issuance of some or all of the shares of any or all of its classes or series without certificates. Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates under section 6.2 of these bylaws.
6.4. Registration of the Transfer of Shares. Registration of the transfer of shares of the corporation shall be made only on the stock transfer books of the corporation. In order to register a transfer, the record owner shall surrender the shares to the corporation for cancellation, properly endorsed by the appropriate person or persons with reasonable assurances that the endorsements are genuine and effective. Unless the corporation has established a procedure by which a beneficial owner of shares held by a nominee is to be recognized by the corporation as the owner, the person in whose name shares stand in the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.
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7.1. Inspection of Records by Shareholders and Directors. A shareholder or director of a corporation is entitled to inspect and copy, during regular business hours at the corporations principal office, any of the records of the corporation required to be maintained by the corporation under the Act, if such person gives the corporation written notice of the demand at least five business days before the date on which such a person wishes to inspect and copy. The scope of such inspection right shall be as provided under the Act.
7.2. Corporate Seal. The board of directors may provide a corporate seal which may be circular in form and have inscribed thereon any designation including the name of the corporation, the state of incorporation, and the words Corporate Seal.
7.3. Amendments. The corporations board of directors may amend or repeal the corporations bylaws at any time unless:
7.3.(a) the articles of incorporation or the Act reserve this power exclusively to the shareholders in whole or part; or
7.3.(b) the shareholders, in adopting, amending or repealing a particular bylaw, provide expressly that the board of directors may not amend or repeal that bylaw; or
7.3.(c) the bylaw either establishes, amends or deletes a greater shareholder quorum or voting requirement.
Any amendment which changes the voting or quorum requirement for the board must meet the same quorum requirement and be adopted by the same vote and voting groups required to take action under the quorum and voting requirements then in effect or proposed to be adopted, whichever are greater.
7.4. Fiscal Year. The fiscal year of the corporation shall be established by the board of directors.
[End of Bylaws]
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Exhibit 3.2B
BYLAWS OF
Overstock.com, Inc.
(initially adopted on February 27, 2002)
TABLE OF CONTENTS
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ARTICLE I - CORPORATE OFFICES |
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1.1 |
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REGISTERED OFFICE. |
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1.2 |
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OTHER OFFICES. |
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ARTICLE II - MEETINGS OF STOCKHOLDERS |
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2.1 |
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PLACE OF MEETINGS. |
1 |
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2.2 |
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ANNUAL MEETING. |
1 |
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2.3 |
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SPECIAL MEETING. |
1 |
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2.4 |
|
NOTICE OF STOCKHOLDERS MEETINGS. |
2 |
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2.5 |
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MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. |
2 |
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2.6 |
|
QUORUM. |
2 |
|||
2.7 |
|
ADJOURNED MEETING; NOTICE. |
2 |
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2.8 |
|
CONDUCT OF BUSINESS. |
3 |
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2.9 |
|
VOTING. |
3 |
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2.10 |
|
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. |
