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[DESCRIPTION]FORM S-8As filed with the Securities and Exchange Commission on June 11, 1996 Registration No. 33-___________ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- CALLAWAY GOLF COMPANY (Exact name of Registrant as specified in its charter) 2285 Rutherford Road Carlsbad, California 92008-8815 (Address of principal executive offices) CALIFORNIA 95-3797580 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) --------------------- 1996 STOCK OPTION PLAN (Full title of the plan) DONALD. H. DYE, ESQ. President and Chief Executive Officer 2285 Rutherford Road Carlsbad, California 92008-8815 (619) 931-1771 (Name, address, and telephone number, including area code, of agent for service) CALCULATION OF REGISTRATION FEE (1) Each share of Common Stock includes a Right to purchase one one-thousandth of a share of the Company's Series A Junior Participating Preferred Stock, par value $.01 per share. (2) Estimated solely for purposes of determining the registration fee pursuant to Rule 457(h) and based on the average of the high and low prices of the Common Stock of Callaway Golf Company as reported on June 5, 1996 on the New York Stock Exchange. ================================================================================
- -------------------------------------------------------------------------------- Proposed Proposed Maximum Maximum Title of Amount Offering Aggregate Amount of Securities to be Price Per Offering Registration to be Registered Registered Share (2) Price (2) Fee - -------------------------------------------------------------------------------- Common Stock 2,000,000 $30.19 $60,380,000 $20,820.69 $.01 par value(1) shares(1) - -------------------------------------------------------------------------------- INTRODUCTION This Registration Statement on Form S-8 is filed by Callaway Golf Company (the "Company") relating to 2,000,000 shares of the Company's common stock, par value $.01 per share (the "Common Stock"), issuable to employees of the Company under the Callaway Golf Company 1996 Stock Option Plan (the "Plan"). PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Item 1. Plan Information.* - ---------------------------- Item 2. Registrant Information and Employee Plan Annual Information.* - ----------------------------------------------------------------------- * Information required by Part I of Form S-8 to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933, as amended (the "Securities Act"), and the Note to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. - -------------------------------------------------- The following documents, which previously have been filed by the Company with the Securities and Exchange Commission (the "Commission"), are incorporated herein by reference and made a part hereof: (a) The Company's Annual Report on Form 10-K for the year ended December 31, 1995; (b) The Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996; (c) The description of the Company's Common Stock contained in the Company's Registration Statement on Form S-1 (Registration No. 33-53732), including any amendment or report filed for the purpose of updating such description; and (d) The description of the Company's Rights contained in the Company's Registration Statement on Form 8-A filed on June 27, 1995, including any amendment or report filed for the purpose of updating such description. All documents filed by the Company pursuant to Sections 13(a), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment hereto that indicates that all securities offered hereunder have been sold or that deregisters all securities then remaining unsold shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. For purposes of this Registration Statement, any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated herein by reference modifies or supersedes such statement in such document. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. - ----------------------------------- Not applicable. Item 5. Interests of Named Experts and Counsel. - ------------------------------------------------ Not applicable. Item 6. Indemnification of Directors and Officers. - --------------------------------------------------- Under Section 317 of the California General Corporation Law (the "CGCL"), the Company is, in certain circumstances, permitted to indemnify its directors and officers against certain expenses (including attorneys' fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with threatened, pending or completed civil, criminal, administrative or investigative actions or proceedings (other than an action by or in the right of the Company), by reason of the fact that such persons were or are directors or officers of the Company, if such persons acted in good faith and in a manner they reasonably believed to be in the best interest of the Company, and with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In addition, the Company is in certain circumstances permitted to indemnify its directors and officers who were or are parties or were threatened to be made parties to any threatened, pending or completed action by or in the right of the Company to procure a judgment in its favor by reason of the fact that such persons are or were directors or officers of the Company, against expenses actually and reasonably incurred by such persons in connection with the defense or settlement of the action, if such persons acted in good faith and in a manner they believed to be in the best interests of the Company and its shareholders. As permitted by the CGCL, the Amended and Restated Articles of Incorporation of the Company provide that the Company is authorized to provide indemnification of its officers and directors for breach of duty to the Company and its shareholders through Bylaw provisions or through agreements with the directors or officers, or both, in excess of the indemnification otherwise permitted by Section 317 of the CGCL, subject to the limits on such excess indemnification set forth in Section 204 of the CGCL. Under Section 204(a)(10) of the CGCL, the personal liability of a director for monetary damages in an action brought by or in the right of the corporation for breach of the director's duty to the corporation may be eliminated, except for the liability of a director resulting from acts or omissions involving intentional misconduct or a knowing and culpable violation of the law, acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith, any transaction from which a director derived an improper personal benefit, acts or omissions showing a reckless disregard for the director's duty, acts or omissions constituting an unexcused pattern of inattention to the director's duty, or the making of an illegal distribution to shareholders or an illegal loan or guaranty. As permitted by the CGCL, the Company's Amended and Restated Articles of Incorporation provide that the liability of directors for monetary damages shall be eliminated to the fullest extent permissible under California law. The Company's Bylaws provide that the Company shall indemnify and hold harmless any person who is or was a director or officer of the Company, or is or was serving at the request of the Board of Directors of the Company as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or other persons serving the Company subject to limitations imposed by applicable law, from and against any expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative to the fullest extent permitted by applicable law. The Company's Bylaws further provide that the Company shall advance to such persons expenses incurred in defending any proceeding prior to the final disposition thereof to the fullest extent and in the manner permitted by the law. The Company's Bylaws provide that indemnification provided for in the Bylaws shall not be deemed exclusive of any other rights to which the indemnified party may be entitled and that the Company may purchase and maintain insurance on behalf of an agent of the Company against any liability asserted against him or her or incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the Company would have the power to indemnify him or her against such liabilities under such Bylaws. The Company has entered into Indemnification Agreements with its outside directors. These Indemnification Agreements require the Company to indemnify each outside director if he or she is or was a party or other participant in any suit or proceeding individually or in the right of the Company or any subsidiary of the Company, by reason of (a) the fact that such outside director is or