UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-13888
CHEMUNG FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-1237038
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
One Chemung Canal Plaza, Elmira, NY 14902
(Address of principal executive offices) (Zip Code)
(607) 737-3711
(Registrant's telephone number, including area code)
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 XX NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of June 30, 1997:
Common Stock, $5 par value -- outstanding 2,072,214 shares
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flow 3
Notes to Condensed Consolidated Financial
Statements 4
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K 12
All other items required by Part II are either inapplicable
or would require an answer which is negative.
SIGNATURES 34
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30 Dec. 31
1997 1996
ASSETS
Cash and due from banks $ 32,915,887 $ 31,103,374
Int.-bearing deposits with other financial inst. 1,133,205 151,920
Federal funds sold 2,500,000 500,000
Securities held to maturity, fair value of
$6,708,318 in 1997 and $10,351,440 in 1996 6,708,324 10,351,840
Securities available for sale, at fair value 187,547,247 185,365,478
Loans, net of unearned income and deferred fees296,915,409 283,720,981
Allowance for loan losses (4,024,253) (3,975,000)
Loans, net 292,891,156
279,745,981
Bank premises and equipment, net 9,488,252 9,712,633
Intangible assets,
net of accumulated amortization 7,109,282 7,402,934
Other assets 8,824,080
7,878,811
Total assets $549,117,433
$532,212,971
LIABILITIES
Deposits: Non-interest bearing $ 86,492,302 $ 86,049,289
Interest bearing 370,998,965 353,600,054
Total deposits 457,491,266 439,649,343
Securities sold under agreement to repurchase 12,973,783 14,371,140
Long term borrowing 10,000,000 10,000,000
Other liabilities 10,436,550 12,072,289
Total liabilities 490,901,600 476,092,772
SHAREHOLDERS' EQUITY
Common Stock, $5.00 par value per share;
authorized 3,000,000 shares, issued: 2,150,067 10,750,335 10,750,335
Surplus 10,101,804 10,101,804
Retained earnings 35,702,107 33,885,269
Treasury stock, at cost (77,853 shares in 1997 and 1996)(1,925,118)(1,925,118)
Net unrealized gain on securities
available for sale, net of taxes 3,586,705 3,307,909
Total shareholders' equity 58,215,833 56,120,199
Total liabilities & shareholders' equity $549,117,433 $532,212,971
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
6 Months Ended 3 Months Ended
June. 30 June 30
INTEREST INCOME 1997 1996 1997 1996
Loans $13,043,587$12,344,509 $6,644,476$6,261,255
Securities 6,128,816 5,657,933 3,146,757 2,918,763
Federal funds sold 121,706 220,461 52,115 88,503
Interest bearing deposits 105,832 136,114 59,705 51,843
Total interest income 19,399,941 18,359,017 9,903,053 9,320,364
INTEREST EXPENSE
Deposits 7,262,102 7,081,687 3,774,074 3,663,527
Securities sold under agreement
to repurchase and funds borrowed 669,212 237,376 329,252 104,856
Total interest expense 7,931,315 7,319,063 4,103,327 3,768,383
Net interest income 11,468,62711,039,954 5,799,727 5,551,981
Provision for loan losses 450,000 300,000 250,000 150,000
Net interest income after
provision for loan losses11,018,62710,739,954 5,549,727 5,401,981
Realized gains-security trans., Net 31,544 384,152 31,544 0
Other operating income 3,384,510 3,130,720 1,714,211 1,597,753
Total other operating income3,416,0543,514,872 1,745,755 1,597,753
Other operating expenses 9,817,646 9,841,799 4,903,212 4,946,298
Income before income taxes 4,617,035 4,413,027 2,392,270 2,053,436
Income taxes 1,577,591 1,528,200 830,330 714,855
Net Income $3,039,444$2,884,827 $1,561,940$1,338,581
Net Income per Share $1.47 $1.39 $0.75 $0.64
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended
June 30
1997 1996
OPERATING ACTIVITIES
Net income $ 3,039,444 $ 2,884,827
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangible assets 293,651 293,652
Provision for loan losses 450,000 300,000
Provision for depreciation and amortization 760,268 728,930
Amortization of premiums and discounts on securities, net143,436 168,613
Gain on sales of securities, net (31,544) (384,152)
(Increase) decrease in other assets (945,268) (536,186)
Increase (decrease) other liabilities (1,697,905) 18,400
Net cash provided by operating activities 2,012,082 3,474,084
INVESTING ACTIVITIES
Proceeds from maturities of securities - AFS 14,551,871 23,840,554
Proceeds from maturities of securities -HTM 8,169,710 3,079,362
Proceeds from sales of securities - AFS 5,238,524 15,207,777
Purchases of securities - AFS (21,805,261) (51,400,518)
Purchases of securities - HTM (4,526,192) (7,108,301)
Purchases of premises and equipment, net (535,887) (555,257)
Loan originations, net of repayments
and other reductions (14,753,641) (16,512,850)
Proceeds from sales of student loans 1,158,466 1,175,546
Net cash used by investing activities (12,502,410) (32,273,687)
FINANCING ACTIVITIES
Net increase (decrease) in demand deposits,
NOW, savings and insured money markets 8,754,053 (6,928,195)
Net increase (decrease) in certificates of
deposit and individual retirement accounts 9,087,870 31,063,537
Net increase (decrease) in short term
borrowings (1,397,357) (4,786,168)
Sale of treasury shares 0 202,020
Purchase of treasury shares 0 (279,425)
Cash dividends paid (1,160,440) (1,041,615)
Net cash provided by financing activities 15,284,126 18,230,154
Net increase (decrease) in cash and
cash equivalents 4,793,798 (10,569,449)
Cash and cash equivalents at beginning of year 31,755,294 37,383,798
Cash and cash equivalents at end of period $36,549,092 $26,814,349
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
Chemung Financial Corporation (the Company) operates as a bank
holding company. Its only subsidiary is Chemung Canal Trust
Company (the Bank).The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary, the
Bank. All material intercompany accounts and transactions have
been eliminated in the consolidation.
2. The condensed consolidated financial statements included herein
reflect all adjustments which are, in the opinion of management,
of a normal recurring nature and necessary to present fairly the
Company's financial position as of June 30, 1997 and December 31,
1996, and results of operations and cash flows for the three and
six month periods ended June 30, 1997 and 1996.
3. Net income per share for the periods presented have been computed
by dividing net income by 2,072,214 weighted average shares
outstanding for June 30, 1997 and 2,081,988 weighted average
shares outstanding for June 30, 1996.