3 |
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2.11 |
|
RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS. |
3 |
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2.12 |
|
PROXIES. |
4 |
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2.13 |
|
LIST OF STOCKHOLDERS ENTITLED TO VOTE. |
4 |
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ARTICLE III - DIRECTORS |
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|
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3.1 |
|
POWERS. |
5 |
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3.2 |
|
NUMBER OF DIRECTORS. |
5 |
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3.3 |
|
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS. |
5 |
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3.4 |
|
RESIGNATION AND VACANCIES. |
5 |
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3.5 |
|
PLACE OF MEETINGS; MEETINGS BY TELEPHONE. |
6 |
|||
3.6 |
|
REGULAR MEETINGS. |
6 |
|||
3.7 |
|
SPECIAL MEETINGS; NOTICE. |
6 |
|||
3.8 |
|
QUORUM. |
7 |
|||
3.9 |
|
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING. |
7 |
|||
3.10 |
|
FEES AND COMPENSATION OF DIRECTORS. |
7 |
|||
3.11 |
|
APPROVAL OF LOANS TO OFFICERS. |
7 |
|||
3.12 |
|
REMOVAL OF DIRECTORS. |
7 |
|||
|
|
|
|
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ARTICLE IV - COMMITTEES |
|
|||||
|
|
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|
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4.1 |
|
COMMITTEES OF DIRECTORS. |
8 |
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4.2 |
|
COMMITTEE MINUTES. |
8 |
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4.3 |
|
MEETINGS AND ACTION OF COMMITTEES. |
8 |
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|
|
|
|
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ARTICLE V - OFFICERS |
|
|||||
|
|
|
|
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5.1 |
|
OFFICERS. |
9 |
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5.2 |
|
APPOINTMENT OF OFFICERS. |
9 |
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5.3 |
|
SUBORDINATE OFFICERS. |
9 |
|||
5.4 |
|
REMOVAL AND RESIGNATION OF OFFICERS. |
9 |
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i
TABLE OF CONTENTS
(continued)
|
|
|
Page |
5.5 |
|
VACANCIES IN OFFICES. |
9 |
5.6 |
|
CHAIRPERSON OF THE BOARD. |
10 |
5.7 |
|
CHIEF EXECUTIVE OFFICER. |
10 |
5.8 |
|
PRESIDENT. |
10 |
5.9 |
|
VICE PRESIDENTS. |
10 |
5.10 |
|
SECRETARY. |
10 |
5.11 |
|
CHIEF FINANCIAL OFFICER. |
11 |
5.12 |
|
ASSISTANT SECRETARY. |
11 |
5.13 |
|
ASSISTANT TREASURER. |
11 |
5.14 |
|
REPRESENTATION OF SHARES OF OTHER CORPORATIONS. |
12 |
5.15 |
|
AUTHORITY AND DUTIES OF OFFICERS. |
12 |
|
|
|
|
ARTICLE VI - RECORDS AND REPORTS |
|
||
|
|
|
|
6.1 |
|
MAINTENANCE AND INSPECTION OF RECORDS. |
12 |
6.2 |
|
INSPECTION BY DIRECTORS. |
12 |
|
|
|
|
ARTICLE VII - GENERAL MATTERS |
|
||
|
|
|
|
7.1 |
|
CHECKS. |
13 |
7.2 |
|
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS. |
13 |
7.3 |
|
STOCK CERTIFICATES; PARTLY PAID SHARES. |
13 |
7.4 |
|
SPECIAL DESIGNATION ON CERTIFICATES. |
13 |
7.5 |
|
LOST CERTIFICATES. |
14 |
7.6 |
|
CONSTRUCTION; DEFINITIONS. |
14 |
7.7 |
|
DIVIDENDS. |
14 |
7.8 |
|
FISCAL YEAR. |
14 |
7.9 |
|
SEAL. |
14 |
7.10 |
|
TRANSFER OF STOCK. |
15 |
7.11 |
|
STOCK TRANSFER AGREEMENTS. |
15 |
7.12 |
|
REGISTERED STOCKHOLDERS. |
15 |
7.13 |
|
WAIVER OF NOTICE. |
15 |
|
|
|
|
ARTICLE VIII - NOTICE BY ELECTRONIC TRANSMISSION |
|
||
|
|
|
|
8.1 |
|
NOTICE BY ELECTRONIC TRANSMISSION. |
15 |
8.2 |
|
DEFINITION OF ELECTRONIC TRANSMISSION. |
16 |
8.3 |
|
INAPPLICABILITY. |
16 |
|
|
|
|
ARTICLE IX - AMENDMENTS |
|
ii
BYLAWS OF OVERSTOCK.COM
The registered office of Overstock.com, Inc. shall be fixed in the corporations certificate of incorporation, as the same may be amended from time to time.
The corporations Board of Directors (the Board) may at any time establish other offices at any place or places where the corporation is qualified to do business.
Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board. The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the DGCL). In the absence of any such designation or determination, stockholders meetings shall be held at the corporations principal executive office.