was a director of the Company or any subsidiary, (b) any action or inaction on the part of such outside director while a director of the Company or any subsidiary, and/or (c) the fact that such outside director is or was serving at the request of the Company as a director, officer, employee or agent of another corporation or other enterprise. The indemnification extends to all expenses, liabilities, judgments, fines and amounts paid in settlement actually and reasonably incurred by the outside director in connection with such action, suit or proceeding if the outside director acted in good faith and in a manner he or she reasonably believed to be in the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The Indemnification Agreements require that, to the extent that the outside director has been successful on the merits or otherwise in defense of any such action, suit or proceeding, the Company indemnify such outside director against expenses actually and reasonably incurred by him or her in connection therewith. The Company must further advance, within 30 days of a written request, all expenses incurred by the outside director in connection with the investigation, defense, settlement or appeal of any such action or proceeding; provided, however, that the outside director must repay such amounts advanced if it is ultimately determined that he or she is not entitled to be indemnified by the Company. Under the Indemnification Agreements, the outside directors are permitted to petition the court to seek recovery of amounts due under the Indemnification Agreements and to recover the expenses of seeking such recovery if he or she is successful. The Indemnification Agreements also provide that the Company will indemnify the outside directors to the fullest extent permitted by law. Absent the Indemnification Agreements, indemnification that might be made available to outside directors could be changed by amendments to the Company's Amended and Restated Articles of Incorporation or Bylaws. Benefits under the Indemnification Agreements are not available, however, to indemnify an outside director (a) with respect to proceedings or claims initiated by the outside director that are not by way of defense (unless authorized by the Board of Directors); (b) with respect to liability for transactions from which the outside director derived an improper personal benefit; (c) if the outside director is determined to have committed acts of active and deliberate dishonesty; (d) for expenses or liabilities that have been paid to the outside director under an insurance policy maintained by the Company or otherwise by any other means; or (e) for an accounting of profits realized from the purchase and sale of securities within the meaning of Section 16(b) of the Securities Exchange Act of 1934. Item 7. Exemption from Registration Claimed. - --------------------------------------------- Not applicable. Item 8. Exhibits. - ------------------ Exhibit Number Description -------------- ----------- 4.1 Restated Articles of Incorporation of the Company (filed as an exhibit to the Company's Registration Statement on Form S-8 (No. 33-85692) and incorporated herein by this reference) 4.2 Certificate of Amendment of Articles of Incorporation of the Company, effective February 10, 1995 (filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1994, and incorporated herein by this reference) 4.3 Bylaws of the Company, as amended May 10, 1996 4.4 Certificate of Determination of Rights, Preferences, Privileges and Restrictions of Series A Junior Participating Preferred Stock (filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995, and incorporated herein by this reference) 4.5 Rights Agreement by and between the Company and Chemical Mellon Shareholder Services, as Rights Agent, dated as of June 21, 1995 (filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995, and incorporated herein by this reference) 4.6 Dividend Reinvestment and Stock Purchase Plan (filed as the Prospectus in the Company's Registration Statement on Form S-3 (No. 33-77024) and incorporated herein by this reference) 5 Opinion of Gibson, Dunn & Crutcher LLP as to the legality of the securities being registered 23.1 Consent of Price Waterhouse LLP, independent accountants 23.2 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5 hereto) 24 Power of Attorney (contained on signature page hereto) Item 9. Undertakings. - ---------------------- (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post- effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant 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 of whether such indemnification by it is against public policy as expressed in the Act and will be governed by a final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Carlsbad, State of California, on June 3, 1996. CALLAWAY GOLF COMPANY By: /s/ Donald H. Dye --------------------------------------- Donald H. Dye, Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints DONALD H. DYE, DAVID RANE and STEVEN C. McCRACKEN his true and lawful attorneys-in-fact and agents, each acting alone, with full powers of substitution and resubstitution, for him and in his name, place and stead, at any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, with full powers and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the date indicated. Signature Title Date - --------- ----- ---- /s/ Ely Callaway Director, Chairman of the June 3, 1996 - ------------------------- Board of Directors Ely Callaway /s/ Donald H. Dye Chief Executive Officer, June 3, 1996 - ------------------------- President, Chief Operating Donald H. Dye Officer and Director (Principal Executive Officer) /s/ David Rane Executive Vice President and June 3, 1996 - ------------------------- Chief Financial Officer David Rane (Principal Financial and Accounting Officer) /s/ Frederick R. Port Director and Executive June 3, 1996 - ------------------------- Vice President, International Frederick R. Port Sales, Licensing and Business Development /s/ Michael Sherwin Director June 3, 1996 - ------------------------- Michael Sherwin /s/ William C. Baker Director June 3, 1996 - ------------------------- William C. Baker /s/ Richard Rosenfield Director June 3, 1996 - ------------------------- Richard Rosenfield INDEX TO EXHIBITS ----------------- Sequentially Numbered Exhibit No. Description Page - ----------- ----------- ---- 4.1 Restated Articles of Incorporation of * the Company 4.2 Certificate of Amendment of Articles of * Incorporation of the Company, effective February 10, 1995 4.3 Bylaws of the Company, as amended May 10, 1996 4.4 Certificate of Determination of Rights, * Preferences, Privileges and Restrictions of Series A Junior Participating Preferred Stock 4.5 Rights Agreement by and between the Company * and Chemical Mellon Shareholder Services, as Rights Agent, dated as of June 21, 1995 4.6 Dividend Reinvestment and Stock Purchase Plan * 5 Opinion of Gibson, Dunn & Crutcher LLP as to legality of the securities being registered 23.1 Consent of Price Waterhouse LLP, independent accountants 23.2 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5 hereto) 24 Power of Attorney (contained on signature page hereof) * Incorporated by reference.
BYLAWS
OF
CALLAWAY GOLF COMPANY
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICES. The board of directors shall
fix the location of the principal executive office of the
corporation at any place within or outside the State of
California. If the principal executive office is located outside
this State, and the corporation has one or more business offices
in this State, the board of directors shall fix and designate a
principal business office in the State of California.
Section 2. OTHER OFFICES. The board of directors may at
any time establish branch or subordinate offices at any place or
places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section l. PLACE OF MEETINGS. Meetings of shareholders
shall be held at any place within or outside the State of
California designated by the board of directors. In the absence
of any such designation, shareholders' meetings shall be held at
the principal executive office of the corporation.
Section 2. ANNUAL MEETING.
(a) The annual meeting of shareholders shall be held
each year on a date and at a time designated by the board of
directors. At each annual meeting, directors shall be elected
and any other proper business may be transacted. The date so
designated shall be within five (5) months after the end of the
fiscal year of the corporation and within fifteen (15) months
after the last annual meeting. (Amended June 10, 1995.)
