Exhibit 3.2
EXHIBIT B
CODE OF REGULATIONS
OF
CORTLAND BANCORP.
INDEX
SECTION CAPTION PAGE NO.
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ARTICLE ONE
MEETING OF SHAREHOLDERS
1.01 Annual Meetings 1
1.02 Calling of Meeting 1
1.03 Place of Meeting 1
1.04 Notice of Meetings 2
1.05 Waiver of Notice 3
1.06 Quorum 3
1.07 Votes Required 4
1.08 Order of Business 4
1.09 Shareholders Entitled to Vote 4
1.10 Cumulative Voting 5
1.11 Proxies 5
1.12 Inspectors of Election 5
ARTICLE TWO
DIRECTORS
2.01 Authority and Qualifications 6
2.02 Number of Directors and Term of Office 6
2.03 Nomination and Election 8
2.04 Removal 10
2.05 Vacancies 10
2.06 Meetings 10
2.07 Notice of Meetings 11
2.08 Waiver of Notice 12
2.09 Quorum 12
2.10 Executive Committee 12
2.11 Compensation 13
2.12 By-Laws 14
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SECTION CAPTION PAGE NO.
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ARTICLE THREE
OFFICERS
3.01 Officers 14
3.02 Tenure of Office 14
3.03 Duties of the Chairman of the Board 15
3.04 Duties of the President 15
3.05 Duties of the Vice Presidents 15
3.06 Duties of the Secretary 16
3.07 Duties of the Treasurer 16
ARTICLE FOUR
SHARES
4.01 Certificates 17
4.02 Transfers 17
4.03 Transfer Agents and Registrars 19
4.04 Lost, Wrongfully Taken or Destroyed Certificates 19
4.05 Uncertificated Shares 19
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
5.01 Mandatory Indemnification 20
5.02 Court-Approved Indemnification 21
5.03 Indemnification for Expenses 22
5.04 Determination Required 23
5.05 Advances for Expenses 24
5.06 Article Five Not Exclusive 25
5.07 Insurance 26
5.08 Certain Definitions 26
5.09 Venue 28
ARTICLE SIX
MISCELLANEOUS
6.01 Amendments 28
6.02 Action by Shareholders or Directors without a Meeting 28
6.03 Seal 29
6.04 Regulations Supersede Prior By-Laws or Regulations 29
ii
CODE OF REGULATIONS
OF
CORTLAND BANCORP.
ARTICLE ONE
MEETING OF SHAREHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the shareholders for
the election of directors, for the consideration of reports to be laid before
such meeting and for the transaction of such other business as may properly come
before such meeting, shall be held on the second Tuesday of April of each year
or on such other date as may be fixed from time to time by the directors.
Section 1.02. Calling of Meetings. Meetings of the shareholders may be
called only by the chairman of the board, the president, or, in case of the
president's absence, death, or disability, the vice president authorized to
exercise the authority of the president; the secretary; the directors by action
at a meeting, or a majority of the directors acting without a meeting; or the
holders of at least 50% of all shares outstanding and entitled to vote thereat.
Section 1.03. Place of Meetings. All meetings of shareholders shall be held
at the principal office of the corporation, unless otherwise provided by action
of the directors. Meetings of shareholders may be held at any place within or
without the State of Ohio.
1
Section 1.04. Notice of Meetings. (A) Written notice stating the time,
place and purposes of a meeting of the shareholders shall be given either by
personal delivery or by mail not less than seven (7) nor more than sixty (60)
days before the date of the meeting, (1) to each shareholder of record entitled
to notice of the meeting, (2) by or at the direction of the president or the
secretary. If mailed, such notice shall be addressed to the shareholder at his
address as it appears on the records of the corporation. Notice of adjournment
of a meeting need not be given if the time and place to which it is adjourned
are fixed and announced at such meeting. In the event of a transfer of shares
after the record date for determining the shareholders who are entitled to
receive notice of a meeting of shareholders, it shall not be necessary to give
notice to the transferee. Nothing herein contained shall prevent the setting of
a record date in the manner provided by law, the articles or the regulations for
the determination of shareholders who are entitled to receive notice of or to
vote at any meeting of shareholders or for any purpose required or permitted by
law.