The annual meeting of stockholders shall be held each year. The Board shall designate the date and time of the annual meeting. In the absence of such designation the annual meeting of stockholders shall be held on the second Tuesday of May of each year at 10:00 a.m. However, if such day falls on a legal holiday, then the meeting shall be held at the same time and place on the next succeeding business day. At the annual meeting, directors shall be elected and any other proper business may be transacted.
A special meeting of the stockholders may be called at any time by the Board, chairperson of the Board, chief executive officer or president (in the absence of a chief executive officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than 10% of the votes at that meeting.
If any person(s) other than the Board calls a special meeting, the request shall:
The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with the provisions of Sections 0 and 0 of these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this Section 0 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
All notices of meetings of stockholders shall be sent or otherwise given in accordance with either Section 0 or Section 0 of these bylaws not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
Notice of any meeting of stockholders shall be given:
An affidavit of the secretary or an assistant secretary of the corporation or of the transfer agent or any other agent of the corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
The holders of a majority of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.
When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting if the time, place if any thereof, and the means of remote communications if any by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned
2
meeting are announced at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.
The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 0 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as may be otherwise provided in the certificate of incorporation or these bylaws, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder.
Unless otherwise provided in the certificate of incorporation, any action required by the DGCL to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
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 and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the corporation as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall
3
not precede the date on which the resolution fixing the record date is adopted and which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other such action.
If the Board does not so fix a record date:
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
The officer who has charge of the stock ledger of the corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the corporations principal executive office. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
4
Subject to the provisions of the DGCL and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.
The authorized number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one member. No reduction of the authorized number of directors shall have the effect of removing any director before that directors term of office expires.
Except as provided in Section 0 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors. Each director, including a director elected to fill a vacancy, shall hold office until such directors successor is elected and qualified or until such directors earlier death, resignation or removal.
All elections of directors shall be by written ballot, unless otherwise provided in the certificate of incorporation; if authorized by the Board, such requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must be either set forth or be submitted with information from which it can be determined that the electronic transmission authorized by the stockholder or proxy holder.
Any director may resign at any time upon notice given in writing or by electronic transmission to the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these bylaws:
5
If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.
If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.
The Board may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.
Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or any two directors.
Notice of the time and place of special meetings shall be:
directed to each director at that directors address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the corporations records.
6
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the corporations principal executive office) nor the purpose of the meeting.
At all meetings of the Board, a majority of the authorized number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.
The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the Board, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the corporation.
Unless otherwise restricted by statute, the certificate of incorporation or these bylaws, any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
7
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such directors term of office.
The Board may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the corporation,
Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:
(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
8
(ii) special meetings of committees may also be called by resolution of the Board; and
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
The officers of the corporation shall be a president and a secretary. The corporation may also have, at the discretion of the Board, a chairperson of the Board, a vice chairperson of the Board, a chief executive officer, a chief financial officer or treasurer, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
The Board shall appoint the officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 0 and 0 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.
Any vacancy occurring in any office of the corporation shall be filled by the Board or as provided in Section 5.2.
9
The chairperson of the Board, if such an officer be elected, shall, if present, preside at meetings of the Board and exercise and perform such other powers and duties as may from time to time be assigned to him by the Board or as may be prescribed by these bylaws. If there is no chief executive officer or president, then the chairperson of the Board shall also be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these bylaws.
Subject to such supervisory powers, if any, as the Board may give to the chairperson of the Board, the chief executive officer, if any, shall, subject to the control of the Board, have general supervision, direction, and control of the business and affairs of the corporation and shall report directly to the Board. All other officers, officials, employees and agents shall report directly or indirectly to the chief executive officer. The chief executive officer shall see that all orders and resolutions of the Board are carried into effect. The chief executive officer shall serve as chairperson of and preside at all meetings of the stockholders. In the absence of a chairperson of the Board, the chief executive officer shall preside at all meetings of the Board.