(b) At an annual meeting of shareholders, only such
business shall be conducted, and only such proposals shall be
acted upon, as shall have been brought before the annual meeting
by or at the direction of a majority of the directors or by any
shareholder of the corporation who complies with the notice
procedures set forth in this Section 2(b). For a proposal to be
properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to
the secretary of the corporation. To be timely, a shareholder's
notice must be delivered to, or mailed and received at, the
principal executive offices of the corporation not less than
sixty (60) days nor more than one hundred twenty (120) days prior
to the scheduled annual meeting, regardless of any postponements,
deferrals or adjournments of that meeting to a later date;
provided, however, that if less than seventy (70) days notice or
prior public disclosure of the date of the scheduled annual
meeting is given or made, notice by the shareholder, to be
timely, must be so delivered or received not later than the close
of business on the tenth day following the earlier of the day on
which such notice of the date of the scheduled annual meeting was
mailed or the day on which such public disclosure was made. A
shareholder's notice to the secretary shall set forth as to each
matter the shareholder proposes to bring before the annual
meeting (i) a brief description of the proposal desired to be
brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and address,
as they appear on the corporation's books, of the shareholder
proposing such business and any other shareholders known by such
shareholder to be supporting such proposal, (iii) the class and
number of shares of the corporation's stock which are
beneficially owned by the shareholder on the date of such
shareholder notice and by any other shareholders known by such
shareholder to be supporting such proposal on the date of such
shareholder notice, and (iv) any financial interest of the
shareholder in such proposal. The presiding officer of the
annual meeting shall determine and declare at the annual meeting
whether the shareholder proposal was made in accordance with the
terms of this Section 2(b). If the presiding officer determines
that a shareholder proposal was not made in accordance with the
terms of this Section 2(b), he or she shall so declare at the
annual meeting and any such proposal shall not be acted upon at
the annual meeting. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting
of reports of officers, directors and committees of the board of
directors, but, in connection with such reports, no new business
shall be acted upon at such annual meeting unless stated, filed
and received as herein provided. (Amended June 10, 1995.)
(c) to the rights, if any, of the holders of shares of
Preferred Stock then outstanding, only persons who are nominated
in accordance with the following procedures shall be eligible for
election as directors. Nominations of persons for election to
the board of directors of the corporation may be made at a
meeting of shareholders by or at the direction of the board of
directors, by any nominating committee or person appointed by the
board of directors or by any shareholder of the corporation
entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section
2(c). Such nominations, other than those made by or at the
direction of the board of directors, shall be made pursuant to
timely notice in writing to the secretary of the corporation. To
be timely, a shareholder's notice must be delivered to, or mailed
and received at, the principal executive offices of the
corporation not less than sixty (60) days nor more than one
hundred twenty (120) days prior to the scheduled annual meeting,
regardless of any postponements, deferrals or adjournments of
that meeting to a later date; provided, however, that if less
than seventy (70) days notice or prior public disclosure of the
date of the scheduled annual meeting is given or made, notice by
the shareholder, to be timely, must be so delivered or received
not later than the close of business on the tenth day following
the earlier of the day on which such notice of the date of the
scheduled annual meeting was mailed or the day on which such
public disclosure was made. A shareholder's notice to the
secretary shall set forth (i) as to each person whom the
shareholder proposes to nominate for election or re-election as a
director, (A) the name, age, business address and residence
address of the person, (B) the principal occupation or employment
of the person, (C) the class and number of shares of capital
stock of the corporation which are beneficially owned by the
person, and (D) any other information relating to the person that
is required to be disclosed in solicitations for proxies for
election of directors pursuant to applicable rules and
regulations of the Securities and Exchange Commission promulgated
under the Securities Exchange Act of 1934, as amended; and (ii)
as to the shareholder giving the notice (A) the name and address,
as they appear on the corporation's books, of the shareholder and
(B) the class and number of shares of the corporation's stock
which are beneficially owned by the shareholder on the date of
such shareholder notice. The corporation may require any
proposed nominee to furnish such other information as may
reasonably be required by the corporation to determine the
eligibility of such proposed nominee to serve as director of the
corporation. The presiding officer of the annual meeting shall
determine and declare at the annual meeting whether the
nomination was made in accordance with the terms of this Section
2(c). If the presiding officer determines that a nomination was
not made in accordance with the terms of this Section 2(c), he or
she shall so declare at the annual meeting and any such defective
nomination shall be disregarded. (Amended June 10, 1995.)
Section 3. SPECIAL MEETING.
(a) A special meeting of the shareholders may be
called at any time by the board of directors, or by the chairman
of the board, or by the president, or by one or more shareholders
holding shares in the aggregate entitled to cast not less than
ten percent (10%) of the votes at that meeting.
(b) For a special meeting of shareholders to be
properly called by any person or persons other than the board of
directors, the request must be in writing, specifying the date
and time of such meeting and the information set forth in Section
3(c) hereof, and must be delivered to, or mailed and received by,
the chairman of the board, the president or the secretary of the
corporation not less than thirty-five (35) nor more than sixty
(60) days prior to the date requested for such meeting. The
officer receiving the request shall cause notice to be promptly
given to the shareholders entitled to vote, in accordance with
the provisions of Sections 4 and 5 of this Article II, that a
meeting will be held at the time requested by the person or
persons calling the meeting. If the notice is not given within
twenty (20) days after receipt of the request, the person or
persons requesting the meeting may give the notice. Nothing
contained in this paragraph of this Section 3 shall be construed
as limiting, fixing or affecting the time when a meeting of
shareholders called by action of the board of directors may be
held. (Amended April 28, 1994 and June 10, 1995.)
(c) Any request for a special meeting submitted
pursuant to Section 3(b) hereof shall set forth as to each matter
the shareholder proposes to bring before the special meeting (i)
a brief description of the proposal desired to be brought before
the special meeting and the reasons for conducting such business
at the special meeting, (ii) the name and address, as they appear
on the corporation's books, of the shareholder proposing such
business and any other shareholders known by such shareholder to
be supporting such proposal, (iii) the class and number of shares
of the corporation's stock which are beneficially owned by the
shareholder on the date of such shareholder request and by any
other shareholders known by such shareholder to be supporting
such proposal on the date of such shareholder request, and (iv)
any financial interest of the shareholder in such proposal. In
addition to whatever other limitations are imposed by applicable
law, no person may be nominated for election to the board of
directors of the corporation by any of the person or persons
making a request for a special meeting pursuant to Section 3(b)
hereof unless the request sets forth as to each person whom the
requesting person or persons propose to nominate for election as
a director, (A) the name, age, business address and residence
address of the person, (B) the principal occupation or employment
of the person, (C) the class and number of shares of capital
stock of the corporation which are beneficially owned by the
person, and (D) any other information relating to the person that
is required to be disclosed in solicitations for proxies for
election of directors pursuant to applicable rules and
regulations of the Securities and Exchange Commission promulgated
under the Securities Exchange Act of 1934, as amended. (Amended
April 28, 1994 and June 10, 1995.)
