Exhibit 3.2
BY-LAWS OF THE
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
("FARMER MAC")
as amended by the Board of Directors
through April 1, 2004
Table of Contents
ARTICLE I
NAME AND LOCATION OF OFFICES
Section 1. Name.................................................... 1
Section 2. Principal Office and Other Offices...................... 1
Section 3. Seal.................................................... 1
Section 4. Service of Process...................................... 1
Section 5. Fiscal Year............................................. 1
ARTICLE II
PURPOSES
Section 1. Statutory Purposes...................................... 1
Section 2. Ancillary Purposes...................................... 2
ARTICLE III
OFFICERS AND EMPLOYEES
Section 1. Number and Type......................................... 2
Section 2. Appointment and Confirmation............................ 2
Section 3. Removal................................................. 2
Section 4. Vacancies............................................... 2
Section 5. The President........................................... 3
Section 6. The Secretary........................................... 3
Section 7. The Treasurer........................................... 3
Section 8. The Controller.......................................... 3
Section 9. Employee Conduct........................................ 4
Section 10. Outside or Private Employment........................... 4
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Powers.................................................. 4
Section 2. Number and Type of Directors............................ 5
Section 3. Meetings and Waiver of Notice........................... 6
Section 4. Meetings by Telephone................................... 6
Section 5. Quorum.................................................. 6
Section 6. Action Without a Meeting................................ 6
Section 7. Compensation............................................ 7
Section 8. Chairman and Vice Chairman.............................. 7
Section 9. Standing Committees..................................... 7
(a) Audit Committee................................... 7
(b) Compensation Committee............................ 8
(c) Corporate Governance Committee.................... 8
(c) Finance Committee................................. 9
(d) Program Development Committee..................... 10
(e) Public Policy Committee........................... 10
Section 10. Ad Hoc Committees....................................... 10
ARTICLE V
SHAREHOLDERS
Section 1. Special Meeting......................................... 10
Section 2. Annual Meeting.......................................... 11
Section 3. Notice.................................................. 11
Section 4. Waiver of Notice........................................ 11
Section 5. Record Date............................................. 11
Section 6. Voting Lists............................................ 12
Section 7. Quorum.................................................. 12
Section 8. Proxies................................................. 12
Section 9. Organization............................................ 13
Section 10. Voting of Shares........................................ 13
Section 11. Inspectors of Votes..................................... 14
ARTICLE VI
SHARES OF STOCK
Section 1. Issuance and Conditions................................. 14
Section 2. Common Stock............................................ 14
Section 3. Redemption.............................................. 15
Section 4. Dividends on Voting Common Stock and Non-Voting
Common Stock............................................ 15
Section 5. Preferred Stock......................................... 15
Section 6. Dividends, Redemption, Conversion of Preferred Shares... 15
Section 7. Preference on Liquidation............................... 16
Section 8. Purchase of Own Shares.................................. 16
Section 9. Consideration for Shares................................ 16
Section 10. Stated Capital.......................................... 16
Section 11. No Preemptive Rights.................................... 17
Section 12. Liability of Shareholders............................... 17
Section 13. Reclassifications, Etc.................................. 17
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates............................................ 17
Section 2. Contents................................................ 18
Section 3. Transfer................................................ 18
Section 4. Records................................................. 19
ARTICLE VIII
INDEMNIFICATION
Section 1. Authorization........................................... 19
Section 2. Procedure............................................... 20
Section 3. Advance Payments........................................ 20
Section 4. Other Rights to Indemnification......................... 20
Section 5. Indemnification Insurance............................... 20
ARTICLE IX
CONTRACTS, LOANS, CHECKS, DEPOSITS AND INVESTMENTS
Section 1. Contracts............................................... 21
Section 2. Loans................................................... 21
Section 3. Checks, Drafts, etc..................................... 21
Section 4. Deposits................................................ 21
Section 5. Investments............................................. 21
ARTICLE X
FACSIMILE SIGNATURES.................................................21
ARTICLE XI
AMENDMENTS.......................................................... 22
ARTICLE I
NAME AND LOCATION OF OFFICES
Section 1. Name
The Corporation shall do business as the Federal Agricultural Mortgage
Corporation.
Section 2. Principal Office and Other Offices
The principal office of the Corporation shall be located in Washington,
D.C. The Corporation may establish other offices in such other places, within or
without the District of Columbia, as the Board of Directors shall, from time to
time, deem useful for the conduct of the Corporation's business.
Section 3. Seal
The seal of the Corporation shall be of such design as shall be approved
and adopted from time to time by the Board of Directors, and may be affixed to
any document by impression, by printing, by rubber stamp, or otherwise.
Section 4. Service of Process
The Corporate Secretary or any Assistant Secretary of the Corporation shall
be agents of the Corporation upon whom any process, notice or demand required or
permitted by law to be served upon the Corporation may be served.
Section 5. Fiscal Year
The fiscal year of the Corporation shall end on the thirty-first day of
December of each year.