In the absence or disability of the chief executive officer, the president shall perform all the duties of the chief executive officer. When acting as the chief executive officer, the president shall have all the powers of, and be subject to all the restrictions upon, the chief executive officer. The president shall have such other powers and perform such other duties as from time to time may be prescribed for him by the Board, these bylaws, the chief executive officer or the chairperson of the Board.
In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the Board or, if not ranked, a vice president designated by the Board, shall perform all the duties of the president. When acting as the president, the appropriate vice president shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board, these bylaws, the chairperson of the Board, the chief executive officer or, in the absence of a chief executive officer, the president.
The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show
10
The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporations transfer agent or registrar, as determined by resolution of the Board, a share register, or a duplicate share register showing;
(i) the names of all stockholders and their addresses;
(ii) the number and classes of shares held by each;
(iii) the number and date of certificates evidencing such shares; and
(iv) the number and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board required to be given by law or by these bylaws. The secretary shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board or by these bylaws.
The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as the Board may designate. The chief financial officer shall disburse the funds of the corporation as may be ordered by the Board, shall render to the chief executive officer or, in the absence of a chief executive officer, the president and directors, whenever they request it, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board or these bylaws.
The chief financial officer shall be the treasurer of the corporation.
The assistant secretary, or, if there is more than one, the assistant secretaries in the order determined by the stockholders or Board (or if there be no such determination, then in the order of their election) shall, in the absence of the secretary or in the event of the secretarys inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.
The assistant treasurer, or, if there is more than one, the assistant treasurers, in the order determined by the stockholders or Board (or if there be no such determination, then in the order of their election), shall, in the absence of the chief financial officer or in the event of the chief financial officers inability or refusal to act,
11
perform the duties and exercise the powers of the chief financial officer and shall perform such other duties and have such other powers as may be prescribed by the Board or these bylaws.
The chairperson of the Board, the president, any vice president, the treasurer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board or the stockholders.
The corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporations stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such persons interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal executive office.
Any director shall have the right to examine the corporations stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.
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From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.
The Board, except as otherwise provided in these bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
The shares of the corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasureror an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has 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 he were such officer, transfer agent or registrar at the date of issue.
The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue
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to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
Except as provided in this Section 7.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owners legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term person includes both a corporation and a natural person.
The Board, subject to any restrictions contained in either (i) the DGCL, or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporations capital stock.
The Board may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.
The fiscal year of the corporation shall be fixed by resolution of the Board and may be changed by the Board.
The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
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Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.
The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
The corporation:
Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the corporation under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent
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shall be revocable by the stockholder by written notice to the corporation. Any such consent shall be deemed revoked if:
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(iv) if by any other form of electronic transmission, when directed to the stockholder.
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
An electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Notice by a form of electronic transmission shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.
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Exhibit 4.2
OVERSTOCK.COM, INC.
6322 South 3000 East, Suite 100
Salt Lake City, Utah 84121
T: (801) 947-3100
F: 801.___.____
INVESTOR RIGHTS AGREEMENT
March 4, 2002
TABLE OF CONTENTS
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Page |
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SECTION 1 Restrictions on Transferability of Securities; Registration Rights |
1 |
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Transfer Restrictions |
1 |
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Requested Registration |
3 |
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Company Registration |
5 |
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Expenses of Registration |
6 |
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Registration on Form S-3 |
7 |
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Registration Procedures |
7 |
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Indemnification |
8 |
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Information by Holder |
10 |
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Limitations on Subsequent Registration Rights |
10 |
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Rule 144 Reporting |
11 |
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Transfer or Assignment of Registration Rights |
11 |
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Market Standoff Agreement |
11 |
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Delay of Registration |
12 |
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Termination of Registration Rights |
12 |
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SECTION 2 Information and Inspection Covenants; Voting Agreement |
12 |
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Company Covenants |
12 |
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Termination of Covenants |
14 |
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14 |
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Right of First Offer |
14 |
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Transfer or Assignment of Rights of First Offer |
16 |
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16 |
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Certain Definitions |
16 |
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Amendment |
18 |
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Notices |
19 |
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Governing Law |
19 |
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Successors and Assigns |
19 |
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Entire Agreement |
20 |
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Delays or Omissions |
20 |
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Severability |
20 |
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Counterparts |
20 |
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Expenses |
20 |
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Severability |
20 |
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Telecopy Execution and Delivery |
20 |
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Jurisdiction; Venue |
21 |
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Jury Trial |
21 |
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Further Assurances |
21 |
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Confidentiality |
21 |
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OVERSTOCK.COM, INC.