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices
of meetings of shareholders shall be sent or otherwise given in
accordance with Section 5 of this Article II not less than ten
(10) nor more than (60) days before the date of the meeting. The
notice shall specify the place, date and hour of the meeting and
(i) in the case of a special meeting, the general nature of the
business to be transacted, or (ii) in the case of the annual
meeting, those matters which the board of directors, at the time
of giving the notice, intends to present for action by the
shareholders. The notice of any meeting at which directors are
to be elected shall include the name of any nominee or nominees
whom, at the time of the notice, management intends to present
for election.
If action is proposed to be taken at any meeting for approval of
(i) a contract or transaction in which a director has a direct or
indirect financial interest, pursuant to Section 310 of the
Corporations Code of California, (ii) an amendment of the
articles of incorporation, pursuant to Section 902 of that Code,
(iii) a reorganization of the corporation, pursuant to
Section 1201 of that Code, (iv) a voluntary dissolution of the
corporation pursuant to Section 1900 of that Code, or (v) a
distribution in dissolution other than in accordance with the
rights of outstanding preferred shares, pursuant to Section 2007
of that Code, the notice shall also state the general nature of
that proposal.
Section 5. MANNER OF GIVING NOTICE: AFFIDAVIT OF NOTICE.
Notice of any meeting of shareholders shall be given either
personally or by first-class mail or telegraphic or other written
communication, charges prepaid, addressed to the shareholder at
the address of that shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for
the purpose of notice. If no such address appears on the
corporation's books or is given, notice shall be deemed to have
been given if sent to that shareholder by first-class mail or
telegraphic or other written communication to the corporation's
principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office
is located. Notice shall be deemed to have been given at the
time when delivered personally or deposited in the mail or sent
by telegram or other means of written communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the corporation is returned
to the corporation by the United States Postal Service marked to
indicate that the United States Postal Service is unable to
deliver the notice to the shareholder at that address, all future
notices or reports shall be deemed to have been duly given
without further mailing if these shall be available to the
shareholder on written demand of the shareholder at the principal
executive office of the corporation for a period of one year from
the date of the giving of the notice.
An affidavit of the mailing or other means of giving any notice
of any shareholders' meeting shall be executed by the secretary,
assistant secretary, or any transfer agent of the corporation
giving the notice, and shall be filed and maintained in the
minute book of the corporation.
Section 6. QUORUM. The presence in person or by proxy of
the holders of a majority of the shares entitled to vote at any
meeting of shareholders shall constitute a quorum for the
transaction of business. The shareholders present at a duly
called or held meeting at which a quorum is present may continue
to do business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority
of the shares required to constitute a quorum.
Section 7. ADJOURNED MEETING: NOTICE. Any shareholders'
meeting, annual or special, whether or not a quorum is present,
may be adjourned from time to time by the vote of the majority of
the shares represented at that meeting, either in person or by
proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 6 of
this Article II.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of
the adjourned meeting if the time and place are announced at a
meeting at which that adjournment is taken, unless a new record
date for the adjourned meeting is fixed, or unless the
adjournment is for more than forty-five (45) days from the date
for the original meeting, in which case the board of directors
shall set a new record date. Notice of any such adjourned
meeting shall be given to each shareholder of record entitled to
vote at the adjourned meeting in accordance with the provisions
of Sections 4 and 5 of this Article II. At any adjourned meeting
the corporation may transact any business which might have been
transacted at the original meeting.
Section 8. VOTING. The shareholders entitled to vote at
any meeting of shareholders shall be determined in accordance
with the provisions of Section 11 of this Article II, subject to
the provisions of Sections 702 to 704, inclusive, of the
Corporations Code of California (relating to voting shares held
by a fiduciary, in the name of a corporation, or in joint
ownership). The shareholders' vote may be by voice vote or by
ballot; provided, however, that any election of directors must be
by ballot if demanded by any shareholder before the voting has
begun. On any matter other than elections of directors, any
shareholder may vote part of the shares in favor of the proposal
and refrain from voting the remaining shares or vote them against
the proposal, but, if the shareholder fails to specify the number
of shares which the shareholder is voting affirmative, it will be
conclusively presumed that the shareholder's approval is with
respect to all shares that the shareholder is entitled to vote.
If a quorum is present, the affirmative vote of the majority of
the shares represented at the meeting and entitled to vote on any
matter (other than the election of directors) shall be the act of
the shareholders, unless the vote of a greater number or voting
by classes is required by California General Corporation Law or
by the articles of incorporation.
At a shareholders' meeting at which directors are to be elected,
no shareholder shall be entitled to cumulate votes (i.e., cast
for any one or more candidates a number of votes greater than the
number of the shareholders' shares) unless the candidates' names
have been placed in nomination prior to commencement of the
voting and a shareholder has given notice prior to commencement
of the voting of the shareholder's intention to cumulate votes.
If any shareholder has given such notice, than every shareholder
entitled to vote may cumulate votes for candidates in nomination
and give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of votes to
which that shareholder's shares are entitled, or distribute the
shareholder's votes on the same principle among any or all of the
candidates, as the shareholder thinks fit. The candidates
receiving the highest number of votes, up to the number of
directors to be elected, shall be elected.
Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT
SHAREHOLDERS. The transactions of any meeting of shareholders,
either annual or special, however called or noticed, and wherever
held, shall be as valid as though had at a meeting duly held
after regular call and notice, if a quorum be present either in
person or by proxy and if, either before or after the meeting,
each person entitled to vote, who was not present in person or by
proxy, signs a written waiver of notice or a consent to a holding
of the meeting, or an approval of the minutes. The waiver of
notice or consent need not specify either the business to be
transacted or the purpose of any annual or special meeting of
shareholders, except that if action is taken or proposed to be
taken for approval of any of those matters specified in the
second paragraph of Section 4 of this Article II, the waiver of
notice or consent shall state the general nature of the proposal.
All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Attendance by a person at a meeting shall also constitute a
waiver of notice of that meeting, except when the person objects,
at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened,
and except that attendance at a meeting is not a waiver of any
right to object to the consideration of matters not included in
the notice of the meeting if that objection is expressly made at
the meeting. (Amended April 28, 1994.)