ARTICLE II
PURPOSES
Section 1. Statutory Purposes
The Corporation is organized pursuant to its governing statute, Title VIII
of the Farm Credit Act of 1971, as amended, to provide a secondary market for
agricultural real estate mortgage loans and to enhance the ability of
individuals in small rural communities to obtain financing for moderate-priced
homes and to undertake such other activities authorized by such Act as may be
necessary and appropriate to further the availability of funds for agricultural
real estate mortgage loans and housing in small rural communities.
Section 2. Ancillary Purposes
The Corporation is further organized to engage in such other related
activities that are not prohibited and as the Board of Directors shall from time
to time determine to be in the furtherance of its statutory purposes.
ARTICLE III
OFFICERS AND EMPLOYEES
Section 1. Number and Type
The officers of the Corporation shall be a President, one or more Vice
Presidents (the number thereof to be determined by the Board of Directors), a
Secretary, a Treasurer, and a Controller, each of whom shall be appointed by the
Chairman of the Board of Directors subject to confirmation by resolution of the
Board of Directors. Such other officers and assistant officers as may be deemed
necessary may be appointed by the Chairman subject to confirmation by resolution
of the Board of Directors. Any of the above offices may be held by the same
person, except the offices of President and Secretary.
Section 2. Appointment and Confirmation
The initial officers of the Corporation shall be appointed and confirmed at
such time as may be appropriate. Thereafter, the officers shall be appointed and
confirmed annually at the first meeting of the Board of Directors held after
each annual meeting of the shareholders. If the selection of officers is not
held at such meeting, such selection shall be held as soon thereafter as
practicable. Each officer shall hold office until his successor shall have been
duly appointed and confirmed or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided.
Section 3. Removal
Any officer may be removed by a majority of the Board of Directors,
whenever in its judgment the best interests of the Corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the persons so removed. Appointment or confirmation of an officer shall
not of itself create contract rights.
Section 4. Vacancies
A vacancy in an office because of death, resignation, removal,
disqualification or otherwise, may be filled by the Chairman of the Board of
Directors, subject to confirmation by the Board of Directors at the meeting next
following the appointment, for the unexpired portion of the term.
Section 5. The President
The President shall be the principal executive officer of the Corporation
and, subject to the control of the Board of Directors, shall in general
supervise and control all of the business and affairs of the Corporation. He may
sign, singly or with the Secretary or any other proper officer of the
Corporation authorized by the Board of Directors, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except where the signing
and execution thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the Corporation, or shall be required to be
otherwise signed or executed, and in general shall perform all duties incident
to the office of President and such other duties as may be prescribed by the
Board of Directors from time to time.
Section 6. The Secretary
The Secretary shall: (a) keep the minutes of the shareholders' and of the
Board of Directors' meetings in one or more books provided for that purpose; (b)
see that all notices are duly given in accordance with the provisions of these
By-Laws; (c) be the 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, the execution of which on behalf of the Corporation under its seal is
duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President, certificates for shares of the Corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; (f) have general control of the stock transfer books of the
Corporation; and (g) 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 President or by the Board of Directors.
Section 7. The Treasurer
The Treasurer shall: (a) have charge and custody of and be responsible for
all funds and securities of the Corporation, receive and give receipts for
monies due and payable to the Corporation from any source whatsoever, and
deposit all such monies in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance with a
resolution of the Board of Directors; and (b) 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 President or by the Board of Directors.
Section 8. The Controller
The Controller shall: (a) keep full and accurate accounts of all assets,
liabilities, commitments, receipts, disbursements, and other financial
transactions of the Corporation; (b) certify vouchers for payment by the
Treasurer or his designee, and designate, with the written concurrence of the
Chairman of the Board, such other officers, agents, and employees, severally,
who may so certify; and (c) in general, perform all the duties ordinarily
incident to the office of Controller and such other duties as may be assigned to
him by the Board of Directors or by the Chairman of the Board.
Section 9. Employee Conduct
No officer or employee shall engage, directly or indirectly, in any
personal business transaction or private arrangement for personal profit which
arises from or is based upon his official position or authority or upon
confidential information which he gains by reason of such position or authority,
and he shall reasonably restrict his personal business affairs so as to avoid
conflicts of interest with his official duties. No officer or employee shall
divulge confidential information to any unauthorized person, or release any such
information in advance of authorization for its release, nor shall he accept,
directly or indirectly, any valuable gift favor or service from any person with
whom he transacts business on behalf of the Corporation.