(B) Following receipt by the president or the secretary of a request in
writing, specifying the purpose or purposes for which the persons properly
making such request have called a meeting of the shareholders, delivered either
in person or by registered mail to such officer by any persons entitled to call
a meeting of shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than seven (7) nor more than sixty
2
(60) days after the receipt of such request, as such officer may fix. If such
notice is not given within thirty (30) days after the receipt of such request by
the president or the secretary, then, and only then, the persons properly
calling the meeting may fix the time of meeting and give notice thereof in
accordance with the provisions of the regulations.
Section 1.05. Waiver of Notice. Notice of the time, place and purpose or
purposes of any meeting of shareholders may be waived in writing, either before
or after the holding of such meeting, by any shareholders, which writing shall
be filed with or entered upon the records of such meeting. The attendance of any
shareholder, in person or by proxy, at any such meeting without protesting the
lack of proper notice, prior to or at the commencement of the meeting, shall be
deemed to be a waiver by such shareholder of notice of such meeting.
Section 1.06. Quorum. At any meeting of shareholders, the holders of a
majority of the voting shares of the corporation then outstanding and entitled
to vote thereat, present in person or by proxy, shall constitute a quorum for
such meeting. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, or the chairman of the board, the
president, or the officer of the corporation acting as chairman of the meeting,
may adjourn such meeting from time to time, and if a quorum is present at such
adjourned meeting any business may be transacted as if the meeting had been held
as originally called.
3
Section 1.07. Votes Required. At all elections of directors the candidates
receiving the greatest number of votes shall be elected. Any other matter
submitted to the shareholders for their vote shall be decided by the vote of
such proportion of the shares, or of any class of shares, or of each class, as
is required by law, the articles or the regulations.
Section 1.08. Order of Business. The order of business at any meeting of
shareholders shall be determined by the officer of the corporation acting as
chairman of such meeting unless otherwise determined by a vote of the holders of
a majority of the voting shares of the corporation then outstanding, present in
person or by proxy, and entitled to vote at such meeting.
Section 1.09. Shareholders Entitled to Vote. Each shareholder of record on
the books of the corporation on the record date for determining the shareholders
who are entitled to vote at a meeting of shareholders shall be entitled at such
meeting to one vote for each share of the corporation standing in his name on
the books of the corporation on such record date. The directors may fix a record
date for the determination of the shareholders who are entitled to receive
notice of and to vote at a meeting of shareholders, which record date shall not
be a date earlier than the date on which the record date is fixed and which
record date may be a maximum of sixty (60) days preceding the date of the
meeting of shareholders.
4
Section 1.10. Cumulative Voting. The right of every shareholder to vote
cumulatively in the election of directors is eliminated, so that no shareholder
of the corporation may cumulate his voting power.
Section 1.11. Proxies. At meetings of the shareholders any shareholder of
record entitled to vote thereat may be represented and may vote by a proxy or
proxies appointed by an instrument in writing signed by such shareholder, but
such instrument shall be filed with the secretary of the meeting before the
person holding such proxy shall be allowed to vote thereunder. No proxy shall be
valid after the expiration of eleven months after the date of its execution,
unless the shareholder executing it shall have specified therein the length of
time it is to continue in force.
Section 1.12. Inspectors of Election. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at such
meeting or any adjournment thereof; if inspectors are not so appointed, the
officer of the corporation acting as chairman of any such meeting may make such
appointment. In case any person appointed as inspector fails to appear or act,
the vacancy may be filled only by appointment made by the directors in advance
of such meeting or, if not so filled, at the meeting by the officer of the
corporation acting as chairman of such meeting. No other person or persons may
appoint or require the appointment of inspectors of election.
5
ARTICLE TWO
DIRECTORS
Section 2.01. Authority and Qualifications. Except where the law, the
articles or the regulations otherwise provide, all authority of the corporation
shall be vested in and exercised by its directors. No person who has attained
the age of seventy (70) shall be eligible for election as a director. Each
director shall be the holder of shares of stock of the corporation in an amount
equal to or greater than an aggregate par value or stated value of five hundred
dollars, an aggregate shareholders equity of five hundred dollars, or an
aggregate fair market value of five hundred dollars. Determination of such value
may be based on the value of the shares of stock on the date such shares were
purchased or on the date such person became a director, whichever value is
greater.