4. Goodwill, which represents the excess of purchase price over the
fair value of identifiable assets acquired, is being amortized
over 15 years on the straight-line method. Deposit base
intangible, resulting from the Bank's purchase of deposits from
the Resolution Trust Company in 1994, is being amortized over the
expected useful life of 15 years on a straight-line basis.
Amortization periods are monitored to determine if events and
circumstances require such periods to be reduced. Periodically,
the Company reviews its goodwill and deposit base intangible
assets for events or changes in circumstances that may indicate
that the carrying amount of the assets are not recoverable.
5. On June 28, 1996 the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 125
Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities. This statement provides accounting
and reporting standards for transfers and servicing of financial
assets and extinguishment of liabilities based on consistent
application of a financial-components approach that focuses on
control. The Company adopted SFAS No. 125 on January 1, 1997 and
there was no material impact on the Company's financial
statements.
The FASB issued SFAS No. 128 Earnings Per Share in February 1997
effective for periods ending after December 15, 1997. SFAS No.
128 was issued to simplify the computation of Earnings Per Share
(EPS) and to make the U.S. standard more compatible with the EPS
standards of other countries. Prior period EPS will be restated
after the effective date of this statement. The adoption of SFAS
No. 128 should have no effect on earnings per share as the Company
does not have a complex capital structure.
In June 1997, the FASB issued SFAS No. 130 Reporting Comprehensive
Income. SFAS No. 123 establishes standards for the reporting and
display of comprehensive income and its components in a full set
of general purpose financial statements. Comprehensive income is
defined as the change in equity of a business enterprise during a
period from transactions and other events and circumstances from
nonowner sources. The impact of adopting SFAS No. 130, which is
effective for the Company in 1998, has not been determined.
In June 1997, the FASB issued SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. SFAS No. 131
requires publicly-held companies to report financial and other
information about key revenue-producing segments of the entity for
which such information is available and is utilized by the chief
operation decision maker. Specific information to be reported for
individual segments includes profit or loss, certain revenue and
expense items and total assets. A reconciliation of segment
financial information to amounts reported in the financial
statements would be provided. SFAS No. 131 is effective for the
Company in 1998 and the impact of adoption has not been
determined.
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operation
Total assets at June 30, 1997 were $549.1 million, an increase of
$16.9 million (3.18%) from the beginning of the year.
The Available for Sale segment of the securities portfolio totaled
$187.5 million as compared to $185.4 million at the beginning of the year.
At amortized cost, increases in Municipal Bonds ($2.9 million) Federal
Agency Bonds ($1.6 million) and Mortgage Backed Securities ($1.1 million)
were somewhat offset by decreases in U.S. Treasury Notes ($3.1 million),
Corporate Bonds ($554 thousand) and Stocks ($203 thousand). The allowance
valuation for Available for Sale securities has increased by $451 thousand
since year end `96 highlighted by the strong performance of the Bank's
equity portfolio. The Held to Maturity segment of the portfolio consisting
primarily of Municipal obligations totaled $6.7 million at June 30, 1997
versus $10.4 million at the beginning of the year.
Amortized cost and fair value, maturity duration, and unrealized
gains and losses for the components in each of the Available for Sale and
Held to Maturity categories of the securities portfolio at June 30, 1997
are set forth in the following tables:
AVAILABLE FOR SALE HELD TO
MATURITY
Amortized Fair Amortized Fair
Cost Value Cost Value
U.S. Treasury and other
U.S. Govt. Agencies $103,021,741$102,740,414 $ - $ -
Mtg. Backed Securities 51,274,029 51,344,083 - -
Obligations of states and
Political subdivisions 23,196,189 23,362,244 6,631,668 6,631,668
Other bonds and notes 624,437 628,693 76,656 76,650
Corporate Stocks 3,458,982 9,471,813 - -
$181,575,378$187,547,247 $ 6,708,324 $ 6,708,318
The carrying value and weighted average yields based on amortized
cost by years to maturity for securities available for sale as of June 30,
1997 are as follows (excluding corporate stocks):
Maturing
Within One Year After One, Within Five
Amount Yield Amount Yield
U.S. Treasury and other
U.S. Government Agencies$ 9,566,4796.45% $ 68,899,545 6.35%
Mortgage Backed Securities - - - -
Obligations of states and
political subdivisions 5,106,773 4.67% 11,788,889 4.75%
Other bonds and notes 503,125 9.72% 125,568 7.32%
Total $ 15,176,377 5.96% $ 80,814,002 6.12%
Maturing
After Five, Within Ten After Ten Years
Amount Yield Amount Yield
U.S. Treasury and other
U.S. Government Agencies$ 24,274,3907.12% $ - -
Mortgage Backed Securities 4,022,219 6.69% 47,321,864 7.82%
Obligations of states and
political subdivisions 6,192,029 4.74% 274,553 4.90%
Other bonds and notes - - - -
Total $ 34,488,638 6.63% $ 47,596,417 7.81%
Mortgage-backed securities are expected to have shorter average lives
than their contractual maturities as shown above, because borrowers may
repay obligations with or without call or prepayment penalties.
The amortized cost and weighted average yields by years to maturity
for securities held to maturity as of June 30, 1997 are as follows:
Maturing
Within One Year After One, Within Five
Amount Yield Amount Yield
Obligations of states and
political subdivisions $ 4,249,484 4.04% $ 1,675,887 5.22%
Other bonds and notes 5,000 5.50% - -
Total Bonds $ 4,254,484 4.04% $ 1,675,887 5.22%
Maturing
After Five, Within Ten After Ten Years
Amount Yield Amount Yield
Obligations of states and
political subdivisions $ 706,297 6.66% $ - -
Other bonds and notes 71,656 8.25 - -
Total $ 777,953 6.81% $ - -
There are no securities of a single issuer (other than securities of
the U.S. Government and its agencies) that exceed 10% of shareholders
equity at June 30, 1997 in either the Available for Sale or Held to
Maturity categories.
Gross unrealized gains and gross unrealized losses on securities
Available for Sale and Held to Maturity were as follows:
AVAILABLE FOR SALE HELD TO MATURITY
Unrealized Unrealized UnrealizedUnrealized
Gains Losses Gains Losses
U.S. Treasury and other
U.S. Govt. Agencies $ 394,144 $675,471 $ - $ -
Mtg. Backed Securities 242,320 172,267 - -
Obligations of states and
Political subdivisions 199,319 33,264 - -
Other bonds and notes 4,256 - - 6
Corporate Stocks 6,012,832 - - -
$6,852,871 $881,002 $ - $ 6
Realized net gains on sales of securities Available for Sale for the
six-month period ended June 30, 1997 were $31,544.
