Stuart Waterstone

[Waterstone]

During last Thursday's lecture, I told you I would be posting two items with the purpose of expanding my lecture. Here they are:

UNQUALIFIED RIGHT

MODERN: Exception to general rule. Any shareholder may inspect following records regardless of purpose:

A. Articles and bylaws

B. Board resolutions regarding classification of shares

C. Minutes of shareholders' meetings from past three years

D. Communications sent by Corp. to shareholders over past three years

E. A list of names and business addresses of current directors and officers, and

F. A copy of most recent annual report.

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EXECUTIVE COMMITTEES

Board may create one/more committees, each made up of two/more members of board.

SELECTION

Creation of committee and appointment of members must be approved by greater of:

Majority of all directors in office when action taken; or

Number of directors required to take action under statutory voting requirements.

POWERS SUBJECT TO THE FOLLOWING LIMITATIONS

Committees may exercise authority granted by board. However committee may not do any of the following:

Authorize distributions

Approve or submit to shareholders any action that requires shareholder approval

Fill vacancies on the board or a committee;

Amend articles of incorporation;

Adopt, amend, or repeal bylaws

Approve plan of merger not requiring shareholder approval;

Authorize reacquisition of shares, except according to a formula or method prescribed by the board; or

Authorize issuance, sale, or contract for sale of shares, or determine relative rights and preferences of class or series (however, board may authorize committee or executive officer of the corporation to do so w/in limits set forth by board).