Section 10. Outside Private Employment
No officer or employee shall have any outside or private employment or
affiliation with any firm or organization incompatible with his concurrent
employment by the Corporation and he shall not accept or perform any outside or
private employment which the President of the Corporation determines will
interfere with the efficient performance of his official duties. Any officer or
employee who intends to perform services for compensation or to engage in any
business shall report his intention to do so to the President of the Corporation
prior to such acceptance or performance.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Powers
Except as otherwise provided in these By-Laws, the powers of the
Corporation shall be exercised by the Board of Directors, which shall have all
powers granted to it by the Corporation's governing statute, as may be amended
from time to time, and such other powers including, but not limited to, the
power:
a. to determine the general policies that shall govern the operations
of the Corporation;
b. to issue stock in the manner provided in Section 8.4 of TitleVIII
of the Farm Credit Act of 1971, as amended;
c. to adopt, alter and use a corporate seal, which shall be judicially
noted;
d. to provide for a president, one or more vice presidents, secretary,
treasurer, and such other officers, employees and agents, as may be
necessary and define their duties and compensation levels, all without
regard to title 5, United States Code, and require surety bonds or make
other provisions against losses occasioned by acts of the aforementioned
persons;
e. to provide guarantees in the manner provided under Section 8.6 of
Title VIII of the Farm Credit Act of 1971, as amended;
f. to have succession until dissolved by law enacted by the Congress;
g. to prescribe such standards as may be necessary to carry out Title
VIII of the Farm Credit Act of 1971, as amended;
h. to enter into contracts and make payments with respect to the
contracts;
i. to sue and be sued in its corporate capacity and to complain and
defend in any action brought by or against the Corporation in any state or
federal court of competent jurisdiction;
j. to make and perform contracts, agreements, and commitments with
persons and entities both inside and outside the Farm Credit System;
k. to acquire, hold, lease, mortgage or dispose of, at public or
private sale, real and personal property, purchase or sell any securities
or obligations, and otherwise exercise all the usual incidents of ownership
of property necessary and convenient to the business of the Corporation;
1. to conduct its business, carry on its operations, and have officers
and exercise the power granted by the governing statute in any state
without regard to any qualification or similar statute in any such state;
m. to accept gifts or donations of services, of property, real,
personal or mixed, tangible or intangible; and
n. to exercise such other incidental powers as are necessary to carry
out the powers, duties, and functions of the Corporation in accordance with
the governing statute.
Section 2. Number and Type of Directors
The Board of Directors shall consist of those directors appointed or
elected as provided in Section 8.2 of Title VIII of the Farm Credit Act of 1971,
as amended.
Section 3. Meetings and Waiver of Notice
The Board of Directors shall meet at the call of the Chairman or a majority
of its members. Notice shall be given to each member by the Secretary at the
direction of the calling authority. Such notice shall be by letter, telegram,
cable, or radiogram delivered for transmission not later than during the third
day immediately preceding the day of the meeting or by word of mouth, telephone,
or radio phone, received not later than during the second day immediately
preceding the day of the meeting. Notice of any such meeting may be waived in
writing signed by the person or persons entitled thereto either before or after
the time of the meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of the Board of Directors need be specified in the
notice or waiver of notice of the meeting.
Section 4. Meetings by Telephone
Any meeting of the Board of Directors or any meeting of a Board committee
may be held with the members of the Board or such committee participating in
such meeting by telephone or by any other means of communication by which all
such members participating in the meeting are able to speak to and hear one
another.
Section 5. Quorum
The presence, in person or otherwise, in accordance with Section 6 of this
Article, of eight of the then incumbent members of the Board of Directors or of
a majority of the then incumbent members of a Board committee, as applicable, at
the time of any meeting of the Board or such committee, shall constitute a
quorum for the transaction of business. The act of the majority of such members
present at a meeting at which a quorum is present shall be the act of the Board
of Directors or committee, as applicable, unless the act of a greater number is
required by these By-Laws. Members may not be represented by proxy at any
meeting of the Board of Directors or committee thereof.
Section 6. Action Without a Meeting
Any action required to be taken by the Board of Directors at a meeting, or
by a committee of the Board at a meeting can be taken without a meeting, if a
consent in writing, setting forth the actions so taken, is later signed by a
majority of the directors, or a majority of the members of the committee, as the
case may be. Such consent shall have the same effect as a majority vote of the
Board of Directors or committee, as the case may be. Written notice of any
action taken pursuant to this section by a majority of the directors, or members
of a committee, as the case may be, shall, within 10 days of such action, be
given to all directors or members of a committee not consenting to the action.
Section 7. Compensation
Each director shall be paid such compensation as may be fixed from time to
time by resolution of the Board of Directors, and each director shall also be
reimbursed for his or her travel and subsistence expenses incurred while
attending meetings of the Board of Directors or committees thereof.
Section 8. Chairman and Vice Chairman
Under the authority of the Corporation's governing statute, the President
of the United States shall designate one director from among those directors
appointed by the President as provided in Section 8.2 of the Farm Credit Act of
1971, as amended, to be Chairman of the Board of Directors. The Chairman shall
preside over meetings of the Board of Directors.
The Board of Directors shall select a Vice Chairman from among the
directors appointed by the President of the United States who shall have all the
rights, duties and obligations of the Chairman at any time when the incumbent
Chairman is absent, unable or unwilling so to act, and at any time when there is
a vacancy in the office of Chairman. The Vice Chairman shall serve at the
pleasure of the Board and shall be selected no less frequently than annually for
a term expiring on December 31 of each year.