Included in the Corporate Stocks component in the above tables are
15,833 shares of Student Loan Marketing Association ("Sallie Mae") at a
cost basis of $5,069 and fair value of $2,010,791. These shares were
acquired as preferred shares (a permitted exception to the U.S. Government
regulation banning bank ownership of equity securities) in the original
capitalization of the U.S. Government Agency . Later, the shares were
converted to common stock as Sallie Mae recapitalized. Additionally, at
June 30, 1997, the bank's equity portfolio held listed securities totaling
$89,540 at cost with a total fair value of $4,074,580. These shares were
acquired prior to the enactment of the Banking Act of 1933. Other equities
included in the Bank portfolio are 9,964 shares of Federal Reserve Bank and
17,972 shares of the Federal Home Loan Bank of New York valued at $498,200
and $1,797,200 respectively. Management has no current plans for selling
these securities.
Total loan balances have increased $13.2 million or 4.65% since the
beginning of the year. Approximately 88% of this increase is in the
business loan segment of our portfolio which has increased $11.6 million
(12.48%). The growth in this segment of our loans is in large part due to
the purchase of an $8.4 million block of loans during the second quarter.
The consumer loans segment of the loan portfolio has increased $2.2 million
(1.92%) since the beginning of the year due to the continued steady growth
in our indirect auto lending program. The growth we have seen in this area
($2.8 million) has been somewhat offset by declines in our home equity and
credit card portfolios of $589 thousand and $190 thousand respectively.
Mortgage balances have declined $566 thousand thusfar this year with the
mortgage portfolio having been influenced by the payoff during the second
quarter of three large mortgages totaling approximately $1.2 million. With
the introduction during the second quarter of a new term home equity
product as well as ongoing promotion of both our mortgage and credit card
products, we look forward to increased levels of activity in these areas.
Total deposits at June 30, 1997 were $457.5 million as compared to
$439.6 million at the beginning of the year, a $17.8 million or 4.06%
increase. Public fund balances at June 30, 1997 were $2.4 million higher
than balances maintained at December 31, 1996, while other "Core Deposit"
accounts have increased by $15.4 million.
Net earnings for the second quarter were $1.562 million as compared to
$1.339 million for the second quarter of 1996, a $223 thousand or 16.69%
increase. Net earnings per share for the quarter increased by $0.11 or
17.19% when compared to last year. Strong second quarter results as
compared with last year are due to several factors. Net Interest Income
after the Provision for Loan Losses was $148 thousand higher despite the
second quarter provision being $100 thousand greater than last year.
During the second quarter of this year realized gains from the sale of
Available for Sale securities totaled $32 thousand. No gains were realized
during the second quarter of 1996. Additionally, other operating income
increased by $116 thousand while other operating expenses were $43 thousand
less than last year.
Net earnings for the six month period ended June 30, 1997 were $3.039
million, a $155 thousand or 5.36% increase over last years six month
results. Net earnings per share for the six month period were $1.47 versus
$1.39 the prior year, an increase of $0.08 (5.76%) on 9,774 fewer average
shares outstanding. Earnings growth thusfar in 1997 is more impressive
when the fact that the 1996 earnings included approximately $230 thousand
or $0.11 per share in net after tax realized gains on the sale of Available
for Sale securities as compared to $19 thousand or $0.01 per share in after
tax securities gains taken thusfar in 1997 is taken into account.
Excluding securities gains all other net operating earnings for the first
six months of 1997 are $366 thousand or 13.78% ahead of last year.
Earnings for the first six months have been positively impacted by a $279
thousand increase in Net Interest Income despite a $150 thousand increase
in the Provision for Loan Losses. This is reflective of the fact that
average earning assets year to date have increased by $24.5 million, $21.6
million of this increase in the loan portfolio. In addition to the above,
other operating income has increased by $254 thousand or 8.11% while other
operating expenses are $24 thousand or 0.25% lower than at this time last
year.
As indicated on the Condensed Consolidated Statement of Cash Flows,
cash and cash equivalents have increased $4.8 million since year end 1996.
The primary source of cash during the six month period ended June 30, 1997
have been proceeds from the sales and maturity of securities ($28.0
million), an increase in deposit accounts ($17.8 million) and net cash
provided by operating activities ($2.0 million). Cash proceeds generated
from the above have been used primarily to fund purchases of securities
($26.3 million), net loan originations ($14.8 million), net investment in
fixed assets ($536 thousand) and cash dividends ($1.2 million), with excess
funds invested in overnight Fed Funds and interest bearing deposits.
During the quarter and through the first six months of this year there
have been no treasury share transactions. During the second quarter, the
Company declared a cash dividend of $0.31 per share, representing a 10.71%
increase over the previous quarterly dividend of $0.28 per share. Also
during the second quarter, the Bank paid a special dividend of $2.5 million
up to the holding company with these funds to be used for future investment
purposes.
Based upon loan growth, past experience, as well as an ongoing review
of the risk inherent in our loan portfolio, management has increased the
loan loss provision for the first six months from $300 thousand to $450
thousand. At June 30, 1997 the Allowance for Loan Losses represents 282%
of non-performing loans and 1.36% of total loans. Non-performing loans at
June 30, 1997 constituted 0.48% of total loans.
Changes in the allowance for loan losses for the six months ended June
30, 1997 is as follows:
June 30, 1997
Amount (000's)
Balance at beginning of period $ $ 3,975
Charge-offs:
Domestic:
Commercial, financial and agricultural 60
Commercial mortgages 53
Residential mortgages 0
Consumer loans 331 $ 444
Recoveries:
Domestic:
Commercial, financial and agricultural $ 7
Commercial mortgages 0
Residential mortgages 0
Consumer loans 36
$ 43
Net charge-offs $ 401
Additions charged to operations 450
Balance at end of period $ 4,024
Ratio of net charge-offs during the period
to average loans outstanding during the period .14%
Included in the allowance for loan losses at June 30, 1997 is an
allowance for impaired loans of $254 thousand versus $341 thousand at the
beginning of the year. Management distinguishes between impaired and non-
accrual loans as follows:
Impaired Loans - A loan would be considered impaired when it is probable
that after having considered current information and events regarding the
borrower's ability to repay their obligations, the corporation will be
unable to collect all amounts due according to the contractual terms of the
loan agreement.
Non-Accrual Loans - A loan is placed on non-accrual when it becomes past
due and is referred to legal counsel, or in the case of a commercial loan
which becomes 90 days delinquent, or in the case of a consumer loan (not
guaranteed by a government agency) or a real estate loan which becomes 120
days delinquent unless, because of collateral or other circumstances, it is
deemed to be collectible. When placed on non-accrual, previously accrued
interest is reversed. Loans may also be placed in non-accrual if
management believes such classification is warranted for other reasons.
