FORM 10-Q/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) of THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 2001 Commission File Number 0-17071
First Merchants Corporation
(Exact name of registrant as specified in its charter)
Indiana 35-1544218
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
200 East Jackson Street - Muncie, IN 47305-2814
(Address of principal executive office) (Zip
code)
(765) 747-1500
(Registrant's telephone number, including area code)
Not Applicable
(Former name former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days,
Yes X No
As of October 31, 2001, there were 12,676,707 outstanding common
shares, without par value, of the registrant.
This report including the cover page contains a total of 21 pages.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
INDEX
Page No.
PART I. Financial information:
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................3
Item 3. Quantitative and Qualitative Disclosures About
Market Risk..................................................9
PART II. Other Information:
Item 6. Exhibits and Reports of Form 8-K............................10
Signatures ............................................................11
TEXT OF AMENDMENT
Explanatory note:
Each of the above listed Items is hereby amended by deleting the Item in its
entirety and replacing it with the Items attached hereto and filed herewith.
The purpose of this amendment is to amend the Corporation's 10-Q for the period
ending September 30, 2001 (the "Original Filing") to reflect additional
information presented regarding disclosures about market risk and Exhibits and
Reports on Form 8-K. Any item in the Original Filing not expressly changed
hereby shall be as set forth in the Original Filing.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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First Merchants Corporation's (the "Corporation") financial data for periods
prior to mergers accounted for as pooling of interests has been restated.
Forward-Looking Statements
Congress passed the Private Securities Litigation Report Act of 1995 to
encourage corporations to provide investors with information about the company's
anticipated future financial performance, goals, and strategies. The act
anticipated future financial performance, goals, and strategies. The act
provides a safe harbor for such disclosure, or in other words, protection from
unwarranted litigation if actual results are not the same as management's
expectations.
First Merchants Corporation desires to provide its shareholders with
sound information about past performance and future trends. Consequently, this
Quarterly Report, including Management's Discussion and Analysis of Financial
Condition and Results of Operations, contains forward-looking statements that
are subject to numerous assumptions, risks, and uncertainties. Actual results
could differ materially from those contained in or implied by First Merchants
Corporation's statements due to a variety of factors including: changes in
economic conditions; movements in interest rates; competitive pressures on
product pricing and services; success and timing of business strategies; the
successful integration of acquired businesses; the nature and extent of
governmental actions and reform; and extended disruption of vital
infrastructure. The management of First Merchants Corporation encourages readers
of this report to understand forward-looking statements to be strategic
objectives rather than absolute targets of future performance.
Results of Operations
Net income for the three months ended September 30, 2001, was
$6,020,000, compared to $5,275,000 earned in the same period of 2000. Diluted
earnings per share were $.47 an increase of $.04 over the $.43 reported for the
first quarter 2000.
Net income for the nine months ended September 30, 2001, was
$16,700,000, compared to $15,098,000 during the same period in 2000. Diluted
earnings per share were $1.35, a 6.3% increase over $1.27 in 2000.
Cash basis earnings per share for the quarter increased 8.9% to $.49
up $.04 from $.45. Year to date cash basis earnings per share increased 8.4%
to $1.42 from $1.31 in 2000.
Annualized returns on average assets and average shareholder's equity
for nine months ended September 30, 2001 were 1.35 percent and 13.66 percent,
respectively, compared with 1.32 percent and 14.61 percent for the same period
of 2000.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Capital
The Corporation's capital strength continues to exceed regulatory
minimums and peer group averages. Management believes that strong capital is a
distinct advantage in the competitive environment in which the Corporation
operates and will provide a solid foundation for continued growth.
The Corporation's Tier I capital to average assets ratio was 8.7
percent at year-end 2000 and 8.1 percent at September 30, 2001. At September 30,
2001, the Corporation had a Tier I risk-based capital ratio of 11.0 percent and
total risk-based capital ratio of 12.1 percent. Regulatory capital guidelines
require a Tier I risk-based capital ratio of 4.0 percent and a total risk-based
capital ratio of 8.0 percent. Banks with Tier I risk-based capital ratios of 6.0
percent and total risk-based capital ratios of 10.0 percent are considered "well
capitalized." All of the Banks remain "well capitalized" as of September 30,
2001.
Asset Quality/Provision for Loan Losses
The Corporation's asset quality and loan loss experience have
consistently been superior to that of its peer group, as summarized on the
following page. Asset quality has been a major factor in the Corporation's
ability to generate consistent profit improvement.
The allowance for loan losses is maintained through the provision for
loan losses, which is a charge against earnings.
The amount provided for loan losses and the determination of the
adequacy of the allowance are based on a continuous review of the loan
portfolio, including an internally administered loan "watch" list and an
independent loan review provided by an outside accounting firm. The evaluation
takes into consideration identified credit problems, as well as the possibility
of losses inherent in the loan portfolio that cannot be specifically identified.
The following table summarizes the risk elements for the Corporation.
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(Dollars in Thousands) September 30, December 31,
2001 2000
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Non-accrual loans .................. $3,330 $2,370
Loans contractually past due 90 days
Or more other than nonaccruing
2,978 2,465
Restructured loans ................. 2,886 3,085
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Total ................ $9,194 $7,920
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At September 30, 2001, non-performing loans totaled $9,194,000, an
increase of $1,274,000 from December 31, 2000.
At December 31, 2000, impaired loans totaled $14,839,000. An
allowance for losses was not deemed necessary for impaired loans totaling
$6,977,000, but an allowance of $2,253,000 was recorded for the remaining
balance of impaired loans of $7,862,000. The average balance of impaired loans
for 2000 was $15,053,000.
At September 30, 2001, the allowance for loan losses increased by
$2,453,000, to $14,907,000, up from year end 2000. The increase was primarily
due to the allowance acquired in the acquisition of Francor Financial, Inc.,
which totaled $2,085,000. As a percent of loans, the allowance was 1.09
percent, up from 1.06 percent at year end 2000.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
For the nine months ended September 30, 2001, the provision totaled
$2,371,000. The provision was $624,000 more than the $1,747,000 provision from
the comparable period in 2000, primarily due to the general downturn in the
economy and an increase in non-performing loans. Net charge offs amounted to
$2,003,000 during the nine months ended September 30, 2001.
