Executive and Other Committees of FSCs

COL070307 CH. 2 FORMATION OF CORPORATIONS If the articles of incorporation or the by-laws so provide, the board of directors, by resolution adopted by a majority of the full board of directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution or in the articles of incorporation or the by-laws of the corporation, shall have and may exercise all the authority of the board of directors, except that no such committee shall have authority to

(i)authorize distributions,

(ii)approve or recommend to shareholders actions or proposals required by law to be approved by shareholders,

(iii)designate candidates for the office of director, for purposes of proxy solicitation or otherwise, or fill vacancies on the board of directors or any committee thereof,

(iv)amend the by-laws,

(v)approve a plan of merger not requiring shareholder approval,

(vi)authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the board of directors, or

(vii)authorize or approve the issuance or sale of, or any contract to issue or sell, shares or designate the terms of a series of a class of shares, provided that the board of directors, having acted regarding general authorization for the issuance or sale of shares, or any contract therefor, and, in the case of a series, the designation thereof, may, pursuant to a general formula or method specified by the board by resolution or by adoption of a stock option or other plan, authorize a committee to fix the terms of any contract for the sale of the shares and to fix the terms upon which such shares may be issued or sold, including, without limitation, the price, the dividend rate, provisions for redemption, sinking fund, conversion, voting or preferential rights, and provisions for other features of a class of shares, or a series of a class of shares, with full power in such committee to adopt any final resolution setting forth all the terms thereof and to authorize the statement of the terms of a series for filing with the Director of Revenue and Taxation. Neither the designation of any such committee, the delegation thereto of authority, nor action by such committee pursuant to such authority shall alone constitute compliance by any member of the board of directors, not a member of the committee in question, with his responsibility to act in good faith, in a manner he reasonably believes to be in the best interests of the corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances. Except as may be otherwise restricted by the articles of incorporation or by-laws, members of the board of directors or any committee designated thereby may participate in a meeting of such board or committee by means COL070307 CH. 2 FORMATION OF CORPORATIONS of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall constitute presence in person at a meeting. Notwithstanding any other provisions of this Section, the provisions of this Section shall apply only to Foreign Sales Corporations or FSCs, as such terms are defined in [§ 16500 of the Government Code, as the same may be amended from time to time.