Section 9. Standing Committees
The Standing Committees described in this Section shall have such
responsibilities and authority as are set forth herein, together with such other
responsibilities and authority as may from time to time be provided in
resolutions adopted by the Board of Directors. The Board of Directors shall
designate members of the Standing Committees from among its members.
(a) Audit Committee
The Audit Committee shall select and engage independent accountants to
audit the books, records and accounts of the Corporation and its
subsidiaries, if any, and to perform such other duties as the Committee may
from time to time prescribe. The Committee shall review the scope of audits
as recommended by the public accountants to ensure that the recommended
scope is sufficiently comprehensive. The Audit Committee's selection of
accountants shall be made annually in advance of the Annual Meeting of
Stockholders and shall be submitted for ratification or rejection at such
meeting.
The Audit Committee shall receive a special report from the
independent accountants, prior to the public accountants' report on the
published financial statements. The special report shall, among other
things, point out and describe each material item affecting the financial
statements of the Corporation whichmight in the opinion of the independent
public accountants receive, under generally accepted accounting principles,
treatment varying from that proposed for such statements. The Committee
shall decide in its discretion upon the treatment to be accorded such items
and shall take such other action in respect of the special report as the
Committee may deem appropriate. A copy of the special report shall be
transmitted to the Compensation Committee, together with the Audit
Committee's decision.
(b) Compensation Committee
The Compensation Committee shall make recommendations to the Board on
the salaries and benefit plans of all corporate directors and officers. The
Committee shall recommend a framework to the Board for all compensation
plans and shall have authority to act within the framework approved by the
Board. The Committee shall have exclusive jurisdiction on behalf of the
Corporation to make recommendations to the full Board to approve,
disapprove, modify or amend all plans to compensate employees eligible for
incentive compensation.
The Compensation Committee shall review and approve, prior to
implementation, any employee benefit plan and any amendment or modification
thereof submitted to the Board to the extent such plan or amendment or
modification affects employees under its jurisdiction.
(c) Corporate Governance Committee
The Corporate Governance Committee shall assist the Board in: (i)
developing and recommending to the Board a set of effective corporate
governance guidelines and principles applicable to the Corporation; (ii)
reviewing, on a regular basis, the overall corporate governance of the
Corporation and recommending improvements when necessary; and (iii)
identifying individuals qualified to serve as directors and recommending to
the Board nominees for the directors to be elected by the holders of voting
common stock at each Annual Meeting of Stockholders. In addition, the
Corporate Governance Committee shall, during the intervals between meetings
of the Board, have and may exercise the powers of the Board, other than
those assigned to the Audit and Compensation Committees, except that it
shall not have the authority to take any of the following actions:
o the submission to stockholders of any action requiring stockholders'
authorization;
o the filling of vacancies on the Board of Directors or on the Corporate
Governance Committee;
o the fixing of compensation of directors for serving on the Board or on
the Corporate Governance Committee;
o the removal of any director, the President or any Vice President,
except that vacancies in established management positions may be
filled subject to ratification by the Board of Directors;
o the amendment or repeal of the By-Laws or the adoption of new by-laws;
o the amendment or repeal of any resolution of the Board which, by its
terms, is not so amendable or repealable;
o the declaration of dividends; and
o any action which the Chairman or Vice Chairman of the Board of
Directors (in the event that the Vice Chairman is the Chairman of the
Board due to the absence, inability or unwillingness of the Chairman
so to act) or the President shall, by written instrument filed with
the Secretary, designate as a matter which should be considered by the
Board of Directors.
The Corporate Governance Committee shall include the Chairman of the
Board, the Vice Chairman of the Board, who shall be the chairman of the
Committee, and two representatives from each of the Corporation's two
elected classes of directors. The designation of such Committee and the
delegation thereto of authority shall not relieve any director of any duty
he or she owes to the Corporation. The Corporate Governance Committee shall
meet at the call of its chairman or a majority of its members. A majority
of the members of the Committee shall constitute a quorum sufficient for
the taking of any action by the Committee, except that either the Chairman
or Vice Chairman and at least one member who has been elected to the Board
by the holders of Class A voting common stock and one member who has been
elected to the Board by the holders of Class B voting common stock must be
present to constitute a quorum. The action of the majority of the members
of the Committee present at a duly convened meeting shall be the action of
the Committee. Members of the Committee may not be represented by proxy at
any meeting of the Committee. In connection with each regular meeting of
the Board of Directors, the minutes of all meetings of the Corporate
Governance Committee since the last meeting of the Board shall be
distributed to the Board, and the Board shall take such action, if any, as
the Board may deem appropriate, to approve, alter or rescind actions, if
any, previously taken by the Committee under these By-Laws, provided that
rights or acts of third parties vested or taken in reliance on such action
prior to any such alteration or rescission shall not be adversely affected
thereby.
(d) Finance Committee
The Finance Committee shall be responsible for determining the
financial policies of the Corporation and managing the Corporation's
financial affairs, except those financial policies and affairs that are
assigned to the Audit and Compensation Committees.