The third quarter 2001 provision of $1,023,000 increased $420,000 from
$603,000 for the same quarter in 2000, primarily due to the general downturn in
the economy and an increase in non-performing loans. Net charge offs amounted
to $706,000 during the quarter.
Nine Months Ended
September 30,
------------------
------------------
2001 2000
---- ----
(Dollars in Thousands)
Balance at beginning of period ......................... $12,454 $10,128
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Allowance acquired in acquisition....................... 2,085 1,413
Chargeoffs ............................................. (2,467) (1,517)
Recoveries ............................................. 464 461
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Net chargeoffs ......................................... (2,003) (1,056)
Provision for loan losses .............................. 2,371 1,747
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Balance at end of period................................ $14,907 $12,232
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Ratio of net chargeoffs during the period to average loans
outstanding during the period - annualized.............. .21% .13%
Liquidity, Interest Sensitivity, and Disclosures About Market Risk
Asset/Liability management has been an important factor in the
Corporation's ability to record consistent earnings growth through periods of
interest rate volatility and product deregulation. Management and the Board of
Directors monitor the Corporation's liquidity and interest sensitivity positions
at regular meetings to ensure that changes in interest rates will not adversely
affect earnings. Decisions regarding investment and the pricing of loan and
deposit products are made after analysis of reports designed to measure
liquidity, rate sensitivity, the Corporation's exposure to changes in net
interest income given various rate scenarios, and the economic and competitive
environments.
It is the objective of the Corporation to monitor and manage risk
exposure to net interest income caused by changes in interest rates. It is the
goal of the Corporation's Asset Liability function to provide optimum and stable
net interest income. To accomplish this, management uses two asset liability
tools. GAP/Interest Rate Sensitivity Reports and Net Interest Income Simulation
Modeling are both constructed, presented, and monitored quarterly.
The Corporation's liquidity and interest sensitivity position at
September 30, 2001, remained adequate to meet the Corporation's primary goal of
achieving optimum interest margins while avoiding undue interest rate risk.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
The Corporation places its greatest credence in net interest income
simulation modeling. The GAP/Interest Rate Sensitivity Report is known to have
two major shortfalls. The GAP/Interest Rate Sensitivity Report fails to
precisely gauge how often an interest rate sensitive product reprices, nor is it
able to measure the magnitude of potential future rate movements.
The Corporation's asset liability process monitors simulated net
interest income under three separate interest rate scenarios; rising (rate
shock), falling (rate shock) and base case (flat rates). Net Interest income is
simulated over a 12-month horizon. By policy, the difference between the best
performing and the worst performing rate scenarios are not allowed to show a
variance greater than 5 percent.
Assumed interest rate changes are simulated to move incrementally over
12 months. The total rate movement (beginning point minus ending point) to
noteworthly interest rate indexes are as follows:
Rising Falling
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Prime 200 Basis Points (150) Basis Points
Federal Funds 200 (100)
One Year T-Bill 200 (100)
Two Year T-Bill 200 (100)
Interest Checking 100 ( 25)
MMIA Savings 75 ( 25)
Money Market Index 200 (100)
CD's 170 (130)
FHLB Advances 200 (100)
Results for the flat, rising (rate shock), and falling (rate shock)
interest scenarios are listed below. The net interest income shown represents
cumulative net interest income over a 12-month time horizon. Balance sheet
assumptions are the same under all scenarios:
Base Case
Flat Rates Rising Falling
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Net Interest Income (Dollars in Thousands) $69,640 $70,667 $67,750
Change vs. Base Case 1,027 (1,890)
Percent Change 1.47% (2.71)%
Policy Limitation (5.00)% (5.00)%
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Earning Assets
The following table presents the earning asset mix as of September 30,
2001, and December 31, 2000, and December 31, 1999.
Loans grew by over $186 million from December 31, 2000 to
September 30, 2001, which included $134.5 million of loans acquired as part of
the Francor Financial, Inc. acquisition. Investment securities declined by
$57.9 million during the same period. Commercial and industrial loans increased
by more than $32 million, while individuals' loans for household and personal
expenditures increased by nearly $4.9 million.
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EARNING ASSETS
(Dollars in Millions) September 30, December 31, December 31,
2001 2000 1999
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Federal funds sold and interest-bearing deposits $ 21.6 $ 15.8 $ 27.1
Investment securities available for sale ....... 241.1 295.7 329.7
Investment securities held to maturity ......... 8.9 12.2 14.3
Mortgage loans held for sale ................... .8
Loans .......................................... 1,361.6 1,175.6 998.9
Federal Reserve and Federal Home Loan Bank stock 7.9 7.2 5.8
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Total ..................... $ 1,641.9 $ 1,506.5 $ 1,375.8
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FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Net Interest Income
Net Interest Income is the primary source of the Corporation's
earnings. It is a function of net interest margin and the level of average
earning assets.
The table below presents the Corporation's asset yields, interest
expense, and net interest income as a percent of average earning assets for the
nine months ended September 30, 2001 and 2000.
Annualized net interest income (FTE) for the nine months ended
September 30, 2001 increased by $7,472,000, or 12.9 percent over the same
period in 2000, due to an increase in average earning assets of over $109
million.
- --------------------------- ------------------- -------------------- -------------------- -------------- --------------------
(Dollars in Thousands)
Interest Income Net Interest Income Annualized
(FTE) as a Percent Interest Expense (FTE) as a Percent Net Interest Income
of Average as a Percent of Average Average On a
Earning Assets of Average Earning Assets Earning Fully Taxable
Earning Assets Assets Equivalent Basis
- --------------------------- ------------------- -------------------- -------------------- -------------- --------------------
For the three months
Ended September 30,
2001 7.79% 3.46% 4.33% $1,652,318 $71,526
2000 8.20% 4.24% 3.96% $1,527,890 $60,486
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- -------------------------- ------------------- -------------------- -------------------- -------------- ---------------------
(Dollars in Thousands)
Interest Income Net Interest Income Annualized
(FTE) as a Percent Interest Expense (FTE) as a Percent Net Interest Income
of Average as a Percent of Average Average On a
Earning Assets of Average Earning Assets Earning Fully Taxable
Earning Assets Assets Equivalent Basis
- -------------------------- ------------------- -------------------- -------------------- -------------- ---------------------
For the nine months
Ended September30,
2001 8.00% 3.77% 4.23% $1,545,820 $65,408
2000 8.10% 4.07% 4.03% $1,436,429 $57,936
Average earning assets include the average balance of securities classified as
available for sale, computed based on the average of the historical amortized
cost balances without the effects of the fair value adjustment.