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING. Any action which may be taken at any annual or special
meeting of shareholders may be taken without a meeting and
without prior notice, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares
having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which
all shares entitled to vote on that action were present and
voted. In the case of election of directors, such a consent
shall be effective only if signed by the holders of all
outstanding shares entitled to vote for the election of
directors; provided, however, that a director may be elected at
any time to fill a vacancy on the board of directors that has not
been filled by the directors, by the written consent of the
holders of a majority of the outstanding shares entitled to vote
for the election of directors. All such consents shall be filed
with the secretary of the corporation and shall be maintained in
the corporate records. Any shareholder giving a written consent,
or the shareholder's proxy holders, may revoke the consent by a
writing received by the secretary of the corporation before
written consents of the number of shares required to authorize
the proposed action have been filed with the secretary.
If the consents of all shareholders entitled to vote have not
been solicited in writing, and if the unanimous written consent
of all such shareholders shall not have been received, the
secretary shall give prompt notice of the corporate action
approved by the shareholders without a meeting. This notice
shall be given in the manner specified in Section 5 of this
Article II. In the case of approval of (i) contracts or
transactions in which a director has a direct or indirect
financial interest, pursuant to Section 310 of the Corporations
Code of California, (ii) indemnification of agents of the
corporation, pursuant to Section 317 of that Code, (iii) a
reorganization of the corporation, pursuant to Section 1201 of
that Code, and (iv) a distribution in dissolution other than in
accordance with the rights of outstanding preferred shares,
pursuant to Section 2007 of that Code, the notice shall be given
at least ten (10) days before the consummation of any action
authorized by that approval.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND
GIVING CONSENTS. For purposes of determining the shareholders
entitled to notice of any meeting or to vote or entitled to give
consent to corporate action without a meeting, the board of
directors may fix, in advance, a record date, which shall not be
more than sixty (60) days nor less than ten (10) days before the
date of any such meeting, nor more than sixty (60) days before
any such action without a meeting and in this event only
shareholders of record on the date so fixed are entitled to
notice and to vote or to give consents, as the case may be,
notwithstanding any transfer of any shares on the books of the
corporation after the record date, except as otherwise provided
in the California General Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders
shall be at the close of business on the business day next
preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next
preceding the day on which the meeting is held.
(b) The record date for determining shareholders
entitled to give consent to corporate action in writing without a
meeting, (i) when no prior action by the board has been taken,
shall be the day on which the first written consent is given, or
(ii) when prior action of the board has been taken, shall be at
the close of business on the day on which the board adopts the
resolution relating to that action, or the sixtieth (60th) day
before the date of such other action, whichever is later.
Section 12. PROXIES. Every person entitled to vote for
directors or any other matter shall have the right to do so
either in person or by one or more agents authorized by a written
proxy signed by the person and filed with the secretary of the
corporation. A proxy shall be deemed signed if the shareholder's
name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the
shareholder or the shareholder's attorney in fact. A validly
executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the
person executing it, before the vote pursuant to that proxy, by a
writing delivered to the corporation stating that the proxy is
revoked, or by a subsequent proxy executed by, or attendance at
the meeting and voting in person by, the person executing the
proxy; or (ii) written notice of the death or incapacity of the
maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that
no proxy shall be valid after the expiration of eleven (11)
months from the date of the proxy, unless otherwise provided in
the proxy. The revocability of a proxy that states on its face
that it is irrevocable shall be governed by the provisions of
Sections 705(e) and 705(f) of the Corporations Code of
California.
Section 13. INSPECTORS OF ELECTION. Before any meeting of
shareholders, the board of directors may appoint any persons
other than nominees for office to act as inspectors of election
at the meeting or its adjournment. If no inspectors of election
are so appointed, the chairman of the meeting may, and on the
request of any shareholder or a shareholder's proxy shall,
appoint inspectors of the election at the meeting. The number of
inspectors shall be either one (1) or three (3). If inspectors
are appointed at a meeting on the request of one or more
shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether one
(l) or three (3) inspectors are to be appointed. If any person
appointed as inspector fails to appear or fails to or refuses to
act, the chairman of the meeting may, and upon the request of any
shareholder or a shareholder's proxy shall, appoint a person to
fill that vacancy.
These inspectors shall:
(a) Determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect
of proxies;
(b) Receive votes, ballots, or consents;
(c) Hear and determine all challenges and questions in
any way arising in connection with the right to vote;
(d) Count and tabulate all votes or consent;
(e) Determine when the polls shall close;
(f) Determine the result; and
(g) Do any other acts that may be proper to conduct
the election or vote with fairness to all shareholders.
ARTICLE III
DIRECTORS
Section 1. POWERS. Subject to the provisions of the
California General Corporation Law and any limitations in the
articles of incorporation and these bylaws relating to action
required to be approved by the shareholders or by the outstanding
shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under
the direction of the board of directors.
Section 2. NUMBER AND QUALIFICATION OF DIRECTORS. The
board of directors shall consist of not less than six (6) nor
more than eleven (11) directors, with the exact number within
that range to be fixed by resolution of the board of directors
from time to time. (Amended September 28, 1984; November 30,
1987; January 6, 1989; April 2, 1990; and April 28, 1994.)
Section 3. ELECTION AND TERM OF OFFICE OF DIRECTORS.
Directors shall be elected at each annual meeting of the
shareholders to hold office until the next annual meeting. Each
director, including a director elected to fill a vacancy, shall
hold office until the expiration of the term for which elected
and until a successor has been elected and qualified.
Section 4. VACANCIES. Vacancies in the board of directors
may be filled by a majority of the remaining directors though
less than a quorum, or by a sole remaining director, except that
a vacancy created by the removal of a director by the vote or
written consent of the shareholders or by court order may be
filled only by the vote of a majority of the shares entitled to
vote represented at a duly held meeting at which a quorum is
present, or by the written consent of holders of a majority of
the outstanding shares entitled to vote. Each director so
elected shall hold office until the next annual meeting of the
shareholders and until a successor has been elected and
qualified.
A vacancy or vacancies in the board of directors shall be deemed
to exist in the event of the death, resignation, or removal of
any director, or if the board of directors by resolution declares
vacant the office of a director who has been declared of unsound
mind by an order of court or convicted of a felony, or if the
authorized number of directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any
director or directors are elected, to elect the number of
directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors, but
any such election by written consent shall require the consent of
the outstanding shares entitled to vote.
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary, or the board
of directors, unless the notice specified a later time for that
resignation to become effective. If the resignation of a
director is effective at a future time, the board of directors
may elect a successor to take office when the resignation becomes
effective.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of
office expires.
Section 5. PLACE OF MEETINGS AND MEETINGS BY TELEPHONE.