The guarantee fee policies of the Corporation shall be reviewed and
approved by the Finance Committee and recommended to the Board for its
approval. All capital expenditures of the Corporation shall be approved by
the Committee, except that it may authorize the President to approve
expenditures which do not involve the Corporation in a new line of
business. All action taken by the Finance Committee shall be reported to
the Board and shall be subject to revision by the Board, provided that no
acts or rights of third parties shall be affected thereby.
(e) Program Development Committee
The Program Development Committee shall have primary responsibility
for reviewing and approving all policy matters relating to changes,
additions or deletions to the Securities Guide, including the forms and
appendices thereto and any other forms or documents used in the
Corporation's programs. The Committee shall make recommendations to the
Board with respect to commencement of new programs and modification or
discontinuance of existing programs.
(f) Public Policy Committee
The Public Policy Committee shall consider matters of public policy
referred to it by the Board or the Chairman including: (i) the
Corporation's relationship with and policies regarding Borrowers; (ii) the
Corporation's relationship with and policies regarding Congress and
governmental agencies and instrumentalities; and (iii) matters which
generate actual or apparent conflicts of interest between the Corporation
and one or more of its directors. The Committee shall report the outcome of
its evaluation of matters under preceding clause (iii) within a reasonable
time after reference is made.
Section 10. Ad Hoc Committees
The Board of Directors may, by resolution adopted by a majority of its
members, designate from among its members one or more ad hoc committees,
each of which to the extent provided in the resolution and in these By-Laws
shall have and may exercise all the authority of the Board of Directors. No
such ad hoc committee shall have the authority of the Board of Directors in
reference to any powers reserved to the full Board of Directors by the
resolution or these By-Laws.
ARTICLE V
SHAREHOLDERS
Section 1. Special Meeting
Special meetings of the shareholders shall be held upon the call of either
the Chairman or a majority of the directors of the Corporation, and shall be
called by the Chairman upon the written request of holders of at least one-third
of the shares of the Corporation having voting power. A special meeting may be
called for any purpose or purposes for which shareholders may legally meet, and
shall be held, within or without the District of Columbia, at such place as may
be determined by the Chairman or a majority of the directors of the Corporation,
whichever shall call the meeting.
Section 2. Annual Meeting
An annual meeting of the shareholders shall be held each year at such date
and at such time as designated by the Board of Directors. At the meeting, the
shareholders entitled to vote shall elect directors and transact such other
business as may properly be brought before the meeting.
Section 3. Notice
Written or printed notice stating the place, day and hour of any meeting
and, in the case of a special meeting, the purpose for which the meeting is
called, shall be delivered not less than 10 nor more than 50 days before the
date of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, or the Secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail with postage thereon prepaid, addressed to the shareholder at his
address as it appears on the stock transfer books of the Corporation or such
other address as the shareholder has in writing instructed the Secretary.
Section 4. Waiver of Notice
Attendance by a shareholder at a shareholders' meeting, whether in person
or by proxy, without objection to the notice or lack thereof, shall constitute a
waiver of notice of the meeting. Any shareholder may, either before or after the
time of the meeting, execute a waiver of notice of such meeting.
Section 5. Record Date
For the purpose of determining shareholders entitled to notice or to vote
at any meeting of shareholders or any adjournment thereof, or shareholders
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors shall fix
in advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than 60 days, in the case of a meeting of
shareholders, not less than 10 days prior to the date on which the particular
action requiring such determination of shareholders is to be taken. If the Board
of Directors fails to designate such a date, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividends is adopted, as the case may be, shall be the record
date for such determination of shareholders. When a date is set for the
determination of shareholders entitled to vote at any meeting of shareholders,
such determination shall apply to any adjournment thereof.
Section 6. Voting Lists
The officer or agent having charge of the stock transfer books for shares
of the Corporation shall make a complete record of the shareholders entitled to
vote at each meeting of the shareholders or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares held by each. Such
officer or agent shall also prepare two separate lists of such shareholders, one
indicating in alphabetical order which shareholders are financial institutions
not members of the Farm Credit System and another indicating in alphabetical
order which shareholders are member institutions of the Farm Credit System. Such
records shall be produced and kept open at the time and place of the meeting and
shall be subject to inspection by any shareholder during the whole time of the
meeting for the purposes thereof.
Section 7. Quorum
A majority of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders. If less than a majority of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn a meeting from
time to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The shareholders present
at a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum. Shares of its own stock belonging to the Corporation shall not be
counted in determining the total number of outstanding shares at any given time.
Section 8. Proxies
At all meetings of shareholders, a shareholder entitled to vote may vote by
proxy executed in writing by the shareholder or by its duly authorized attorney
in fact. Shares standing in the name of another corporation may be voted by such
officer, agent or proxy as the by-laws of such corporation may prescribe, or, in
the absence of such provisions, as the board of directors of such corporation
may determine. All proxies shall be filed with the Secretary of the Corporation
before or at the time of the meeting, and shall be revocable, if such revocation
be in writing, until exercised. No proxy shall be valid after eleven months from
the date of its executions unless otherwise provided in the proxy.