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FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Other Income
The Corporation has placed emphasis on the growth of non-interest
income in recent years by offering a wide range of fee-based services. Fee
schedules are regularly reviewed by a pricing committee to ensure that the
products and services offered by the Corporation are priced to be competitive
and profitable.
Other income in the third quarter of 2001 exceeded the same quarter in
the prior year by $424,000, or 9.7 percent.
Two major areas account for most of the increase:
1. Service charges on deposit accounts increased $265,000 or 21.4 percent
due to increased number of accounts and price adjustments.
2. Gains on sale of mortgage loans increased by $240,000 due to declining
interest rates and increased mortgage volume.
Other income in the first nine months of 2001 exceeded the same period
in the prior year by $1,446,000, or 11.7 percent.
Three major areas account for most of the increase:
1. Service charges on deposit accounts increased $618,000 or 17.7 percent
due to increased number of accounts and price adjustments.
2. Revenues from fiduciary activities increased $366,000 or 9.8 percent
due primarily to increased sales efforts of First Merchants Insurance
Services, Inc.
3. Gains on sale of mortgage loans increased by $592,000 due to declining
interest rates and increased mortgage volume.
Other Expense
Total other expenses represent non-interest operating expenses of the
Corporation. Other expense during the third quarter of 2001 exceeded the same
period of the prior year by $1,787,000, or 17.5 percent.
Three major areas account for most of the increase:
1. Salaries and benefit expense grew $971,000 or 17.7 percent, due to
normal salary increases and staff additions.
2. Processing expense increased by $123,000 or 17.8 percent, due to an
increased volume of activity.
3. Other outside services expense increased by $114,000, primarily
attributed to an increased use of such services.
Total other expense during the first nine months in 2001 exceeded the
same period of the prior year by $3,478,000, or 11.8 percent.
Three major areas account for most of the increase:
1. Salaries and benefit expense grew $1,971,000 or 12.2 percent, due to
normal salary increases and staff additions.
2. Goodwill amortization increased by $604,000, due to utilization of the
purchase method of accounting for the Corporation's June 1, 2000
acquisition of Decatur Bank & Trust Company.
3. Equipment expense grew $265,000 or 23.2%, due to decisions made to
maintain and repair equipment items, rather than purchasing new
equipment.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Income Taxes
Income tax expense during the third quarter totaled $2,870,000, an
increase of $148,000 over the $2,722,000 reported in the same quarter of 2000.
Income tax expense, for the nine months ended September 30, 2001,
increased by $1,500,000 over the same period in 2000.
Other
The Securities and Exchange Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission, including
the Corporation, and that address is (http://www.sec.gov).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information required under this item is included as part of Management's
Discussion and Analysis under the heading Liquidity, Interest Sensitivity, and
Disclosures About Market Risk.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No.: Description of Exhibit: Form 10-Q/A, Page No.:
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Exhibit 3(ii) Bylaws of First Merchants 12
Corporation, as most
recently amended on
August 14, 2001
(b) Reports on Form 8-K:
A report on Form 8-K, dated August 14, 2001, was filed under
report item number 5, concerning the Corporation's declaration of
a five percent (5%) stock dividend on its shares of common stock.
The dividend was payable to shareholders of record on September 3,
2001. The date of delivery of shares to be issued pursuant to the
stock dividend was September 24, 2001.
A report on Form 8-K, dated October 15, 2001, was filed under
report item number 5, concerning the Corporation and Lafayette
Bancorporation ("Lafayette") jointly announcing the signing of a
definitive agreement pursuant to which Lafayette will be merged
with and into the Corporation. The Agreement of Reorganization
and Merger between the Corporation and Lafayette dated October 14,
2001, was attached to this Form 8-K as Exhibit 2 and incorporated
within by reference.
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
First Merchants Corporation
---------------------------
(Registrant)
Date 12/19/01 by /s/ Michael L. Cox
--------------------------- -------------------------------------
Michael L. Cox
President and Chief Executive Officer
Date 12/19/01 by /s/ James L. Thrash
--------------------------- -------------------------------------
James L. Thrash
Chief Financial & Principal
Accounting Officer
FIRST MERCHANTS CORPORATION
FORM 10-Q/A
Exhibit 3(ii)
BYLAWS OF
FIRST MERCHANTS CORPORATION
Following are the Bylaws, as amended, of First Merchants Corporation
(hereinafter referred to as the "Corporation"), a corporation existing pursuant
to the provisions of the Indiana Business Corporation Law, as amended
(hereinafter referred to as the "Act"):
ARTICLE I
Section 1. Name. The name of the Corporation is First Merchants
Corporation.
Section 2. Principal Office and Resident Agent. The post office
address of the principal office of the Corporation is 200 East Jackson Street,
Muncie, Indiana 47305, and the name of its Resident Agent in charge of such
office is Larry R. Helms.
Section 3. Seal. The seal of the Corporation shall be circular
in form and mounted upon a metal die, suitable for impressing the same upon
paper. About the upper periphery of the seal shall appear the words "First
Merchants Corporation" and about the lower periphery thereof the word "Muncie,
Indiana". In the center of the seal shall appear the word "Seal".
ARTICLE II
The fiscal year of the Corporation shall begin each year on the first
day of January and end on the last day of December of the same year.
ARTICLE III
Capital Stock
Section 1. Number of Shares and Classes of Capital Stock.
The total number of shares of capital stock which the Corporation shall have
authority to issue shall be as stated in the Articles of Incorporation.