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this Agreement) is made as of March 4, 2002, by and among Overstock.com, Inc., a Utah corporation (the Company), the persons and entities listed on the Schedule of Investors attached hereto as Schedule I (each, an Investor and collectively, the Investors), those holders of the Companys Common Stock listed on Schedule II (each, a Common Holder and collectively, the Common Holders), and, for purposes of Sections 1 and 4 only, Eileen Simmons.
Except as otherwise defined herein, capitalized terms have the meanings set forth in Section 4.1 hereof.
WHEREAS: The Investors are parties to the Series A Preferred Stock Purchase Agreement of even date herewith, between the Company and the Investors (the Purchase Agreement), certain of the Companys and the Investors obligations under which are conditioned upon the execution and delivery by such Investors, the Common Holders and the Company of this Agreement; and
WHEREAS: Eileen Simmons is party to a certain agreement dated as of October 27, 1999, by and among the Company, Robert Brazell and the Prior Purchaser (the Simmons Agreement);
WHEREAS: Pursuant to the Simmons Agreement, Eileen Simmons is entitled to certain rights of registration with respect to her shares of Common Stock of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto agree as follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND APPLICABLE LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN INVESTOR RIGHTS AGREEMENT TO WHICH THE ORIGINAL HOLDER OF THESE SHARES WAS PARTY, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
Each Holder consents to the Company making a notation on its records and giving instructions to any transfer agent to implement the restrictions on transfer established in this Agreement.
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The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 1.2:
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The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Section 1.2(d), include other securities of the Company, with respect to which registration rights have been granted, and may include securities of the Company being sold for the account of the Company.
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1.3 Company Registration.
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Notwithstanding any other provision of this Section 1.3, if the underwriter or Holders of a majority of the Registrable Securities advise the Company in writing that marketing factors require an Underwriters Limitation on the number of shares to be underwritten, the Company may (subject to the allocation priority set forth below) limit the number of Registrable Securities to be included in the registration and underwriting. In such event, the Company shall so advise all Holders requesting registration and the number of shares or securities that are entitled to be included in the registration and underwriting shall be allocated in the following manner: First, the number of Registrable Securities that shall be included in the registration and underwriting shall be reduced to the extent required by the Underwriters Limitation, with such reduction being allocated among Holders proposing to include Registrable Securities in such registration in proportion, as nearly as practicable, to the number of shares of Registrable Securities held by each Holder; provided, however, that the number of Registrable Securities to be included in the registration shall not be reduced to less than 30% of the total number of shares included in such registration. If, after reducing the number of Registrable Securities to be included in such registration or underwriting to the full extent permitted in this section, a further reduction in the number of shares to be included in such underwriting and registration is required, then the number of securities of the Company that shall be included in such registration and underwriting shall be reduced to the extent required by the Underwriters Limitation. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriter(s) may round the number of shares allocated to any Holder to the nearest 100 shares.