The Board of Directors may solicit proxies from shareholders to be voted by
such person or persons as shall be designated by resolution of the Board of
Directors. The Corporation shall assume the expense of solicitations undertaken
by the Board.
Any solicitation of proxies by the Corporation shall contain the names of
all persons the Corporation proposes to nominate for directorships to be filled
at the next meeting, their business addresses, and a brief summary of their
business experience during the last five years. Each proxy solicitation shall be
accompanied by a copy of the most recent annual report of the Corporation which
report, to the satisfaction of the Board of Directors, shall reasonably
represent the financial situation of the Corporation as of the time of its
preparation.
If any shareholder entitled to vote at a meeting of shareholders shall seek
a list of shareholders for the purpose of soliciting proxies from any other
shareholders, the Corporation may, at its option, either (a) provide the
soliciting shareholder with a complete and current list containing the names of
all shareholders of the Corporation entitled to vote at such meeting; and their
addresses as they appear on the transfer books of the Corporation; or (b) mail
such proxy solicitations on behalf of the soliciting shareholders, upon being
furnished the material to be mailed and the reasonable cost of the mailing.
Section 9. Organization
Meetings of the shareholders shall be presided over by the Chairman of the
Board of Directors. The Secretary of the Corporation shall act as secretary of
every meeting and, if the Secretary is not present, the meeting shall choose any
person present to act as secretary of the meeting.
Section 10. Voting of Shares
Except as provided in this Section, at every meeting of the shareholders,
every holder of common stock entitled to vote on a matter coming before such
meeting shall be entitled to one vote for each share of common stock registered
in its name on the stock transfer books of the Corporation at the close of the
record date.
At each election of directors, the Chairman of the meeting shall inform the
shareholders present of the persons appointed by the President of the United
States to be the appointed directors of the Corporation. The shareholders
entitled to vote for the election of directors which are institutions of the
Farm Credit System shall constitute a single class and shall then proceed to
elect five directors. Following the election of directors by shareholders which
are institutions of the Farm Credit System, the shareholders entitled to vote
for the election of directors which are financial institutions and are not
institutions of the Farm Credit System shall constitute a single class and shall
proceed to elect five directors.
Every holder of common stock entitled to vote for the election of directors
shall have the right to cast the number of votes that is equal to the product of
the number of shares owned by it multiplied by the number of directors to be
elected of the class for which it may vote, and it may cast all such votes for
one person or may distribute them evenly or unevenly among any number of persons
not greater than the number of such directors of such class to be elected, at
its option. Shares of its own stock belonging to the Corporation shall not be
eligible to vote on any matter.
Section 11. Inspectors of Votes
The Board of Directors, in advance of any meeting of shareholders, may
appoint one or more Inspectors of Votes to act at the meeting or any adjournment
thereof. In case any person so appointed resigns or fails to act, the vacancy
may be filled by appointment by the Chairman of the meeting. The Inspectors of
Votes shall determine all questions concerning the qualification of voters, the
validity of proxies, the acceptance or rejection of votes and, with respect to
each vote by ballot, shall collect and count the ballots and report in writing
to the secretary of the meeting the result of the vote. The Inspectors of Votes
need not be shareholders of the Corporation. No person who is an officer or
director of the Corporation, or who is a candidate for election as a director,
shall be eligible to be an Inspector of Votes.
ARTICLE VI
SHARES OF STOCK
Section 1. Issuance and Conditions
The Board of Directors shall have the power in accordance with the
provisions of the governing statute to authorize the issuance of voting common,
non-voting common and preferred shares of stock. The Board of Directors may by
resolution impose a stock purchase requirement as a prerequisite to
participation in any program of the Corporation. Any stock purchase requirement
shall not apply to any participant who is prohibited by law from acquiring stock
of the Corporation, provided such participant undertakes to make such purchase
when such legal restrictions are alleviated, or to such otherwise eligible
participants as the Board may by resolution provide.
Section 2. Common Stock
The Corporation shall have voting common stock having such par value as may
be fixed by the Board of Directors, which may only be issued to institutions
which are authorized to be issued such shares pursuant to Title VIII of the Farm
Credit Act of 1971, as amended.
The Corporation may issue non-voting common stock having such par value as
may be fixed by the Board of Directors, which may be issued without limitations
as to the status of the holders thereof.
Except as otherwise provided in these By-Laws, the powers, preferences and
relative and other special rights and the qualifications, limitations and
restrictions applicable to all shares of common stock, whether voting common
stock or non-voting common stock, shall be identical in every respect.
Except as provided in this Section, the voting common stock and the
non-voting common stock of the Corporation shall be fully transferable, except
that, as to the Corporation, they shall be transferred only on the books of the
Corporation.
Section 3. Redemption
Whenever the Corporation shall determine that any shares of the voting
common stock of the Corporation are held by a person, including a partnership,
joint venture, trust, corporation or any other association, not eligible to
acquire such shares under the provisions of Title VIII of the Farm Credit Act of
1971, as amended, the Corporation shall notify such person in writing that such
shares are to be disposed of to a person eligible to acquire such shares within
a period of not more than 30 days. If the Corporation determines that the shares
have not been transferred within 30 days of such notice, the Corporation may
redeem such shares at the lesser of the fair market value thereof or the book
value thereof at the date established for such redemption.