Section 2. Consideration for No Par Value Shares. The shares
of stock of the Corporation without par value shall be issued or sold in such
manner and for such amount of consideration as may be fixed from time to time by
the Board of Directors. Upon payment of the consideration fixed by the Board of
Directors, such shares of stock shall be fully paid and nonassessable.
Section 3. Consideration for Treasury Shares. Treasury
shares may be disposed of by the Corporation for such consideration as may be
determined from time to time by the Board of Directors.
Section 4. Payment for Shares. The consideration for the
issuance of shares of capital stock of the Corporation may be paid, in whole or
in part, in money, in other property, tangible or intangible, or in labor
actually performed for, or services actually rendered to the Corporation;
provided, however, that the part of the surplus of the Corporation which is
transferred to stated capital upon the issuance of shares as a share dividend
shall be deemed to be the consideration for the issuance of such shares. When
payment of the consideration for which a share was authorized to be issued shall
have been received by the Corporation, or when surplus shall have been
transferred to stated capital upon the issuance of a share dividend, such share
shall be declared and taken to be fully paid and not liable to any further call
or assessment, and the holder thereof shall not be liable for any further
payments thereon. In the absence of actual fraud in the transaction, the
judgment of the Board of Directors as to the value of such property, labor or
services received as consideration, or the value placed by the Board of
Directors upon the corporate assets in the event of a share dividend, shall be
conclusive. Promissory notes, uncertified checks, or future services shall not
be accepted in payment or part payment of the capital stock of the Corporation,
except as permitted by the Act.
Section 5. Certificate for Shares. Each holder of capital
stock of the Corporation shall be entitled to a stock certificate, signed by the
President or a Vice President and the Secretary or any Assistant Secretary of
the Corporation, with the seal of the Corporation thereto affixed, stating the
name of the registered holder, the number of shares represented by such
certificate, the par value of each share of stock or that such shares of stock
are without par value, and that such shares are fully paid and nonassessable. If
such shares are not fully paid, the certificates shall be legibly stamped to
indicate the percent, which has been paid, and as further payments are made, the
certificate shall be stamped accordingly.
If the Corporation is authorized to issue shares of more than one
class, every certificate shall state the kind and class of shares represented
thereby, and the relative rights, interests, preferences and restrictions of
such class, or a summary thereof; provided, that such statement may be omitted
from the certificate if it shall be set forth upon the face or back of the
certificate that such statement, in full, will be furnished by the Corporation
to any shareholder upon written request and without charge.
Section 6. Facsimile Signatures. If a certificate is
countersigned by the written signature of a transfer agent other than the
Corporation or its employee, the signatures of the officers of the Corporation
may be facsimiles. If a certificate is countersigned by the written signature of
a registrar other than the Corporation or its employee, the signatures of the
transfer agent and the officers of the Corporation may be facsimiles. In case
any officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have 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 its issue.
Section 7. Transfer of Shares. The shares of capital stock of
the Corporation shall be transferable only on the books of the Corporation upon
surrender of the certificate or certificates representing the same, properly
endorsed by the registered holder or by his duly authorized attorney or
accompanied by proper evidence of succession, assignment or authority to
transfer.
Section 8. Cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be canceled, and no new certificate
or certificates shall be issued in exchange for any existing certificate until
such existing certificate shall have been so canceled, except in cases provided
for in Section 10 of this Article III.
Section 9. Transfer Agent and Registrar. The Board of Directors
may appoint a transfer agent and a registrar for each class of capital stock of
the Corporation and may require all certificates representing such shares to
bear the signature of such transfer agent and registrar. Shareholders shall be
responsible for notifying the Corporation or transfer agent and registrar for
the class of stock held by such shareholder in writing of any changes in their
addresses from time to time, and failure so to do shall relieve the Corporation,
its shareholders, Directors, officers, transfer agent and registrar of liability
for failure to direct notices, dividends, or other documents or property to an
address other than the one appearing upon the records of the transfer agent and
registrar of the Corporation.
Section 10. Lost, Stolen or Destroyed Certificates. The
Corporation may cause a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Corporation may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to give the Corporation a bond in
such sum and in such form as it may direct to indemnify against any claim that
may be made against the Corporation with respect to the certificates alleged to
have been lost, stolen or destroyed or the issuance of such new certificate. The
Corporation, in its discretion, may authorize the issuance of such new
certificates without any bond when in its judgment it is proper to do so.
Section 11. Registered Shareholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of such shares to receive dividends, to vote as such owner, to hold
liable for calls and assessments, and to treat as owner in all other respects,
and shall not be bound to recognize any equitable or other claims to or interest
in such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Indiana.
Section 12. Options to Officers and Employees. The issuance,
including the consideration, of rights or options to Directors, officers or
employees of the Corporation, and not to the shareholders generally, to purchase
from the Corporation shares of its capital stock shall be approved by the
affirmative vote of the holders of a majority of the shares entitled to vote
thereon or shall be authorized by and consistent with a plan approved by such a
vote of the shareholders.
ARTICLE IV
Meetings of Shareholders
Section 1. Place of Meeting. Meetings of shareholders of the
Corporation shall be held at such place, within or without the State of Indiana,
as may from time to time be designated by the Board of Directors, or as may be
specified in the notices or waivers of notice of such meetings.
Section 2. Annual Meeting. The annual meeting of shareholders
for the election of Directors, and for the transaction of such other business as
may properly come before the meeting, shall be held on the third Tuesday in
April of each year, if such day is not a holiday, and if a holiday, then on the
first following day that is not a holiday, or in lieu of such day may be held on
such other day as the Board of Directors may set by resolution, but not later
than the end of the fifth month following the close of the fiscal year of the
Corporation. Failure to hold the annual meeting at the designated time shall not
work any forfeiture or a dissolution of the Corporation, and shall not affect
otherwise valid corporate acts.
Section 3. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise prescribed by
statute or by the Articles of Incorporation, may be called by the Board of
Directors or the President and shall be called by the President or Secretary at
the request in writing of a majority of the Board of Directors, or at the
request in writing of shareholders holding of record not less than one-fourth
(1/4) of all the shares outstanding and entitled by the Articles of
Incorporation to vote on the business for which the meeting is being called.