At June 30 31, 1997, the allocation of the allowance for loan losses
is as follows:
Reported Period
June 30, 1997
Balance at end of period
applicable to:
Percent of Loans in each
Amount Category to Total Loans
Domestic:
Commercial, financial
and agricultural 1,834,531 34.86%
Commercial mortgages 141,234 2.49%
Residential mortgages 31,680 23.70%
Consumer loans 518,456 38.95%
Unallocated: 1,498,352 N/A
Total $4,024,253 100.00%
For the periods ended June 30, 1997 and December 31, 1996, the
following table summarized the Company's non-accrual and past due loans:
Amounts (000's)
June 30, 1997 December 31, 1996
Non-accrual loans $ 922 $1,494
Accruing loans past due$ 503 $ 226
90 days or more
At June 30, 1997, the Company has no commercial loans for which
payments are presently current but the borrowers are currently experiencing
severe financial difficulties. At June 30, 1997, no loan concentrations to
borrowers engaged in the same or similar industries exceeded 10% of total
loans and the Corporation has no interest-bearing assets other than loans
that meet the non-accrual, past due, restructured or potential problem loan
criteria.
On June 30, 1997, the Company consolidated leverage ratio was 8.93%.
The Tier I and Total Risk Adjusted Capital ratios were 15.55% and 16.80%,
respectively.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Applicable Exhibits
(3.1) Certificate of Incorporation is filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-14,
Registration No. 2-95743, and is incorporated herein by
reference.
Certificate of Amendment to the Certificate of Incorporation,
filed with the Secretary of State of New York on April 1,
1988, is incorporated herein by reference to Exhibit A of
the registrant's Form 10-K for the year ended December 31,
1988, File No. 0-13888.
(3.2) Bylaws of the Registrant, as amended to April 9, 1997.
Exhibit A
(27) Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K
During the quarter ended June 30, 1997, no reports on Form
8-K or amendments to any previously-filed Form 8-K were
filed by the registrant.
FORM 10 - Q
QUARTERLY REPORT
EXHIBIT INDEX
FOR PERIOD ENDING JUNE 30, 1997
CHEMUNG FINANCIAL CORPORATION
ELMIRA, NEW YORK
EXHIBIT A Amended Bylaws Effective April 9, 1997
(A copy of the Bylaws exhibit filed with the
Securities and Exchange Commission may be obtained
upon request by writing to the registrant's
Corporate Secretary.)
CHEMUNG FINANCIAL CORPORATION
BY-LAWS
Amended to April 9, 1997
ARTICLE I
Offices
SECTION 1. Principal Office
The principal office of the corporation shall be located in the City
of Elmira, County of Chemung and State of New York.
SECTION 2. Other Offices
The corporation may also have such other offices, either within or
without the State of New York, as the Board of Directors may from time to
time determine or the business of the corporation may require.
ARTICLE II
Shareholders
SECTION 1. Place of Meetings of Shareholders
Meetings of shareholders may be held at such place, within or without
the State of New York, as may be fixed by the Board of Directors.
SECTION 2. Annual Meeting of Shareholders
A meeting of shareholders shall be held annually on such date and at
such place and time as may be fixed by the Board of Directors for the
election of directors and the transaction of other business.
SECTION 3. Special Meetings of Shareholders
Special meetings of the shareholders may be called by the Board of
Directors or by the chairman of the board or by the president. Such call
shall state the purpose or purposes of the proposed meeting. Business
transacted at any special meeting shall be confined to the purpose or
purposes for which the meeting is called.
SECTION 4. Fixing Record Date
The Board of Directors may fix, in advance, a date as the record date
for purpose of determining the shareholders entitled to notice of or to
vote at any meeting of shareholders or any adjournment thereof, or to
express consent to or dissent from any proposal without a meeting, or for
the purpose of determining shareholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of any other
action. Such date shall be not more than fifty (50) nor less than ten (10)
days before the date of such meeting nor more than 50 days before any other
action. If no record date is fixed, the record date for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day next preceding
the day on which notice is given and for all other purposes shall be at the
close of business on the day on which the resolution of the Board of
Directors relating thereto is adopted.
SECTION 5. Notice of Meetings of Shareholders
Written notice of every meeting of shareholders shall state the place,
date and hour of the meeting and unless it is the annual meeting, indicate
that it is being issued by or at the direction of the person or persons
calling the meeting. Notice of a special meeting shall also state the
purpose or purposes for which the meeting is called. If, at any meeting,
action is proposed to be taken which would, if taken, entitle shareholders
fulfilling the statutory requirements to receive payment for their shares,
the notice of such meeting shall include a statement of that purpose and to
that effect. A copy of the notice of any meeting shall be given,
personally or by mail, not less than ten (10) nor more than fifty (50) days
before the date of the meeting, to each shareholder entitled to vote at
such meeting. If mailed, such notice shall be deemed given when deposited
in the United States mail, with postage thereon prepaid, directed to the
shareholder at his address as it appears on the record of shareholders or,
if he shall have filed with the secretary of the corporation a written
request that notices to him be mailed to some other address, then directed
to him at such other address.
SECTION 6. Adjourned Meetings
When a determination of shareholders entitled to notice of or to vote
at any meeting of shareholders has been made, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting. When a meeting is adjourned to
another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken, and at the
adjourned meeting the corporation may transact any business that might have
been transacted on the original date of the meeting. However, if after the
adjournment the Board of Directors fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder of record on the new record date entitled to notice.
SECTION 7. List of Shareholders at Meeting
A list of shareholders as of the record date, certified by the
secretary or by the transfer agent, shall be produced at any meeting of
shareholders upon the request thereat or prior thereto of any shareholder.
If the right to vote at any meeting is challenged, the inspectors of
election, or person presiding thereat, shall require such list of
shareholders to be produced as evidence of the right of the persons
challenged to vote at such meetings, and all persons who appear from such
list to be shareholders entitled to vote thereat may vote at such meeting.
SECTION 8. Quorum of Shareholders
The holders of a majority of the shares entitled to vote thereat shall
constitute a quorum at a meeting of shareholders for the transaction of any
business. When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any shareholders. Despite the
absence of a quorum, the shareholders present may adjourn the meeting.
SECTION 9. Proxies
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person
or persons to act for him by proxy. Every proxy must be signed by the
shareholder or his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of
the shareholder executing it, except in those cases where an irrevocable
proxy is provided by law.