1.4 Expenses of Registration. All Registration Expenses and reasonable fees of one counsel for the selling shareholders incurred in connection with any registration, qualification or compliance pursuant to Sections 1.2 and 1.3 above and Section 1.5 below shall be borne by the Company; provided, however, that the Company shall not bear expenses of the selling shareholders in excess of $25,000 per registration; provided, further, that that the Company shall not be obligated to pay Registration Expenses and the fees of the one counsel for the selling shareholders for any registration proceeding begun pursuant to Section 1.5, if, in a given twelve-month period, the Company has effected two (2) such registrations in such period. All Selling Expenses relating to securities so registered shall be borne by the holders of such securities pro rata on the basis of the number of shares of securities so registered on their behalf, as shall any other expenses in connection with the registration required to be borne by the Holders of such securities. The Holders shall be required, however, to pay for expenses of any registration proceeding begun pursuant to Section 1.2
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or 1.5, the request of which has been subsequently withdrawn by the Holders holding at least a majority of the Registrable Securities unless such Holders agree to forfeit their right to one requested registration pursuant to Section 1.2 or Section 1.5, as applicable (in which event such right shall be forfeited by all Holders); provided, however, if the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request due to and with reasonable promptness following having learned of such material adverse change, then the Holders shall not be required to pay any of such registration expenses or forfeit such registration rights; provided, further, however, that a change in stock price alone will not be considered a material adverse change for the purposes of this Section 1.4. If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested.
1.6 Registration Procedures. In the case of each registration effected by the Company pursuant to Section 1, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will, as expeditiously as reasonably possible:
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1.7 Indemnification.
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1.8 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 1.
1.9 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of 65% of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights the terms
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of which are more favorable than or senior to the registration rights granted to the Holders hereunder.
1.10 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Restricted Securities to the public without registration, the Company agrees to use its reasonable best efforts to:
1.11 Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted to a Holder by the Company pursuant to this Section 1 may be transferred or assigned by a Holder to a transferee (i) that acquires at least 10% of the shares of the Companys capital stock held by such Holder or (ii) that is (x) any constituent partner, member or shareholder of such Holder if such Holder is a partnership, limited liability company or corporation, (y) a family of such Holder or a trust for the benefit of such Investor, such Holders spouse and/or such Holders issue or (z) any corporation, partnership, limited liability company or other entity of which at least a 75% interest is owned or controlled, directly or indirectly, by one or more of the persons described in (x) or (y) of this Section 1.11, provided, that the Company is given written notice at the time of or within a reasonable time after said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, and, provided, further, that the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Section 1. Notwithstanding the foregoing, or anything to the contrary in this Agreement, the right to transfer registration rights provided in this Section 1.1 will not apply to Eileen Simmons. Notwithstanding any of the foregoing, for a period of one (1) year following the Qualified Public Offering, Otter Capital, LLC (Otter Capital) shall be the deemed owner of any Registrable Securities then owned by Haverford Internet LLC and Patrick M. Byrne for purposes of allocating among Holders the right to include Registrable Securities in a registration pursuant to this Section 1 that is the subject of an Underwriters Limitation and any transferee or assignee of such Registrable Securities owned by Haverford Internet LLC and Patrick M. Byrne shall assume in writing the obligations of such transferor under this Section 1.11.
1.12 Market Standoff Agreement. If requested by the Company and an underwriter of Common Stock (or other securities) of the Company, each Investor shall not sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by such Investor
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(other than those included in the registration) during the 180-day period following the effective date of a registration statement of the Company filed under the Securities Act, provided that (a) such agreement shall only apply to the Companys initial public offering, (b) all officers, directors and affiliates of such officers and directors are bound by and have entered into similar agreements, and (c) such agreement shall not apply to the sale of any shares acquired by a Holder in open market transactions after the date of the final prospectus for such initial public offering. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 1.1(b) hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such 180-day period. Each Holder agrees to execute a market standoff agreement with such underwriters in customary form consistent with the provisions of this Section 1.12. Any discretionary waiver or termination of the above market standoff agreement restrictions by the Company or representatives of the underwriters shall apply to all persons and entities subject to such agreements pro rata based on the number of shares subject to such agreements. The Company agrees to use commercially reasonable efforts to ensure that all shares of its capital stock (upon issuance) shall be subject to a market standoff provision at least as restrictive as set forth above.
1.13 Delay of Registration. No Holder shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.
1.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Section 1.2, Section 1.3 or Section 1.5 above shall terminate (a) on the closing of the Companys Qualified Public Offering, so long as all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any 90-day period, or (b) the earlier of (i) such date after the closing of the Companys initial public offering registered under the Securities Act as all shares of Registrable Securities held or entitled to be held upon conversion by such Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) may immediately be sold under Rule 144(k), and (ii) 5 years after the closing of the Companys initial public offering registered under the Securities Act.