Section 4. Notice of Meetings. A written or printed notice,
stating the place, day and hour of the meeting, and in case of a special
meeting, or when required by any other provision of the Act, or of the Articles
of Incorporation, as now or hereafter amended, or these Bylaws, the purpose or
purposes for which the meeting is called, shall be delivered or mailed by the
Secretary, or by the officers or persons calling the meeting, to each
shareholder of record entitled by the Articles of Incorporation, as now or
hereafter amended, and by the Act to vote at such meeting, at such address as
appears upon the records of the Corporation, at least ten (10) days before the
date of the meeting. Notice of any such meeting may be waived in writing by any
shareholder, if the waiver sets forth in reasonable detail the purpose or
purposes for which the meeting is called, and the time and place thereof.
Attendance at any meeting in person, or by proxy, shall constitute a waiver of
notice of such meeting. Each shareholder, who has in the manner above provided
waived notice of a shareholders' meeting, or who personally attends a
shareholders' meeting, or is represented thereat by a proxy authorized to appear
by an instrument of proxy, shall be conclusively presumed to have been given due
notice of such meeting. Notice of any adjourned meeting of shareholders shall
not be required to be given if the time and place thereof are announced at the
meeting at which the adjournment is taken except as may be expressly required by
law.
Section 5. Addresses of Shareholders. The address of any
shareholder appearing upon the records of the Corporation shall be deemed to be
the latest address of such shareholder appearing on the records maintained by
the Corporation or its transfer agent for the class of stock held by such
shareholder.
Section 6. Voting at Meetings.
(a) Quorum. The holders of record of a majority of the issued and
outstanding stock of the Corporation entitled to vote at such meeting, present
in person or by proxy, shall constitute a quorum at all meetings of shareholders
for the transaction of business, except where otherwise provided by law, the
Articles of Incorporation or these Bylaws. In the absence of a quorum, any
officer entitled to preside at, or act as secretary of, such meeting shall have
the power to adjourn the meeting from time to time until a quorum shall be
constituted. At any such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted at the original
meeting, but only those shareholders entitled to vote at the original meeting
shall be entitled to vote at any adjournment or adjournments thereof unless a
new record date is fixed by the Board of Directors for the adjourned meeting.
(b) Voting Rights. Except as otherwise provided by law or by
the provisions of the Articles of Incorporation, every shareholder shall have
the right at every shareholders' meeting to one vote for each share of stock
having voting power, registered in his name on the books of the Corporation on
the date for the determination of shareholders entitled to vote, on all matters
coming before the meeting including the election of directors. At any meeting of
shareholders, every shareholder having the right to vote shall be entitled to
vote in person, or by proxy executed in writing by the shareholder or a duly
authorized attorney in fact and bearing a date not more than eleven (11) months
prior to its execution, unless a longer time is expressly provided therein.
(c) Required Vote. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which, by express provision of the Act
or of the Articles of Incorporation or by these Bylaws, a greater vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 7. Voting List. The Corporation or its transfer agent
shall make, at least five (5) days before each election of directors, a complete
list of the shareholders entitled by the Articles of Incorporation, as now or
hereafter amended, to vote at such election, arranged in alphabetical order,
with the address and number of shares so entitled to vote held by each, which
list shall be on file at the principal office of the Corporation and subject to
inspection by any shareholder. Such list shall be produced and kept open at the
time and place of election and subject to the inspection of any shareholder
during the holding of such election. The original stock register or transfer
book, or a duplicate thereof kept in the State of Indiana, shall be the only
evidence as to who are the shareholders entitled to examine such list or the
stock ledger or transfer book or to vote at any meeting of the shareholders.
Section 8. Fixing of Record Date to Determine Shareholders
Entitled to Vote. The Board of Directors may prescribe a period not exceeding
fifty (50) days prior to meetings of the shareholders, during which no transfer
of stock on the books of the Corporation may be made; or, in lieu of prohibiting
the transfer of stock may fix a day and hour not more than fifty (50) days prior
to the holding of any meeting of shareholders as the time as of which
shareholders entitled to notice of, and to vote at, such meeting shall be
determined, and all persons who are holders of record of voting stock at such
time, and no others, shall be entitled to notice of, and to vote at, such
meeting. In the absence of such a determination, such date shall be ten (10)
days prior to the date of such meeting.
Section 9. Nominations for Director. Nominations for
election to the Board of Directors may be made by the Board of Directors or by
an shareholder of any outstanding class of capital stock of the Corporation
entitled to vote for the election of directors. Nominations, other than those
made by or on behalf of the existing management of the Corporation, shall be
made in writing and shall be delivered or mailed to the President of the
Corporation not less than ten (10) days nor more than fifty (50) days prior to
any meeting of shareholders called for the election of Directors. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee;
(b) the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the Corporation that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the Corporation owned by the
notifying shareholder. Nominations not made in accordance herewith may, in his
discretion, be disregarded by the chairman of the meeting, and upon his
instructions, the vote tellers may disregard all votes cast for each such
nominee.
ARTICLE V
Board of Directors
Section 1. Election, Number and Term of Office. The number of
Directors of the Corporation to be elected by the holders of the shares of stock
entitled by the Articles of Incorporation to elect Directors shall be fourteen
(14) unless changed by amendment of this Section by a two-thirds (2/3) vote of
the Board of Directors.
The Directors shall be divided into three (3) classes as nearly equal
in number as possible, all Directors to serve three (3) year terms except as
provided in the third paragraph of this Section. One class shall be elected at
each annual meeting of the shareholders, by the holders of the shares of stock
entitled by the Articles of Incorporation to elect Directors. Unless the number
of Directors is changed by amendment of this Section, Classes I and II shall
each have five (5) Directors, and Class III shall have four (4) Directors. No
decrease in the number of Directors shall have the effect of shortening the term
of any incumbent Director.
No person shall serve as a Director subsequent to the annual meeting
of shareholders following the end of the calendar year in which such person
attains the age of seventy (70) years. The term of a Director shall expire as of
the annual meeting following which the Director is no longer eligible to serve
under the provisions of this paragraph, even if fewer than three (3) years have
elapsed since the commencement of the Director's term.