The power to redeem voting common stock found to be held by ineligible
persons granted by this Section shall not be deemed to limit the right of the
Corporation, at its discretion, to pursue any other lawful remedy against such
ineligible person.
Section 4. Dividends on Voting Common Stock and Non-Voting Common Stock
To the extent that income is earned and realized, the Board of Directors
may from time to time declare and the Corporation shall pay, dividends on the
voting common stock and the non-voting common stock, except that no such
dividends shall be payable with respect to any share that has been called for
redemption after the date established for such redemption. No dividend shall be
declared or paid on any share of voting common stock or non-voting common stock
at any time when any dividend is due on the shares of preferred stock and has
not been paid.
Section 5. Preferred Stock
The Corporation may issue shares of preferred stock having such par value,
and such other powers, preferences and relative and other special rights, and
qualifications, limitations and restrictions applicable thereto, as may be fixed
by the Board of Directors. Such shares shall be freely transferable, except
that, as to the Corporation, such shares shall be transferred only on the books
of the Corporation.
Section 6. Dividends, Redemption, Conversion of Preferred Shares
The holders of the preferred shares shall be entitled to such rate of
cumulative dividends, and such shares shall be subject to such redemption or
conversion provisions, as may be provided for at the time of issuance. Such
dividends shall be paid out of the net income of the Corporation, to the extent
earned and realized.
Section 7. Preference on Liquidation
In the event of any liquidation, dissolution, or winding up of the
Corporation's business, the holders of shares of preferred stock shall be paid
in full at par value thereof, plus all accrued dividends, before the holders of
the voting common stock and non-voting common stock receive any payment.
Section 8. Purchase of Own Shares
The Corporation shall have the right, pursuant to resolution by the Board
of Directors, to purchase, take, receive or otherwise acquire its own shares,
but purchases, whether direct or indirect, shall be made only to the extent of
unreserved and unrestricted earned or capital surplus available therefor.
Section 9. Consideration for Shares
The Corporation shall issue shares of stock for such consideration,
expressed in dollars, but not less than the par value thereof, as shall be fixed
from time to time by the Board of Directors. That part of the surplus of the
Corporation which is transferred to stated capital upon issuance of shares as a
share dividend shall be deemed to be the consideration for the shares so issued.
The consideration for the issuance of shares may be paid, in whole or in
part, in cash or other property acceptable to the Board of Directors, except
that a promissory note shall not constitute payment or partial payment for the
issuance of shares of the Corporation.
Section 10. Stated Capital
The consideration received upon the issuance of any share of stock shall
constitute stated capital to the extent of the par value of such shares and the
excess, if any, of such consideration shall constitute capital surplus. The
stated capital of the Corporation may be increased from time to time by
resolution of the Board of Directors directing that all or a part of the surplus
of the Corporation be transferred to stated capital. The Board of Directors may
direct that the amount of the surplus so transferred shall be deemed to be
stated capital in respect of any designated class of shares.
The Board of Directors may, by resolution from time to time, reduce the
stated capital of the Corporation but only in the amount of the aggregate par
value of any shares of the Corporation which shall have been reacquired and
canceled. Any surplus created by virtue of a reduction of stated capital shall
be deemed to be capital surplus.
Section 11. No Preemptive Rights
No holder of the shares of the Corporation of any class, now or hereafter
authorized, shall as such holder have any preemptive or preferential rights to
subscribe to, purchase, or receive any shares of the Corporation of any class,
now or hereafter authorized, or any rights or options for any such shares or any
rights or options to subscribe to or purchase any such shares or other
securities convertible into or exchangeable for or carrying rights or options to
purchase shares of any class or other securities, which may at any time be
issued, sold or offered for sale by the Corporation or subjected to the rights
or options to purchase granted by the Corporation.
Section 12. Liability of Shareholders
A holder of shares of the Corporation shall be under no obligation to the
Corporation with respect to such shares other than the obligation to pay to the
Corporation the full consideration for which such shares were or are to be
issued.
Any person becoming a transferee of shares in good faith and without notice
or knowledge that the full consideration thereof had not been paid shall not be
personally liable to the Corporation for any unpaid portion of such
consideration.
Section 13. Reclassifications, Etc.
No class of outstanding voting or non-voting common stock may be
subdivided, combined, reclassified or otherwise changed unless contemporaneously
therewith all other classes of outstanding common stock are subdivided,
combined, reclassified or otherwise changed in the same proportion and in the
same manner.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates
The interest of each shareholder of the Corporation shall be evidenced by
certificates representing shares of stock of the Corporation, certifying the
number of shares represented thereby, and shall be in such form not inconsistent
with the governing statute of the Corporation as the Board of Directors may from
time to time prescribe.