SECTION 10. Inspectors at Shareholders Meetings
The Board of Directors, in advance of any shareholders meeting, may
appoint one or more inspectors to act at the meeting or any adjournment
thereof. If inspectors are not so appointed, the person presiding at a
shareholders meeting may, and on the request of any shareholder entitled to
vote thereat shall, appoint inspectors. If appointed on the request of one
or more shareholders, the holders of a majority of shares present and
entitled to vote thereat shall determine the number of inspectors to be
appointed. In case any person appointed fails to appear or act, the
vacancy may be filled by appointment made by the Board of Directors in
advance of the meeting or at the meeting by the person presiding thereat.
Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence
of a quorum, the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions
arising in connection with the right to the result, and do such acts as are
proper to conduct the election or vote with fairness to all shareholders.
On request of the person presiding at the meeting or any shareholder
entitled to vote thereat, the inspectors shall make a report in writing of
any challenge, question or matter determined by them and execute a
certificate of any fact found by them. A report or certificate made by
them shall be prima facie evidence of the facts stated and of the vote as
certified by them.
SECTION 11. Qualifications of Voters
Every shareholder of record shall be entitled at every meeting of
shareholders to one vote for every share standing in his name on the record
of shareholders.
Neither treasury shares nor shares held by another domestic or foreign
corporation of any type or kind, if a majority of the shares entitled to
vote in the election of directors of such other corporation is held by the
corporation, shall be voted at any meeting or counted in determining the
total number of outstanding shares.
Shares held by an administrator, executor, guardian, conservator,
committee, or other fiduciary, except a trustee, may be voted by him,
either in person or by proxy, without transfer of such shares into his
name. Shares held by a trustee may be voted by him, either in person or by
proxy, only after the shares have been transferred into his name as trustee
or into the name of his nominee.
Shares held by or under the control of a receive may be voted by him
without the transfer thereof into his name if authority so to do is
contained in an order of the court by which such received was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
or a nominee of the pledgee.
Shares standing in the name of another domestic or foreign corporation
of any type or kind may be voted by such officer, agent or proxy as the
By-Laws of such corporation may provide or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
SECTION 12. Vote of Shareholders
Directors shall, except as otherwise required by law, be elected by a
plurality of the votes cast at a meeting of shareholders by the holders of
shares entitled to vote in the election. Any other corporate action by
vote of the shareholders shall, except as otherwise required by law, these
By-Laws or the certificate of incorporation, be authorized by a majority of
the votes cast at a meeting of shareholders by the holders of shares
entitled to vote thereon.
SECTION 13. Conduct of Shareholders' Meetings
The Officer presiding over the shareholders' meeting may establish
such rules and regulations for the conduct of the meeting as the presiding
Officer may deem to be reasonably necessary or desirable for the orderly
and expeditious conduct of the meeting.
SECTION 14. Shareholder Proposals
No shareholder shall be entitled to submit a proposal to a meeting of
shareholders unless at the time of submitting the proposal, the shareholder
shall be a record or beneficial owner of at least 1% or $1,000 in market
value of shares entitled to be voted at the meeting, and shall have held
such shares for at least one year and shall continue to own such shares
through the date on which the meeting is held. A shareholder meeting the
above requirements shall deliver to the secretary of the corporation not
later than 120 days prior to the date on which the corporation's proxy
statement was mailed to stockholders in connection with the previous year's
annual meeting, the text of any proposal which he intends to propose at an
annual meeting of shareholders and a notice of the intention of the
shareholder to present such proposal at the meeting. A proposal to be
presented at any meeting of shareholders other than an annual meeting shall
be delivered to the secretary a reasonable time before the mailing of the
corporation's proxy material.
ARTICLE III
Directors
SECTION 1. Board of Directors
The business of the corporation shall be managed under the direction
of its Board of Directors.
SECTION 2. Qualifications of Directors
Each director shall be at least 18 years of age and shall
automatically cease to be a director on the last day of the month during
which he or she attains the age of seventy-two (72) years. At the time of
taking an office, each director shall be a stockholder of the corporation
owning in his or her own right, free from pledge, lien or charge, the
number of shares of capital stock of the corporation while each director of
a New York bank or trust company is required to own in such bank or trust
company or a holding company of such bank or trust company by the New York
State Banking law. If a director shall cease to own the required number of
shares, he or she automatically ceases to be a director of the corporation
and his or her office shall be vacant, and he or she shall not be eligible
for re-election as a director for a period of one year from the date of the
next succeeding annual meeting of stockholders of the corporation.
SECTION 3. Number of Directors
The number of directors constituting the entire Board shall be
nineteen (19). This number may be increased or decreased from time to time
by amendment of these By-Laws, provided, however, that the number may not
be decreased to less than three (3). No decrease in the number of
directors shall shorten the term of any incumbent director.
SECTION 4. Election and Term of Directors
The directors shall be classified by the Board of Directors with
respect to the time for which they severally hold office, into three
classes, as nearly equal in number for a term of one (1) year, the second
class shall be originally elected for a term of two (2) years, and the
third class shall be originally elected for a term of three (3) years, with
the directors of each class to hold office until their successors are
elected and qualified. Newly created directorships resulting from an
increase in the number of directors shall be classified by the Board of
Directors when the directorship is created. At each annual meeting of the
stockholders of the corporation, the successors of the class of directors
whose terms expire at that meeting shall be elected to hold office for a
term expiring at the annual meeting of stockholders held in the third year
following the year of their election or until their successors are elected
and have qualified.
SECTION 5. Nominations for Directors
Nominations of candidates for election as directors of the corporation
at any meeting of stockholders called for the election of directors may be
made by the Board of Directors or by
any stockholder entitled to vote at such meeting. Nominations made by the
Board of Directors shall be made at a meeting of the Board of Directors, or
by written consent of directors in lieu of a meeting, not later than 60
days prior to the date of any meeting of stockholders called for the
election of directors. The secretary of the corporation shall request that
each such proposed nominee provide the corporation with such information
concerning himself as is required, under the rules of the Securities and
Exchange Commission, to be included in the corporation's proxy statement
soliciting proxies for his election as a director. Any stockholder who
intends to make a nomination at any annual meeting of stockholders shall
deliver to the secretary of the corporation not later than 120 days prior
to the date on which the corporation's proxy statement was mailed to
stockholders in connection with the previous year's annual meeting, or if
such nomination is to be made at a meeting of shareholders other than an
annual meeting, a reasonable time before the mailing of the corporation's
proxy material, a notice setting forth (i) the name, age, business address
and residence address of each nominee proposed in such notice, (ii) the
principal occupation or employment of each such nominee, (iii) the number
of shares of capital stock of the corporation which are owned of record and
beneficially by each such nominee and (iv) such other information
concerning each such nominee as would be required, under the rules of the
Securities and Exchange Commission, in a proxy statement soliciting proxies
for the election of such nominees. Such notice shall include a signed
consent of such nominee to serve as a director of the corporation, if
elected. In the event that a person is validly designated as a nominee in
accordance with the provisions of this section and shall thereafter become
unable or unwilling to stand for election to the Board of Directors, the
Board of Directors or the stockholder who proposed such nominee, as the
case may be, may designate a substitute nominee. If the secretary of the
meeting of stockholders called for the election of directors determines
that a nomination was not made in accordance with the foregoing procedures,
such nomination shall be void.