Except in the case of earlier resignation, removal or death, all
Directors shall hold office until their respective successors are chosen and
qualified.
The provisions of this Section of the Bylaws may not be changed or
amended except by a two-thirds (2/3) vote of the Board of Directors.
Section 2. Vacancies. Any vacancy occurring in the Board
of Directors caused by resignation, death or other incapacity, or an increase in
the number of Directors, shall be filled by a majority vote of the remaining
members of the Board of Directors, until the next annual meeting of the
shareholders, or at the discretion of the Board of Directors, such vacancy may
be filled by a vote of the shareholders at a special meeting called for that
purpose.
Section 3. Annual Meeting of Directors. The Board of
Directors shall meet each year immediately after the annual meeting of the
shareholders, at the place where such meeting of the shareholders has been held
either within or without the State of Indiana, for the purpose of organization,
election of officers, and consideration of any other business that may properly
come before the meeting. No notice of any kind to either old or new members of
the Board of Directors for such annual meeting shall be necessary.
Section 4. Regular Meetings. Regular meetings of the Board
of Directors shall be held at such times and places, either within or without
the State of Indiana, as may be fixed by the Directors. Such regular meetings of
the Board of Directors may be held without notice or upon such notice as may be
fixed by the Directors.
Section 5. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by not
less than a majority of the members of the Board of Directors. Notice of the
time and place, either within or without the State of Indiana, of a special
meeting shall be served upon or telephoned to each Director at least twenty-four
(24) hours, or mailed, telegraphed or cabled to each Director at his usual place
of business or residence at least forty-eight (48) hours, prior to the time of
the meeting. Directors, in lieu of such notice, may sign a written waiver of
notice either before the time of the meeting, at the meeting or after the
meeting. Attendance by a Director in person at any special meeting shall
constitute a waiver of notice.
Section 6. Quorum. A majority of the actual number of Directors
elected and qualified, from time to time, shall be necessary to constitute a
quorum for the transaction of any business except the filling of vacancies, and
the act of a majority of the Directors present at the meeting, at which a quorum
is present, shall be the act of the Board of Directors, unless the act of a
greater number is required by the Act, by the Articles of Incorporation, or by
these Bylaws. A Director, who is present at a meeting of the Board of Directors,
at which action on any corporate matter is taken, shall be conclusively presumed
to have assented to the action taken, unless (a) his dissent shall be
affirmatively stated by him at and before the adjournment of such meeting (in
which event the fact of such dissent shall be entered by the secretary of the
meeting in the minutes of the meeting), or (b) he shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. The right of dissent provided for by either clause
(a) or cause (b) of the immediately preceding sentence shall not be available,
in respect of any matter acted upon at any meeting, to a Director who voted at
the meeting in favor of such matter and did not change his vote prior to the
time that the result of the vote on such matter was announced by the chairman of
such meeting.
A member of the Board of Directors may participate in a meeting of
the Board by means of a conference telephone or similar communications equipment
by which all Directors participating in the meeting can communicate with each
other, and participation by these means constitutes presence in person at the
meeting.
Section 7. Consent Action by Directors. Any action required
or permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if prior to such action a
written consent to such action is signed by all members of the Board of
Directors or such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board of Directors or committee.
Section 8. Removal. Any or all members of the Board of
Directors may be removed, with or without cause, at a meeting of the
shareholders called expressly for that purpose by the affirmative vote of the
holders of not less than two-thirds (2/3) of the outstanding shares of capital
stock then entitled to vote on the election of Directors, except that if the
Board of Directors, by an affirmative vote of at least two-thirds (2/3) of the
entire Board of Directors, recommends removal of a Director to the shareholders,
such removal may be effected by the affirmative vote of the holders of not less
than a majority of the outstanding shares of capital stock then entitled to vote
on the election of Directors at a meeting of shareholders called expressly for
that purpose.
The provisions in this Section of the Bylaws may not be changed or
amended except by a two-thirds (2/3) vote of the Board of Directors.
Section 9. Dividends. The Board of Directors shall have power,
subject to any restrictions contained in the Act or in the Articles of
Incorporation and out of funds legally available therefore, to declare and pay
dividends upon the outstanding capital stock of the Corporation as and when they
deem expedient. Before declaring any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time in their absolute discretion deem proper for
working capital, or as a reserve or reserves to meet contingencies or for such
other purposes as the Board of Directors may determine, and the Board of
Directors may in their absolute discretion modify or abolish any such reserve in
the manner in which it was created.
Section 10. Fixing of Record Date to Determine Shareholders
Entitled to Receive Corporate Benefits. The Board of Directors may fix a day and
hour not exceeding fifty (50) days preceding the date fixed for payment of any
dividend or for the delivery of evidence of rights, or for the distribution of
other corporate benefits, or for a determination of shareholders for any other
purpose, as a record time for the determination of the shareholders entitled to
receive any such dividend, rights or distribution, and in such case only
shareholders of record at the time so fixed shall be entitled to receive such
dividend, rights or distribution. If no record date is fixed for the
determination of shareholders entitled to receive payment of a dividend, the end
of the day on which the resolution of the Board of Directors declaring such
dividend is adopted shall be the record date for such determination.
Section 11. Interest of Directors in Contracts. Any contract
or other transaction between the Corporation or any corporation in which this
Corporation owns a majority of the capital stock shall be valid and binding,
notwithstanding that the Directors or officers of this Corporation are identical
or that some or all of the Directors or officers, or both, are also directors or
officers of such other corporation.
Any contract or other transaction between the Corporation and one
or more of its Directors or members or employees, or between the Corporation and
any firm of which one or more of its Directors are members or employees or in
which they are interested, or between the Corporation and any corporation or
association of which one or more of its Directors are stockholders, members,
directors, officers, or employees or in which they are interested, shall be
valid for all purposes, notwithstanding the presence of such Director or
Directors at the meeting of the Board of Directors of the Corporation which acts
upon, or in reference to, such contract or transaction and notwithstanding his
or their participation in such action, if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of Directors shall
authorize, approve and ratify such contract or transaction by a vote of a
majority of the Directors present, such interested Director or Directors to be
counted in determining whether a quorum is present, but not to be counted in
calculating the majority of such quorum necessary to carry such vote. This
Section shall not be construed to invalidate any contract or other transaction,
which would otherwise be valid under the common and statutory law applicable
thereto.