The certificates of stock shall be signed by the Chairman of the Board of
Directors or the President and by the Secretary or Assistant Secretary and
sealed with the corporate seal or an engraved or printed facsimile thereof. The
signatures of such officers upon a certificate may be facsimile if the
certificate is manually signed on behalf of a transfer agent or a registrar
other than the Corporation itself or one of its employees. In the event that any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such before such certificate is issued, it
may be issued by the Corporation with the same effect as if such officer had not
ceased to be such at the time of the issue.
Each certificate or share shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled, and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in the case of a
lost, destroyed or mutilated certificate, a new certificate may be issued upon
such terms and with indemnity to the Corporation as the Board of Directors may
prescribe.
Section 2. Contents
Each certificate representing shares shall state:
a. That the Corporation is organized pursuant to an Act of Congress;
b. The name of the person to whom issued;
c. The number and class of shares, and the designation of the
series, if any, which such certificate represents;
d. The par value of each share represented by such certificate;
e. The provisions by which such shares may be redeemed; and
f. That the shares represented shall not have any preemptive rights
to purchase unissued or treasury shares of the Corporation.
Each certificate representing shares of preferred stock shall state upon
the face thereof the annual dividend rate for such shares, and shall state upon
the reverse side thereof the powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions applicable to such
shares of preferred stock.
No certificate shall be issued for any share until such share is fully
paid.
Section 3. Transfer
Transfer of shares of the Corporation shall be made only on the stock
transfer books of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of the authority to
transfer, or by his attorney thereto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares.
The person in whose name shares stand on the books of the Corporation shall
be deemed by the Corporation to be the owner thereof for all purposes.
Section 4. Records
The Corporation shall keep at its principal place of business, or at the
office of its transfer agent or registrar, a record of its shareholders, giving
the names and addresses of all shareholders and the number of shares held by
each. Any person who shall be the holder of at least five percent of the
aggregate number of shares of any class of common stock of the Corporation shall
upon written demand stating the purpose therefor, have the right to examine, in
person, or by agent or attorney, duly authorized in writing, at any reasonable
time or times, for any proper purpose, the Corporation's record of shareholders
and minutes of meetings of the shareholders and the Board of Directors, and to
make extracts therefrom.
ARTICLE VIII
INDEMNIFICATION
Section 1. Authorization
The Corporation shall, to the extent permitted by law, indemnify any person
who was or is a party, whether as a plaintiff acting with the approval of the
Board of Directors or as a defendant, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal, by
reason of the fact that he or she 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, partnership,
joint venture, trust or other enterprise, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the Corporation and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. Any such person shall be indemnified by the Corporation to
the extent he or she is successful in the action, suit or proceeding. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
Section 2. Procedure
Any indemnification under this Article shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the officer, director,
employee or agent has met the applicable standard of conduct set forth in this
Article. Such determination shall be made by a majority vote of the members of
the Board of Directors who were not parties to such action, suit or proceeding.
If all members of the Board of Directors were parties to such action, suit or
proceeding, such determination shall be made either (a) by legal counsel or (b)
by the shareholders at the next meeting of shareholders. In any case under this
Article, the Board or shareholders are authorized to obtain the opinion of
independent legal counsel.
Section 3. Advance Payments
Expenses, including attorneys' fees, incurred in defending a civil,
criminal, administrative or investigative action, suit or proceeding, whether
formal or informal, shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in section 2 of this Article upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount only if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation.
Section 4. Other Rights to Indemnification
The indemnification provided in this Article shall not be deemed exclusive
of any other rights to which the director, officer, employee or agent may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by this Article shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.
Section 5. Indemnification Insurance
The Corporation, pursuant to a resolution of 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, partnership, joint venture, trust or other enterprise against any
liability asserted against him or her in any such capacity or arising out of his
status as such whether or not the Corporation would have the power to indemnify
him or her against such liability under the provisions of this Article.
ARTICLE IX
CONTRACTS, LOANS, CHECKS, DEPOSITS AND STATEMENTS
Section 1. Contracts
The Board of Directors may authorize the Chairman or officers of the
Corporation 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. Loans
No loans shall be contracted on behalf of the Corporation and no evidence
of indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or confined to specific
instances.
Section 3. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of money, notes or other
evidence of indebtedness issued in the name of the Corporation shall be signed
by the Chairman or officers of the Corporation and in such manner as shall from
time to time be determined by a resolution of the Board of Directors.
Section 4. Deposits
All funds of the Corporation not otherwise employed shall be deposited from
time to time to the credit of the Corporation at such banks, trust companies or
other depositories as the Board of Directors may select.
Section 5. Investments
The Board of Directors may authorize the Chairman or officers of the
Corporation to invest the funds of the Corporation in such securities and in
such manner as shall from time to time be determined by a resolution of the
Board of Directors.
ARTICLE X
FACSIMILE SIGNATURES
The Board of Directors may by resolution authorize the use of facsimile
signatures in lieu of manual signatures.
ARTICLE XI
AMENDMENTS
These By-Laws may be altered, amended or repealed and new by-laws,
consistent with the governing statute, may be adopted by the majority vote of
the Board of Directors.