SECTION 6. Newly Created Directorships and Vacancies
Newly created directorships resulting from an increase in the number
of directors and vacancies occurring in the Board of Directors for any
reason may be filled by vote of a majority of the directors then in office,
although less than a quorum exists. A director elected to fill a newly
created directorship or a vacancy, shall be elected to hold office until
the next meeting of shareholders at which the election of directors is in
the regular order of business, and until his successor has been elected and
qualified.
SECTION 7. Removal of Directors
Any director, an entire class of directors or the entire Board of
Directors may be removed from office, with or without cause, only by the
affirmative vote of the holders of at least 75% of the outstanding shares
of stock of the corporation entitled to vote generally in the election of
directors, voting together as a single class.
SECTION 8. Quorum of Directors
One-third (1/3) of the entire Board of Directors or seven directors,
whichever number is greater, shall constitute a quorum for the transaction
of business or of any specified item of business.
SECTION 9. Action by the Board of Directors
The vote of the majority of the directors present at a meeting of the
Board of Directors at the time of the vote, if a quorum is present at such
time, shall, except as otherwise provided by law, these By-Laws or the
certificate of incorporation, be the act of the Board of Directors.
SECTION 10. Written Consent of Directors Without A Meeting
Any action required or permitted to be taken by the Board of Directors
or a committee thereof may be taken without a meeting if all members of the
Board or the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by
the members of the board or committee shall be filed with the minutes of
the proceedings of the Board or committee.
SECTION 11. Place and Time of Meetings of Board of Directors
Meetings of the Board of Directors, regular or special, may be held at
any place, within or without the State of New York and at any time, fixed
by the Board of Directors or by the person or persons calling the meeting.
Such meetings may be held by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting
to hear each other at the same time.
SECTION 12. Notice of Meetings of the Board of Directors
Regular meetings of the Board of Directors may be held without notice
if the time and place of such meetings are fixed by the Board of Directors.
Special meetings of the Board of Directors shall be held upon notice to the
directors and may be called by the chairman of the board, the president,
the executive vice president, or any two directors. The notice shall be
given personally including by telephone or mail, telegram, cable or other
public instrumentality. If given personally or by telephone, such notice
shall be given not less than 48 hours before the meeting to each director.
If given by mail, cable, telegram or other public instrumentality, such
notice shall be given not less than five (5) days before the date of the
meeting, to each director. Such notice shall be deemed given, if mailed,
when deposited in the United States mail, with postage thereon prepaid or,
if telegraphed, cabled or sent by other public instrumentality, when given
to the telegraph company, cable company, or other public instrumentality,
directed to the director at his business address or, if he shall have filed
with the secretary of the corporation, a written request that notices to
him be mailed or telegraphed, cabled or sent to some other address, then
directed to him at such other address. The notice need not specify the
purpose of any regular or special meeting of the Board of Directors.
SECTION 13. Interested Directors
No contract or other transaction between a corporation and one or more
of its directors, or between a corporation and any other corporation, firm,
association or other entity in which one or more of its directors, or
officers, are directors or have a substantial financial interest, shall be
either void or voidable for this reason alone or by reason alone that such
director or directors are present at the meeting of the Board, or of a
committee thereof, which approves such contract or transaction or that his
or their votes are counted for such purpose:
1. If the material facts as to such director's interest in such contract
or transaction and as to any such common directorship, officership or
financial interest are disclosed in good faith or known to the Board or
committee, and the Board or committee approves such contract or transac-
tion by a vote sufficient for such purpose without counting the vote of
such interested director or, if the votes of the disinterested directors
are insufficient to constitute an act of the Board as defined in Section
9 of this Article, by unanimous vote of the disinterested directors; or
2. If the material facts as to such director's interest in such contract
or transaction and as to any such common directorship, officership or
financial interest are disclosed in good faith or known to the sharehold-
ers entitled to vote thereon, and such contract or transaction is
approved vote of such shareholders; or
3. If the contract or transaction is affirmatively established by the
party or parties thereto to be fair and reasonable as to the corporation
at the time it was approved by the Board, a committee thereof, or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board or a committee thereof which
approves such contract or transaction.
The Board of Directors shall have authority to fix the compensation of
directors for services in any capacity.
A loan shall not be made by the corporation to any director unless it
is authorized by vote of the shareholders. For this purpose, the shares of
the director who would be the borrower shall not be shares entitled to
vote.
SECTION 14. Reimbursement and Compensation of Directors
The directors may be paid their expenses of attendance at each meeting
of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as director. No
such payment shall preclude any director from serving the corporation in
any other capacity and receiving compensation therefor. Members of the
executive committee or other committees may be allowed similar
reimbursement and compensation for their services as such.
SECTION 15. Executive Committee and Other Committees
The Board of Directors by resolution adopted by a majority of the
entire Board, may designate from among its members an executive committee
and other committees, each consisting of three or more directors, and each
of which shall have and may exercise such powers as shall be conferred or
authorized by the resolution appointing it, except that no such committee
shall have authority as to the following matters:
1. The submission to shareholders of any action that needs shareholders'
approval;
2. The filling of vacancies in the Board of Directors or in any
committee:
3. The fixing of compensation of the directors for serving on the Board
of Directors or on any committee;
4. The amendment or repeal of the By-Laws or the adoption of new By-Laws;
5. The amendment or repeal or any resolution of the Board of Directors.
Each such committee shall serve at the pleasure of the Board. The
Board of Directors shall have the power at any time to fill vacancies in,
to change the size or membership of, and to discharge any such committee.
A majority of any such committee may determine its action and may fix
the time and place of its meetings, unless provided otherwise by the Board
of Directors. Each such committee shall keep a written record of its acts
and proceedings and shall submit such record to the Board of Directors at
each regular meeting thereof and at such other times as requested by the
Board of Directors. Failure to submit such record, or failure of the Board
to approve any action indicated therein will not, however, invalidate such
action to the extent it has been carried out by the corporation prior to
the time the record of such action was, or should have been, submitted to
the Board of Directors as herein provided.