Section 12. Committees. The Board of Directors may, by
resolution adopted by a majority of the actual number of Directors elected and
qualified, from time to time, designate from among its members an executive
committee and one or more other committees.
During the intervals between meetings of the Board of Directors,
any executive committee so appointed, unless expressly provided otherwise by law
or these Bylaws, shall have and may exercise all the authority of the Board of
Directors, including, but not limited to, the authority to issue and sell or
approve any contract to issue or sell, securities or shares of the Corporation
or designate the terms of a series or class of securities or shares of the
Corporation. The terms which may be affixed by the executive committee include,
but are not limited to, the price, dividend rate, and provisions of redemption,
a sinking fund, conversion, voting, or preferential rights or other features of
securities or class or series of a class of shares. Such committee may have full
power to adopt a final resolution which sets forth these terms and to authorize
a statement of such terms to be filed with the Secretary of State. However, such
executive committee shall not have the authority to declare dividends or
distributions, amend the Articles of Incorporation or the Bylaws, approve a plan
of merger or consolidation, even if such plan does not require shareholder
approval, reduce earned or capital surplus, authorize or approve the
reacquisition of shares unless pursuant to a general formula or method specified
by the Board of Directors, or recommend to the shareholders a voluntary
dissolution of the Corporation or a revocation thereof.
The Board of Directors may, in its discretion, constitute and
appoint other committees, in addition to an executive committee, to assist in
the management and control of the affairs of the Corporation, with
responsibilities and powers appropriate to the nature of the several committees
and as provided by the Board of Directors in the resolution of appointment or in
subsequent resolutions and directives. Such committees may include, but are not
limited to, an audit committee and a compensation and human resources committee.
No member of any committee appointed by the Board of Directors shall
continue to be a member thereof after he ceases to be a Director of the
Corporation. However, where deemed in the best interests of the Corporation, to
facilitate communication and utilize special expertise, directors of the
Corporation's affiliated banks and corporations may be appointed to serve on
such committees, as "affiliate representatives." Such affiliate representatives
may attend and participate fully in meetings of such committees, but they shall
not be entitled to vote on any matter presented to the meeting nor shall they be
counted for the purpose of determining whether a quorum exists. The calling and
holding of meetings of any such committee and its method of procedure shall be
determined by the Board of Directors. To the extent permitted by law, a member
of the Board of Directors, and any affiliate representative, serving on any such
committee shall not be liable for any action taken by such committee if he has
acted in good faith and in a manner he reasonably believes is in the best
interests of the Corporation. A member of a committee may participate in a
meeting of the committee by means of a conference telephone or similar
communications equipment by which all members participating in the meeting can
communicate with each other, and participation by these means constitutes
presence in person at the meeting.
ARTICLE VI
Officers
Section 1. Principal Officers. The principal officers of the
Corporation shall be a Chairman of the Board, Vice Chairman of the Board, a
President, one (1) or more Vice Presidents, a Treasurer and a Secretary. The
Corporation may also have, at the discretion of the Board of Directors, such
other subordinate officers as may be appointed in accordance with the provisions
of these Bylaws. Any two (2) or more offices may be held by the same person,
except the duties of President and Secretary shall not be performed by the same
person. No person shall be eligible for the office of Chairman of the Board,
Vice Chairman of the Board, or President who is not a Director of the
Corporation.
Section 2. Election and Term of Office. The principal officers
of the Corporation shall be chosen annually by the Board of Directors at the
annual meeting thereof. Each such officer shall hold office until his successor
shall have been duly chosen and qualified, or until his death, or until he shall
resign, or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any principal officer may be removed,
either with or without cause, at any time, by resolution adopted at any meeting
of the Board of Directors by a majority of the actual number of Directors
elected and qualified from time to time.
Section 4. Subordinate Officers. In addition to the principal
officers enumerated in Section 1 of this Article VI, the Corporation may have
one or more Assistant Treasurers, one or more Assistant Secretaries and such
other officers, agents and employees as the Board of Directors may deem
necessary, each of whom shall hold office for such period, may be removed with
or without cause, have such authority, and perform such duties as the President,
or the Board of Directors may from time to time determine. The Board of
Directors may delegate to any principal officer the power to appoint and to
remove any such subordinate officers, agents or employees.
Section 5. Resignations. Any officer may resign at any time by
giving written notice to the Chairman of the Board of Directors, or to the
President, or to the Secretary. Any such resignation shall take effect upon
receipt of such notice or at any later time specified therein, and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 6. Vacancies. Any vacancy in any office for any cause
may be filled for the unexpired portion of the term in the manner prescribed in
these Bylaws for election or appointment to such office for such term.
Section 7. Chairman of the Board. The Chairman of the Board,
who shall be chosen from among the Directors, shall preside at all meetings of
shareholders and at all meetings of the Board of Directors. He shall perform
such other duties and have such other powers as, from time to time, may be
assigned to him by the Board of Directors.
Section 8. Vice Chairman of the Board. The Vice Chairman of the
Board, who shall be chosen from among the Directors, shall act in the absence of
the Chairman of the Board. He shall perform such other duties and have such
other powers as, from time to time, may be assigned to him by the Board of
Directors.
Section 9. President. The President, who shall be chosen
from among the Directors, shall be the chief executive officer of the
Corporation and as such shall have general supervision of the affairs of the
Corporation, subject to the control of the Board of Directors. He shall be an ex
officio member of all standing committees. In the absence or disability of the
Chairman of the Board and Vice Chairman of the Board, the President shall
preside at all meetings of shareholders and at all meetings of the Board of
Directors. Subject to the control and direction of the Board of Directors, the
President may enter into any contract or execute and deliver any instrument in
the name and on behalf of the Corporation. In general, he shall perform all
duties and have all powers incident to the office of President, as herein
defined, and all such other duties and powers as, from time to time, may be
assigned to him by the Board of Directors.