Regular meetings of the board of directors may be held at any
place within or outside the State of California that has been
designated from time to time by resolution of the board. In the
absence of such a designation, regular meetings shall be held at
the principal executive office of the corporation. Special
meetings of the board shall be held at any place within or
outside the State of California that has been designated in the
notice of the meeting or, if not stated in the notice or there is
no notice, at the principal executive office of the corporation.
Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all
directors participating in the meeting can hear one another, and
all such directors shall be deemed to be present in person at the
meeting.
Section 6. ANNUAL MEETING. Immediately following each
annual meeting of shareholders, the board of directors shall hold
a regular meeting for the purpose of organization, any desired
election of officers, and the transaction of other business.
Notice of this meeting shall not be required.
Section 7. OTHER REGULAR MEETINGS. Other regular meetings
of the board of directors shall be held without call at such time
as shall from time to time be fixed by the board of directors.
Such regular meetings may be held without notice.
Section 8. SPECIAL MEETINGS. Special meetings of the board
of directors for any purpose or purposes may be called at any
time by the chairman of the board or the president or the
secretary or any two directors.
Notice of the time and place of special meetings shall be
delivered personally or by telephone to each director or sent by
first-class mail or telegram, charges prepaid, addressed to each
directors' address as it is shown on the records of the
corporation. In case the notice is mailed, it shall be deposited
in the United States mail at least four (4) days before the time
of the holding of the meeting. In case the notice is delivered
personally or by telephone or telegram, it shall be delivered
personally or by telephone or to the telegraph company at least
forty-eight (48) hours before the time of the holding of the
meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office
of the director who the person giving the notice has reason to
believe will promptly communicate it to the director. The notice
need not specify the purpose of the meeting nor the place if the
meeting is to be held at the principal executive office of the
corporation.
Section 9. QUORUM. A majority of the number of directors
authorized shall constitute a quorum for the transaction of
business, except to adjourn as provided in Section 11 of this
Article III. Every act or decision done or made by a majority of
the directors present shall be regarded as the act of the board
of directors, subject to the provisions of Section 310 of the
Corporations Code of California (as to approval of contracts or
transactions in which a director has a direct or indirect
material financial interest), or Section 317 of that Code (as to
indemnification of directors). A meeting at which a quorum is
initially present may continue to transact business
notwithstanding the withdrawal of directors, if any action taken
is approved by at least a majority of the required quorum for
that meeting. (Amended March 17, 1985; November 30, 1987;
January 28, 1989; and April 28, 1994.)
Section 10. WAIVER OF NOTICE. The transactions of any
meeting of the board of directors, however called and noticed or
wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice if a quorum is present and if,
either before or after the meeting, each of the directors not
present signs a written waiver of notice, a consent to holding
the meeting or an approval of the minutes. The waiver of notice
or consent need not specify the purpose of the meeting. All such
waivers, consents, and approvals shall be filed with the
corporate records or made a part of the minutes of the meeting.
Notice of a meeting shall also be deemed given to any director
who attends the meeting, without protesting before or at its
commencement, the lack of notice to that director.
Section 11. ADJOURNMENT. A majority of the directors
present, whether or not constituting a quorum, may adjourn any
meeting to another time and place.
Section 12. NOTICE OF ADJOURNMENT. Notice of the time and
place of holding an adjourned meeting need not be given, unless
the meeting is adjourned for more than twenty-four (24) hours, in
which case notice of the time and place shall be given before the
time of the adjourned meeting, in the manner specified in
Section 8 of this Article III, to the directors who were not
present at the time of the adjournment.
Section 13. ACTION WITHOUT MEETING. Any action required or
permitted to be taken by the board of directors may be taken
without a meeting, if all members of the board shall individually
or collectively consent in writing to that action. Such action
by written consent shall have the same force and effect as a
unanimous vote of the board of directors. Such written consent
or consents shall be filed with the minutes of the proceedings of
the board.
Section 14. FEES AND COMPENSATION OF DIRECTORS. Directors
and members of committees may receive such compensation, if any,
for their services, and such reimbursement of expenses, as may be
fixed or determined by resolution of the board of directors.
This Section 14 shall not be construed to preclude any director
from serving the corporation in any other capacity as an officer,
agent, employee, or otherwise, and receiving compensation for
those services.
ARTICLE IV
COMMITTEES
Section 1. COMMITTEES OF DIRECTORS. The board of directors
may, by resolution adopted by a majority of the authorized number
of directors, designate one or more committees, each consisting
of two or more directors, to serve at the pleasure of the board.
The board may designate one or more directors as alternate
members of any committee, who may replace any absent member at
any meeting of the committee. Any committee, to the extent
provided in the resolution of the board, shall have all the
authority of the board, except with respect to:
(a) The approval of any action which, under the
General Corporation Law of California, also requires
shareholders' approval or approval of the outstanding shares;
(b) The filling of vacancies on the board of directors
or in any committee;
(c) The fixing of compensation of the directors for
serving on the board or on any committee;
(d) The amendment or repeal of bylaws or the adoption
of new bylaws;
(e) The amendment or repeal of any resolution of the
board of directors which by its express terms is not amendable or
repealable;
(f) A distribution to the shareholders of the
corporation, except at a rate or in a periodic amount or within a
price range determined by the board of directors; or
(g) The appointment of any other committees of the
board of directors or the members of these committees.
Section 2. MEETINGS AND ACTION OF COMMITTEES. Meetings and
action of committees shall be governed by, and held and taken in
accordance with the provisions of Article III of these bylaws,
Sections 5 (place of meetings), 7 (regular meetings), 8 (special
meetings and notice), 9 (quorum), 10 (waiver of notice), 11
(adjournment), 12 (notice of adjournment), and 13 (action without
meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the
board of directors and its members, except that the time of
regular meetings of committees may be determined either by
resolution of the board of directors or by resolution of the
committee; special meetings of committees may also be called by
resolution of the board of directors; and notice of special
meetings of committees shall also be given to all alternate
members who shall have the right to attend all meetings of the
committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions
of these bylaws.
ARTICLE V
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall
be a chief executive officer, president, secretary, and a chief
financial officer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board,
one or more vice presidents, one or more assistant secretaries,
one or more assistant treasurers, and such other officers as may
be appointed in accordance with the provisions of Section 3 of
this Article V. Any number of offices may be held by the same
person (Amended May 10, 1996).
Section 2. ELECTION OF OFFICERS. The officers of the
corporation, except such officers as may be appointed in
accordance with the provisions of Section 3 or Section 5 of this
Article V, shall be chosen by the board of directors, and each
shall serve at the pleasure of the board, subject to the rights,
if any, of an officer under any contract of employment.