ARTICLE IV
Officers
SECTION 1. Number
The Board of Directors may elect a chairman of the board who shall be
a member of the Board of Directors and shall elect a president, one or more
vice presidents, a secretary and a treasurer, who need not be members of
the Board of Directors and such other officers and assistant officers who
need not be members of the Board of Directors as the Board of Directors may
from time to time deem proper. Any two or more offices may be held by the
same person, except the offices of president and secretary.
SECTION 2. Election and Term of Office
The officers of the corporation to be elected or appointed by the
Board of Directors shall be elected or appointed annually by the Board of
Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. Subject to the provisions of Section 3
of this Article, each officer shall hold office until the first meeting of
the Board of Directors following the next annual meeting of shareholders
and until his successor has been elected or appointed and qualified.
SECTION 3. Removal
Any officer or agent elected or appointed by the Board of Directors
may be removed by the Board of Directors with or without cause, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed. The election or appointment of an officer shall not of
itself create contract rights.
SECTION 4. New Offices and Vacancies
Newly created offices and vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled from
time to time by the Board of Directors for the unexpired portion of the
term.
SECTION 5. Chief Executive Officer
The Board of Directors shall appoint either the chairman of the board,
if any, or the president the chief executive officer of the corporation
("the CEO") who, subject to the control of the Board of Directors, shall
direct and control all the business and affairs of the corporation.
SECTION 6. Chairman of the Board
The chairman of the board, if any, and if so designated by the Board
of Directors, shall be the chief executive officer of the corporation and,
subject to the control of the Board of Directors, shall in general perform
all duties incident to the office of chief executive officer. He shall,
when present, preside at all meetings of the shareholders and of the Board
of Directors. He may sign, with the secretary or any other proper officer
of the corporation thereunto authorized by the Board of Directors,
certificates representing shares of the corporation, any deeds, mortgages,
bonds, contracts or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
By-Laws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed; and shall perform such
other duties as may be prescribed by the Board of Directors from time to
time.
SECTION 7. President
The president shall be the chief operating officer of the corporation
and, subject to the control of the Board of Directors and the chairman of
the board (if he is the CEO), shall direct the conduct and operation of the
business and properties of the corporation. If so designated by the Board
of Directors, he shall also be the chief executive officer of the
corporation and shall perform all duties incident to that office. He
shall, in the absence of the chairman of the board, preside at all meetings
of the shareholders and of the Board of Directors. He may sign, with the
secretary or any other proper officer of the corporation thereunto
authorized by the Board of Directors, certificates representing shares of
the corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board of Directors or by these By-Laws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and shall perform such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 8. Vice President
In the absence of the chairman of the board and the president or in
the event of their death or inability to act, the executive vice president
(or in the event of the death or inability to act of the executive vice
president, the vice president designated by the Board of Directors, if any,
or if none, the vice president having the greatest seniority) shall perform
the duties of the chairman of the board and the president, and when so
acting shall have the authority of and be subject to all the restrictions
upon the chairman of the board and the president. Any vice president may
sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the Board of Directors, certificates representing
shares of the corporation; and shall perform such other duties as from time
to time may be assigned to him by the chairman of the board (if he is the
CEO) or by the president or by the Board of Directors.
SECTION 9. Secretary
The secretary shall: 1) keep the minutes of the proceedings of its
shareholders, Board of Directors and executive committee and other
committees, if any; in one or more books provided for that purpose; 2) see
that all notices are duly given in accordance with the provisions of these
By-Laws or as required by law; 3) be custodian of the corporate records and
of the seal of the corporation and see that the seal of the corporation is
affixed to all documents and execution of which on behalf of the
corporation under its seal is duly authorized; 4) file each written request
by a shareholder that notices to him be mailed to some address other than
this address as it appears on the record of shareholders; 5) sign with the
chairman of the board or the president or a vice president certificates
representing shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; 6) have general
charge of the record of shareholders of the corporation; and 7) in general
perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned to him by the chairman of the
board (if he is the CEO) or by the president or by the Board of Directors.
SECTION 10. Treasurer
If required by the Board of Directors, the treasurer shall give a bond
for the faithful discharge of his duties in such sum and with such surety
or sureties as the Board of Directors shall determine. He shall: 1) have
charge and custody of and be responsible for all funds and securities of
the corporation, receive and give receipts for moneys due and payable to
the corporation from any source whatsoever, and deposit all such moneys in
the name of the corporation in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of
these By-Laws; 2) have charge and custody of and be responsible for the
keeping of correct and complete books and records of account of the
corporation; sign with the chairman of the board, or the president or a
vice president, certificates representing shares of the corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; and 3) in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be
assigned to him by the chairman of the board (if he is the CEO) or by the
president or by the Board of Directors.
SECTION 11. Assistant Secretaries and Assistant Treasurers
The assistant secretaries, when authorized by the Board of Directors,
may sign with the chairman of the board or the president or a vice
president, certificates representing shares of the corporation, the
issuance of which shall have been authorized by a resolution of the Board
of Directors. The assistant treasurers shall, if required by the Board of
Directors, give bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of Directors shall determine.
Assistant secretaries and assistant treasurers, in general, shall perform
such duties as shall be assigned to them by the secretary or the treasurer,
respectively, or by the chairman of the board (if he is the CEO) or the
president or the Board of Directors. In the absence of the secretary or in
the event of his death, inability or refusal to act, the assistant
secretary (or in the event there be more than one assistant secretary, the
assistant secretaries in the order of their appointment or as determined by
the chairman of the board (if he is the CEO) or the president or the Board
of Directors), shall perform the duties and exercise the authority of the
secretary. In the absence of the treasurer or in the event of his death,
inability or refusal to act, the assistant treasurer, (or in the event
there be more than one assistant treasurer, the assistant treasurers in the
order of their appointment or as determined by the chairman of the board
(if he is the CEO) or the president or the Board of Directors) shall
perform the duties and exercise the authority of the treasurer.
SECTION 12. Compensation of Officers
The compensation of the officers shall be fixed from time to time by
the Board of Directors and no officer shall be prevented from receiving
such compensation by reason of the fact that he is also a director of the
corporation.
ARTICLE V
Contracts, Checks and Deposits
SECTION 1. Contracts
The Board of Directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the corporation and such authority may be
general or confined to specific instances.
SECTION 2. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation,
shall be signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
SECTION 3. Deposits
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositaries as the Board of Directors may select.
ARTICLE VI
Certificates Representing Shares, Record
of Shareholders, Transfer of Shares
SECTION 1. Issuance of Shares
No shares of any class of the corporation or any obligations or other
securities convertible into or carrying options to purchase any such shares
of the corporation, or any options or rights to purchase any such shares or
securities of the corporation, shall be issued or sold unless such issuance
or sale is approved by the affirmative vote of at least 80% of the entire
Board of Directors.