2.1 Company Covenants.
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With respect to the financial statements called for in subsection (ii) of this Section 2.1, the Company shall, concurrent with the delivery of such financial statements, provide an instrument executed by the Chief Financial Officer or President of the Company certifying that such financials were prepared in accordance with generally accepted accounting principals consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by generally accepted accounting principles) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment.
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2.2 Termination of Covenants . The covenants set forth in this Section 2 shall terminate upon and be of no further force and effect upon the earlier to occur of (a) the closing of the Companys Qualified Public Offering or (b) the closing of an Acquisition.
3.1 Right of First Offer. The Company hereby grants to each Investor a right of first offer to purchase a pro rata share of New Securities (as defined in this Section 3.1) which the Company may, from time to time, propose to sell and issue. A Investors pro rata share, for purposes of this Section 3, is the ratio of the number of shares of Common Stock owned by such Investor immediately prior to the issuance of New Securities, assuming full conversion of the Preferred Stock and exercise of any option or warrant held by such Investor, to the total number of shares of Common Stock outstanding immediately prior to the issuance of New Securities, assuming full conversion of the Preferred Stock and exercise of all outstanding convertible securities, rights, options and warrants to acquire Common Stock of the Company. Each Investor shall have a right of over-allotment such that if any Investor fails to exercise its right hereunder to purchase its pro rata share of New Securities, the other Investors may purchase the non-purchasing Investors portion on a pro rata basis within 15 days from the date such non-purchasing Investor fails to exercise its right hereunder to purchase its pro rata share of New Securities. This right of first offer shall be subject to the following provisions:
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3.2 Transfer or Assignment of Rights of First Offer. The rights contained in Section 3 of this Agreement may be transferred or assigned by an Investor to a transferee (i) that acquires at least 10% of the shares of the Companys capital stock held by such Investor or (ii) that is (x) any constituent partner, member or shareholder of such Investor if such Investor is a partnership, limited liability company or corporation, (y) a family of such Investor or a trust for the benefit of such Investor, such Investors spouse and/or such Investors issue or (z) any corporation, partnership, limited liability company or other entity of which at least a 75% interest is owned or controlled, directly or indirectly, by one or more of the persons described in (x) or (y) of this Section 3.2, provided that the Company is given written notice at the time of or within a reasonable time after said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such rights are being transferred or assigned, and, provided further that the transferee or assignee of such rights assumes in writing the obligations of such Investor under this Agreement.
4.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
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4.2 Amendment. Except as provided in Section 1.15 and as otherwise expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the
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Company and the Investors holding a majority of the Registrable Securities (excluding any of such shares that have been sold to the public or pursuant to Rule 144); provided, that Investors purchasing shares in a Closing after the Initial Closing (as that term is defined in the Purchase Agreement) may become parties to this Agreement and be deemed an Investor hereunder without any amendment of this Agreement pursuant to this paragraph or any consent or approval of any other Investor by executing and delivering an additional counterpart signature page to this Agreement; provided, further, that an amendment to the last sentence of Section 1.11 above may be effected by and only by a written instrument signed by the Company, Otter Capital, Haverford Internet LLC and Patrick M. Byrne. Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of all such securities of Holder. Each Holder acknowledges that by the operation of this paragraph, the holders of a majority of the Common Stock issued or issuable upon conversion of the shares issued pursuant to the Purchase Agreement (excluding any of such shares that have been sold to the public or pursuant to Rule 144) will have the right and power to diminish or eliminate all rights of such Investor under this Agreement. In addition, the Company may waive performance of any obligation owing to it other than the market standoff obligations under Section 1.12, as to some or all of the Holders, or agree to accept alternatives to such performance, without obtaining the consent of any Holder. In the event that an underwriting agreement contains terms differing from this Agreement, as to any such Holder the terms of such underwriting agreement shall govern. Notwithstanding the foregoing, any amendment, waiver, or termination of the rights or obligations of the holders of the Common Stock under Section 2.2 shall require the consent of the holders of a majority of the Common Stock held by the Common Holders.