Section 3. SUBORDINATE OFFICERS. The board of directors
may appoint, and may empower the chief executive officer to
appoint, such other officers as the business of the corporation
may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in the
bylaws as the board of directors may from time to time determine
(Amended May 10, 1996).
Section 4. REMOVAL AND RESIGNATION OF OFFICERS. Subject to
the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without
cause, by the board of directors, at any regular or special
meeting of the board, or, except in case of an officer chosen by
the board of directors, by any officer upon whom such power of
removal may be conferred by the board of directors.
Section 5. VACANCIES IN OFFICES. A vacancy in any office
because of death, resignation, removal, disqualification or any
other cause shall be filled in the manner prescribed in these
bylaws for regular appointments to that office.
Section 6. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The
chairman of the board shall preside at meetings of the board of
directors and shareholders and shall exercise and perform such
other powers and duties as may from time to time be assigned to
the chairman by the board of directors or prescribed by the
bylaws. In the absence (unavailability) of the chairman of the
board, the vice chairman of the board shall act as chairman with
all powers attendant thereto (Amended September 28, 1984, April
28, 1994 and May 10, 1996).
Section 7. CHIEF EXECUTIVE OFFICER. Unless the board of
directors shall otherwise determine, the chief executive officer
of the corporation shall, subject to the control of the board of
directors, have general supervision, direction, and control of
the business and the officers of the corporation (Amended May 10,
1996).
Section 8. PRESIDENT. Subject to such supervisory powers
as may be given by the board of directors to the chief executive
officer, and unless the board of directors shall otherwise
determine, the president shall be chief operating officer in
charge of the day-to-day operations of the corporation as they
relate to sales and production of the corporation's products
(Amended September 28, 1984 and May 10, 1996).
Section 9. VICE PRESIDENTS. In the absence or disability
of the president, the vice presidents, if any, in order of their
rank as fixed by the board of directors or, if not ranked, as
otherwise designated by the board of directors, shall perform all
the duties of the president, and when so acting shall have all
powers of, and be subject to all the restrictions upon, the
president. The vice presidents shall have such other powers and
perform such other duties as from time to time may be prescribed
for them respectively by the board of directors or the bylaws,
and the president, or the chairman of the board.
Section 10. SECRETARY. The secretary shall keep or cause
to be kept, at the principal executive office or such other place
as the board of directors may direct, a book of minutes of all
meetings and actions of directors, committees of directors, and
shareholders, with the time and place of holding, whether regular
or special, and, if special, how authorized, the notice given,
the names of those present at directors' meetings or committee
meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings.
The secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer
agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register,
showing the names of all shareholders and their addresses, the
number of and classes of shares held by each, the number and date
of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all
meetings of the shareholders and of the board of directors
required by the bylaws or by law to be given, and shall keep the
seal of the corporation if one be adopted, in safe custody, and
shall have such other powers and perform such other duties as may
be prescribed by the board of directors or by the bylaws.
Section 11. CHIEF FINANCIAL OFFICER. The chief financial
officer shall keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of
the properties and business transactions of the corporation
including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings, and
shares. The books of account shall at all reasonable times be
open to inspection by any director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with
such depositories as may be designated by the board of directors,
shall disburse the funds of the corporation as may be ordered by
the board of directors, shall render to the president and
directors, whenever they request it, an account of all
transactions effected by the 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 of directors or the bylaws.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES AND OTHER AGENTS
(Amended April 28, 1994)
Section 1. INDEMNIFICATION. This corporation shall
indemnify and hold harmless any person who is or was a director
or officer of this corporation, or is or was serving at the
request of the Board of Directors of this corporation as a
director or officer of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, from and
against any expenses, judgments, fines, settlements, and other
amounts actually and reasonably incurred in connection with any
"proceeding" (as defined in Section 317(a) of the California
General Corporation Law) to the fullest extent permitted by
applicable law. The corporation shall advance to such persons
expenses incurred in defending any proceeding prior to the final
disposition thereof to the fullest extent and in the manner
permitted by applicable law.
Section 2. RIGHT TO INDEMNIFICATION. This section shall
create a right of indemnification for each person referred to in
Section 1 of this Article VI, whether or not the proceeding to
which the indemnification relates arose in whole or in part prior
to adoption of such section and in the event of death such right
shall extend to such person's legal representatives. The right
of indemnification hereby given shall not be exclusive of any
other rights such person may have whether by law or under any
agreement, insurance policy, vote of directors or shareholders,
or otherwise.
Section 3. INSURANCE. The corporation shall have power to
purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by
the agent in such capacity or arising out of the agent's status
as such whether or not the corporation would have the power to
indemnify the agent against such liability.
Section 4. INDEMNIFICATION OF OTHER PERSONS. The
corporation may indemnify other persons serving the corporation
subject to limitations imposed by applicable law.
ARTICLE VII
RECORDS AND REPORTS
Section 1. MAINTENANCE AND INSPECTION OF SHARE REGISTER.
The corporation shall keep at its principal executive office, or
at the office of its transfer agent or registrar, if either be
appointed and as determined by resolution of the board of
directors, a record of its shareholders, giving the names and
addresses of all shareholders and the number and class of shares
held by each shareholder.
A shareholder or shareholders of the corporation shall have the
right to inspect the share register as provided in Section 1600
of the Corporations Code of California.
Section 2. MAINTENANCE AND INSPECTION OF BYLAWS. The
corporation shall keep at its principal executive office, or if
its principal executive office is not in the State of California,
at its principal business office in this State, the original or a
copy of the bylaws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during
office hours. If the principal executive office of the
corporation is outside the State of California and the
corporation has no principal business office in this State, the
Secretary shall, upon the written request of any shareholder,
furnish to that shareholder a copy of the bylaws as amended to
date.
Section 3. MAINTENANCE AND INSPECTION OF OTHER CORPORATE
RECORDS. The accounting books and records and minutes of
proceedings of the shareholders and the board of directors and
any committee or committees of the board of directors shall be
kept at such place or places designated by the board of
directors, or, in the absence of such designation, at the
principal executive office of the corporation. The minutes shall
be kept in written form and the accounting books and records
shall be kept either in written form or in any other form capable
of being converted into written form. The minutes and accounting
books and records shall be open to inspection upon the written
demand of any shareholder or holder of a voting trust
certificate, at any reasonable time during usual business hours,
for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The
inspection may be made in person or by an agent or attorney, and
shall include the right to copy and make extracts. These rights
of inspection shall extend to the records of such subsidiary
corporation of the corporation.