SECTION 2. Certificates Representing Shares
The shares of the corporation shall be represented by certificates
which shall be in such form as shall be determined by the Board of
Directors. All such certificates shall be consecutively numbered or
otherwise identified. Such certificates shall be signed by the chairman of
the board or the president or a vice president and the secretary or an
assistant secretary or the treasurer or an assistant treasurer, and may,
but need not, be sealed with the seal of the corporation or a facsimile
thereof. The signature of the officers upon the certificate may be
facsimile if the certificate is countersigned by a transfer agent or an
assistant transfer agent, or registered by a registrar other than the
corporation itself or its employee. In case any officer who has signed or
whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer before such certificate is issued, it may be
issued by the corporation with the same effect as if he were such officer
at the date of issue. Each certificate shall state upon the face thereof;
1) that the corporation is formed under the laws of New York; 2) the name
of the person or persons to whom issued; 3) the number and class of shares
and the par value of each share represented by such certificate.
SECTION 3. Lost, Destroyed or Wrongfully Taken Certificates
The Board of Directors may direct 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, apparently destroyed or
wrongfully taken upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, apparently destroyed or wrongfully
taken. When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, apparently
destroyed or wrongfully taken certificate or certificates, or his legal
representative to advertise the same in such manner as it shall require
and/or give the corporation a bond in such sum and with such surety or
sureties as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificates alleged to have
been lost, apparently destroyed or wrongfully taken.
SECTION 4. Record of Shareholders
The corporation shall keep at its principal office, or at the office
of its transfer agent in the State of New York, a record containing the
names and addresses of all shareholders, the number and class of shares
held by each and the dates when they respectively became the owners of
record thereof. The corporation shall be protected in treating the persons
in whose names shares stand on the record of shareholders as the owners
thereof for all purposes.
SECTION 5. Transfer of Shares
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, and cancel the old certificate.
Every such transfer of shares shall be entered on the record of
shareholders of the corporation.
ARTICLE VII
Fiscal Year
The fiscal year of the corporation shall be determined by resolution
of the Board of Directors.
ARTICLE VIII
Dividends
The Board of Directors may from time to time declare, and the
corporation may pay, dividends on its outstanding shares in the manner and
upon the terms and conditions provided by law and its certificate of
incorporation.
ARTICLE IX
Seal
The seal of the corporation shall be circular in form and contain the
name of the corporation, the year when it was formed, and the words "New
York." The corporation may use the seal causing it or a facsimile to be
affixed or impressed or reproduced in any other manner.
ARTICLE X
Waiver of Notice
SECTION 1. Waiver of Notice to Shareholders
Notice of meeting need not be given to any shareholder who signed a
waiver of notice, in person or by proxy, whether before or after the
meeting. The attendance of any shareholder at a meeting, in person or by
proxy, without protesting prior to the conclusion of the meeting the lack
of notice of such meeting, shall constitute a waiver of notice by him.
SECTION 2. Waiver of Notice to Director
Notice of meeting need not be given to any director who signs a waiver
of notice whether before or after the meeting, or who attends the meeting
without protesting, prior thereto or at the commencement, the lack of
notice to him. A waiver of notice need not specify the purpose of any
regular or special meeting of the Board of Directors.
SECTION 3. Notice Dispensed with When Delivery Prohibited
Whenever communication to any shareholder or any director is unlawful
under any statute of the State of New York or of the United States or any
regulation, proclamation or order issued under said statutes, the giving of
any notice to such shareholder or such director shall not be required and
there shall be no duty to apply for license or other permission to do so.
ARTICLE XI
Indemnification
To the fullest extent permitted by law, either directly or by the
purchase of insurance or in part directly and in part by the purchase of
insurance, the corporation shall indemnify each natural person, or if
deceased, his personal representative made or threatened to be made a party
to any action or proceeding civil or criminal, including an appeal therein
against the reasonable expenses, attorneys' fees, judgments, fines and
amounts paid in settlement if such person is made or threatened to be made
a party by reason of the fact that he or his testator or intestate is or
was: 1) an officer, director or employee of the corporation or 2) an
officer, director or employee of or served in any capacity in any other
corporation, partnership, joint venture, trust or other enterprise, at the
request of this corporation, provided that in the case of a person serving
as an employee or in any capacity in any other corporation, that such
person was at the time he was so designated to serve by this corporation,
an employee of this corporation, or 3) the occupant of a position or a
member of a committee or Board or a person having responsibilities under
federal or state law, including but not limited to responsibilities under
the Employee Retirement Income Security Act of 1974, who was appointed to
such position or to such committee or Board by the Board of this
corporation or by an officer of this corporation or who served in such
position or on such committee or Board at the request or direction of the
Board of this corporation or of an officer of this corporation or who
assumed such responsibilities at the request or direction of the Board of
this corporation or of any officer of this corporation, provided only that
such person acted in good faith for a purpose which he reasonably believed
would be in the best interest of the corporation or in the case of service
for any other corporation or any partnership, joint venture, trust,
employee benefit plan or other enterprise, not opposed to the best
interests of the corporation, and in criminal proceedings had no reasonable
cause to believe that his conduct was unlawful.
The corporation's obligations under this Article shall be reduced by
the amount of any insurance which is available to any such person whether
such insurance is purchased by the corporation or otherwise. The right of
indemnity created herein shall be personal to the officer, director,
employee or other person and their respective legal representatives and in
no case shall any insurance carrier be entitled to be subrogated to any
rights created herein.
Nothing contained herein shall obligate the corporation to indemnify
any person against any claim arising out of personal injuries, bodily
injuries or property damage.
ARTICLE XII
Amendment and Repeal
SECTION 1. Amendment and Repeal by the Shareholders
These By-Laws may be amended or repealed by vote of the shareholders
entitled to vote generally in the election of directors, provided that
notice of meeting states such purpose, and provided further that the
provisions of Article III may be amended or repealed only by the
affirmative vote of holders of at least 75% of the outstanding shares of
stock of the corporation entitled to vote generally in the election of
directors.
SECTION 2. Amendment and Repeal by the Board of Directors
These By-Laws may also be amended or repealed by a majority of the
entire Board of Directors provided that the provisions of Article III may
be amended only by the affirmative vote of at least 75% of the entire Board
of Directors and further provided that Section 1 of Article VI may be
amended only by the affirmative vote of at least 80% of the entire Board of
Directors.
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 there to duly authorized.
CHEMUNG FINANCIAL CORPORATION
DATE: July 25, 1997 /s/ John W.
Bennett
John W. Bennett
Chairman & CEO
DATE: July 25, 1997 /s/ John R.
Battersby Jr.
John R. Battersby Jr.
Treasurer