Section 10. Vice Presidents. The Vice Presidents in the order
of their seniority, unless otherwise determined by the Board of Directors,
shall, in the absence or disability of the President and Executive Vice
President, perform the duties and exercise the powers of the President. They
shall perform such other duties and have such other powers as the President or
the Board of Directors may from time to time assign.
Section 11. Treasurer. The Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of the Corporation
and shall deposit all such funds in the name of the Corporation in such banks or
other depositories as shall be selected by the Board of Directors. He shall upon
request exhibit at all reasonable times his books of account and records to any
of the Directors of the Corporation during business hours at the office of the
Corporation where such books and records shall be kept; shall render upon
request by the Board of Directors a statement of the condition of the finances
of the Corporation at any meeting of the Board of Directors or at the annual
meeting of the shareholders; shall receive, and give receipt for, moneys due and
payable to the Corporation from any source whatsoever; and in general, shall
perform all duties incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the President or the Board of
Directors. The Treasurer shall give such bond, if any, for the faithful
discharge of his duties as the Board of Directors may require.
Section 12. Secretary. The Secretary shall keep or cause to be
kept in the books provided for that purpose the minutes of the meetings of the
shareholders and of the Board of Directors; shall duly give and serve all
notices required to be given in accordance with the provisions of these Bylaws
and by the Act; shall be custodian of the records and of the seal of the
Corporation and see that the seal is affixed to all documents, the execution of
which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these Bylaws; and, in general, shall perform
all duties incident to the office of Secretary and such other duties as may,
from time to time, be assigned to him by the President or the Board of
Directors.
Section 13. Salaries. The salaries of the principal officers
shall be fixed from time to time by the Board of Directors, and the salaries of
any subordinate officers may be fixed by the President.
Section 14. Voting Corporation's Securities. Unless otherwise
ordered by the Board of Directors, the Chairman of the Board, the President and
Secretary, and each of them, are appointed attorneys and agents of the
Corporation, and shall have full power and authority in the name and on behalf
of the Corporation, to attend, to act, and to vote all stock or other securities
entitled to be voted at any meetings of security holders of corporations, or
associations in which the Corporation may hold securities, in person or by
proxy, as a stockholder or otherwise, and at such meetings shall possess and may
exercise any and all rights and powers incident to the ownership of such
securities, and which as the owner thereof the Corporation might have possessed
and exercised, if present, or to consent in writing to any action by any such
other corporation or association. The Board of Directors by resolution from time
to time may confer like powers upon any other person or persons.
ARTICLE VII
Indemnification
Section 1. Indemnification of Directors, Officers, Employees
and Agents. Every person who is or was a Director, officer, employee or agent of
this Corporation or of any other corporation for which he is or was serving in
any capacity at the request of this Corporation shall be indemnified by this
Corporation against any and all liability and expense that may be incurred by
him in connection with or resulting from or arising out of any claim, action,
suit or proceeding, provided that such person is wholly successful with respect
thereto or acted in good faith in what he reasonably believed to be in or not
opposed to the best interest of this Corporation or such other corporation, as
the case may be, and, in addition, in any criminal action or proceeding in which
he had no reasonable cause to believe that his conduct was unlawful. As used
herein, "claim, action, suit or proceeding" shall include any claim, action,
suit or proceeding (whether brought by or in the right of this Corporation or
such other corporation or otherwise), civil, criminal, administrative or
investigative, whether actual or threatened or in connection with an appeal
relating thereto, in which a Director, officer, employee or agent of this
Corporation may become involved, as a party or otherwise,
(i) by reason of his being or having been a Director, officer,
employee, or agent of this Corporation or such other
corporation or arising out of his status as such or
(ii) by reason of any past or future action taken or not taken by him
in any such capacity, whether or not he continues to be such at
the time such liability or expense is incurred.
The terms "liability" and "expense" shall include, but shall not be limited to,
attorneys' fees and disbursements, amounts of judgments, fines or penalties, and
amounts paid in settlement by or on behalf of a Director, officer, employee, or
agent, but shall not in any event include any liability or expenses on account
of profits realized by him in the purchase or sale of securities of the
Corporation in violation of the law. The termination of any claim, action, suit
or proceeding, by judgment, settlement (whether with or without court approval)
or conviction or upon a plea of guilty or of nolo contendere, or its equivalent,
shall not create a presumption that a Director, officer, employee, or agent did
not meet the standards of conduct set forth in this paragraph.
Any such Director, officer, employee, or agent who has been wholly
successful with respect to any such claim, action, suit or proceeding shall be
entitled to indemnification as a matter of right. Except as provided in the
preceding sentence, any indemnification hereunder shall be made only if
(i) the Board of Directors acting by a quorum consisting of Directors
who are not parties to or who have been wholly successful with
respect to such claim, action, suit or proceeding shall find that
the Director, officer, employee, or agent has met the standards
of conduct set forth in the preceding paragraph; or
(ii) independent legal counsel shall deliver to the Corporation their
written opinion that such Director, officer, employee, or agent
has met such standards of conduct.
If several claims, issues or matters of action are involved, any such
person may be entitled to indemnification as to some matters even though he is
not entitled as to other matters.
The Corporation may advance expenses to or, where appropriate,
may at its expense undertake the defense of any such Director, officer,
employee, or agent upon receipt of an undertaking by or on behalf of such person
to repay such expenses if it should ultimately be determined that he is not
entitled to indemnification hereunder.
The provisions of this Section shall be applicable to claims,
actions, suits or proceedings made or commenced after the adoption hereof,
whether arising from acts or omissions to act during, before or after the
adoption hereof.
The rights of indemnification provided hereunder shall be in
addition to any rights to which any person concerned may otherwise be entitled
by contract or as a matter of law and shall inure to the benefit of the heirs,
executors and administrators of any such person.
The Corporation may purchase and maintain insurance on behalf of any
person who is or was a Director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation against any liability asserted against
him and incurred by him in any capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this Section or otherwise.
ARTICLE VIII
Amendments
Except as expressly provided herein or in the Articles of
Incorporation, the Board of Directors may make, alter, amend or repeal these
Bylaws by an affirmative vote of a majority of the actual number of Directors
elected and qualified.