Section 4. INSPECTION BY DIRECTORS. Every director shall
have the absolute right at any reasonable time to inspect all
books, records, and documents of every kind and the physical
properties of the corporation and each of its subsidiary
corporations. This inspection by a director may be made in
person or by an agent or attorney and the right of inspection
includes the right to copy and make extracts of documents.
Section 5. ANNUAL REPORT TO SHAREHOLDERS. (Deleted April
28, 1994 by amendment.)
Section 6. ANNUAL STATEMENT OF GENERAL INFORMATION. The
corporation shall, during the period commencing April l and
ending on September 30 in each year, file with the Secretary of
State of California, on the prescribed form, a statement setting
forth the authorized number of directors, the names and complete
business or residence addresses of all incumbent directors, the
names and complete business or residence addresses of the chief
executive officer, secretary, and chief financial officer, the
street address of its principal executive office or principal
business office in this State, and the general type of business
constituting the principal business activity of the corporation,
together with a designation of the agent of the corporation for
the purpose of service of process, all in compliance with
Section 1502 of the Corporations Code of California.
ARTICLE VIII
GENERAL CORPORATE MATTERS
Section 1. RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND
VOTING. For purposes of determining the shareholders entitled to
receive payment of any dividend or other distribution or
allotment of any rights or entitled to exercise any rights in
respect of any other lawful action (other than action by
shareholders by written consent without a meeting), the board of
directors may fix, in advance, a record date, which shall not be
more than sixty (60) days before any such action, and in that
case only shareholders of record on the date so fixed are
entitled to receive the dividend, distribution, or allotment of
rights or to exercise the rights, as the case may be,
notwithstanding any transfer of any shares on the books of the
corporation after the record date so fixed, except as otherwise
provided in the California General Corporation Law.
If the board of directors does not so fix a record date, the
record date for determining shareholders for any such purpose
shall be at the close of business on the date on which the board
adopts the applicable resolution or the sixtieth (60th) day
before the date of that action, whichever is later.
Section 2. CHECKS, DRAFTS, EVIDENCES OF INDEBTEDNESS. All
checks, drafts, or other orders for payment of money, notes, or
other evidences of indebtedness, issued in the name of or payable
to the corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be
determined by resolution of the board of directors.
Section 3. CORPORATE CONTRACTS AND INSTRUMENTS: HOW
EXECUTED. The board of directors, except as otherwise provided
in these bylaws, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in
the name of and on behalf of the corporation and this authority
may be general or confined to specific instances; and, unless so
authorized or ratified by the board of directors or within the
agency power of an officer, no officer, agent, or employee shall
have any power or authority to bind the corporation by any
contract or engagement or to pledge its credit or to render it
liable for any purpose or for any amount.
Section 4. CERTIFICATES FOR SHARES. A certificate or
certificates for shares of the capital stock of the corporation
shall be issued to each shareholder when any of these shares are
fully paid, and the board of directors may authorize the issuance
of certificates or shares as partly paid provided that these
certificates shall state the amount of the consideration to be
paid for them and the amount paid. All certificates shall be
signed in the name of the corporation by the chairman of the
board or vice chairman of the board or the president or vice
president and by the chief financial officer or an assistant
treasurer or the secretary or any assistant secretary, certifying
the number of shares and the class or series of shares owned by
the shareholder. Any or all of the signatures on the certificate
may be facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been
placed on a certificate shall have ceased to be that officer,
transfer agent, or registrar before that certificate is issued,
it may be issued by the corporation with the same effect as if
that person were an officer, transfer agent, or registrar at the
date of issue.
Section 5. LOST CERTIFICATES. Except as provided in this
Section 5, no new certificates for shares shall be issued to
replace an old certificate unless the latter is surrendered to
the corporation and cancelled at the same time. The board of
directors may, in case any share certificate or certificate for
any security is lost, stolen, or destroyed, authorize the
issuance of a replacement certificate on such terms and
conditions as the board may require, including provision for
indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against
any claim that may be made against it, including any expense or
liability, on account of the alleged loss, theft, or destruction
of the certificate or the issuance of the replacement
certificate.
Section 6. CONSTRUCTION AND DEFINITIONS. Unless the
context requires otherwise, the general provisions, rules of
construction, and definitions in the California General
Corporation Law 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 corporate and
natural person.
ARTICLE IX
AMENDMENTS
Section 1. AMENDMENT BY SHAREHOLDERS. New bylaws may be
adopted or these bylaws may be amended or repealed by the vote or
written consent of holders of a majority of the outstanding shares
entitled to vote; provided, however, that if the articles of
incorporation of the corporation set forth the number of authorized
directors of the corporation, the authorized number of directors
may be changed only by an amendment of the articles of
incorporation.
Section 2. AMENDMENT BY DIRECTORS. Subject to the rights of
the shareholders as provided in Section 1 of this Article IX,
bylaws, other than a bylaw or an amendment of a bylaw changing the
authorized number of directors, may be adopted, amended, or
repealed by the board of directors.
GIBSON, DUNN & CRUTCHER LLP
JAMBOREE CENTER
4 PARK PLAZA
IRVINE, CALIFORNIA 92714-8557
(714) 451-3800
June 6, 1996
Callaway Golf Company
2285 Rutherford Road
Carlsbad, CA 92008-8815
Re: Registration Statement on Form S-8 for
2,000,000 Shares of Common Stock
Ladies and Gentlemen:
We have acted as your counsel in the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") to be filed with the
Securities and Exchange Commission to register 2,000,000 shares of common
stock, $.01 par value per share (the "Common Stock"), of Callaway Golf
Company, a California corporation (the "Company"), to be issued pursuant to
the Company's 1996 Stock Option Plan (the "Plan").
For purposes of rendering this opinion, we have made such legal and
factual examinations as we have deemed necessary under the circumstances and,
as part of such examination, we have examined, among other things, originals
and copies, certified or otherwise, identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
or appropriate. For the purposes of such examination , we have assumed the
genuineness of all signatures on original documents and the conformity to
original documents of all copies submitted to us.
On the basis of and in reliance upon the foregoing examination and
assumptions, we are of the opinion that assuming the Registration Statement
shall have become effective pursuant to the provisions of the Securities Act
of 1933, as amended, the shares of Common Stock being offered under the Plan,
when issued in accordance with the Registration Statement and the provisions
of the Plan, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
GIBSON, DUNN & CRUTCHER LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 24, 1996, which appears
on page 23 of the 1995 Annual Report to Shareholders of Callaway Golf
Company, which is incorporated by reference in Callaway Golf Company's
Annual Report on Form 10-K for the year ended December 31, 1995. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 15 of such Annual Report on
Form 10-K.
PRICE WATERHOUSE LLP
San Diego, California
June 6, 1996