4.3 Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or otherwise delivered by hand or by messenger addressed as follows:
Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer.
4.4 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Utah as applied to agreements entered into among Utah residents to be performed entirely within Utah, without regard to principles of conflicts of law.
4.5 Successors and Assigns. Except as otherwise provided herein, this Agreement, and any and all rights, duties and obligations hereunder, shall not be assigned, transferred, delegated or sublicensed by any Investor without the prior written consent of the Company. Any attempt by an
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Investor without such permission to assign, transfer, delegate or sublicense any rights, duties or obligations that arise under this Agreement shall be void. Subject to the foregoing and except as otherwise provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties.
4.6 Entire Agreement. This Agreement and the exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.
4.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in accordance with Section 4.2 hereof. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.
4.8 Severability. Unless otherwise expressly provided herein, the rights of the Investors hereunder are several rights, not rights jointly held with any of the other Investors. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision, and the parties agree to negotiate, in good faith, a legal and enforceable substitute provision which most nearly effects the parties intent in entering into this Agreement.
4.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.
4.10 Expenses. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.
4.11 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.
4.12 Telecopy Execution and Delivery. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the
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request of any party hereto, all parties hereto agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.
4.13 Jurisdiction; Venue. With respect to any disputes arising out of or related to this Agreement, the parties consent to the exclusive jurisdiction of, and venue in, the state courts in Salt Lake County in the State of Utah (or in the event of exclusive federal jurisdiction, the courts of the District of Utah).
4.14 Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS AGREEMENT.
4.15 Further Assurances. Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.
4.16 Confidentiality. Each Holder acknowledges that the information received by them pursuant to this Agreement may be confidential and for its use only, and it will not use such confidential information in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees or agents having a need to know the contents of such information, and its attorneys), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally or such Holder is required to disclose such information by a governmental authority; provided that Holders may provide summary business, finance and operational information about the Company in their reports to their equity holders as long as such distributed information is accompanied by a statement notifying the recipient of the confidential nature of the information and the restrictions on its use.
(SIGNATURE PAGES FOLLOW)
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written above.
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OVERSTOCK.COM,
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"COMMON HOLDERS" |
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/s/ Patrick Byrne |
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Patrick Byrne |
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HAVERFORD INTERNET LLC |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
IN WITNESS WHEREOF, this Agreement is executed as of the date first written above.
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OVERSTOCK.COM,
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"COMMON HOLDERS" |
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Patrick Byrne |
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HAVERFORD INTERNET LLC |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
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Arran Partners, L.P. |
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/s/ George Wyper |
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Managing Member of Wyper Partners, L.L.C. |
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its General |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
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James R. and Rebecca C. Byrne |
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/s/ James R. Byrne /s/ Rebecca C. Byrne |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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John Byrne |
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/s/ John Byrne |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Terry L. Baxter |
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/s/ Terry L. Baxter |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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C & E Investors LLC |
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/s John L. West |
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MemberJohn L. West |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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CONTEX LTD |
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/s/ Tim Calveley |
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Tim CalveleyAgent for CONTEXT LTD |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Haverford Internet LLC |
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/s/ John Pettway |
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John Pettway, Manager |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Stuart and Tracy Jenkins |
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/s/ Stuart Jenkins /s/ Tracy Jenkins |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Brad Kliber |
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/s/ Brad Kliber |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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David Luban and Judith Lichtenberg |
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/s/ David Luban |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Judith Lichtenberg |
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/s/ Judith Lichtenberg |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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The Gordon S. Macklin Family Trust |
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/s/ Gordon S. Macklin |
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[Signature Page to Overstock.com Inc. Investor Rights Agreement]
"INVESTORS" |
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Otter Capital LLC |
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/s/ John M. Pasquesi |
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