Section 2.02. Number of Directors and Term of Office.
(A) Until changed in accordance with the provisions of the regulations,
the number of directors of the corporation shall be ten (10).
(B) If recommended by two-thirds (2/3) of the whole authorized number of
directors, the number of directors may be fixed or changed at a
meeting of the shareholders called for the purpose of electing
directors at which a quorum is present, only by the affirmative vote
of the holders of not less than a majority of the voting shares which
are represented at the meeting,
6
in person or by proxy, and entitled to vote on such proposal,
provided, however, that the shareholders may not increase the number
of directors to more than eleven (11) or reduce the number of
directors to less than nine (9).
(C) The directors may fix or change the number of directors and may fill
any director's office that is created by an increase in the number of
directors; provided, however, that the directors may not increase the
number of directors to more than eleven (11) nor reduce the number of
directors to less than nine (9).
(D) The board of directors shall be divided into three classes as nearly
equal in number as the then fixed number of directors permits, with
the term of office of one class expiring each year. The election of
each class of directors shall be a separate election. The directors
elected at the annual meeting in 1990 shall hold office for a term
expiring in 1993; the directors elected at the annual meeting in 1991
shall hold office for a term expiring in 1994; and the directors
elected at the annual meeting in 1992 shall hold office for a term
expiring in 1995. At each annual meeting of shareholders, successors
to the class of directors whose term then expires shall be elected to
hold office for a three-year term. A director shall hold office until
the annual meeting for the year in which his term expires and
7
until his successor is duly elected and qualified, or until his
earlier resignation, removal from office or death. In the event of any
increase in the number of directors of the corporation, the additional
directors shall be similarly classified in such a manner that each
class of directors shall be as equal in number as possible. In the
event of any decrease in the number of directors of the corporation,
such decrease shall be effected in such a manner that each class of
directors shall be as equal in number as possible.
(E) No reduction in the number of directors shall of itself have the
effect of shortening the term of an incumbent director.
Section 2.03. Nomination and Election.
(A) At each annual meeting of shareholders for the election of directors,
the successors to the directors whose terms shall expire in that year
shall be elected, but if the annual meeting is not held or if one or
more of such directors are not elected thereat, they may be elected at
a special meeting called for that purpose.
(B) Any nominee for election as a director of the corporation may be
proposed only by or at the direction of the board of directors or by
any shareholder entitled to vote for the election of directors.
Nominations, other than those made by or at the direction of the board
of directors, shall be made in writing and shall be delivered or
mailed to the president of the corporation
8
not less than fourteen days nor more than fifty days prior to any
meeting of shareholders called for the election of directors;
provided, however, that if less than twenty-one days' notice of the
meeting is given to shareholders, such nomination shall be mailed or
delivered to the president of the corporation not later than the close
of business on the seventh day following the day on which the notice
of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder:
(1) the name and address of each proposed nominee;
(2) the principal occupation of each proposed nominee;
(3) the total number of shares of stock of the corporation that will
be voted for each proposed nominee;
(4) the name and residence address of the notifying shareholder; and
(5) the number of shares of stock of the corporation beneficially
owned by the notifying shareholder.
(C) If a shareholder shall attempt to nominate one or more persons for
election as a director at any meeting at which directors are to be
elected without having identified each such person in a written notice
given as contemplated by, and/or without having provided therein the
information specified in, division (B) of this section, each such
attempted nomination shall be invalid and shall be disregarded unless
the person acting as
9
chairman of the meeting determines that the facts warrant the
acceptance of such nomination.
(D) The election of directors shall be by ballot.
Section 2.04. Removal. Any director or the entire board of directors may be
removed only in accordance with the articles of the corporation.
Section 2.05. Vacancies. The remaining directors, though less than a
majority of the whole authorized number of directors, may, by the vote of a
majority of their number, fill any vacancy in the board for the unexpired term.
A vacancy in the board exists within the meaning of this Section 2.05,
consistent with the provisions in the amended articles and regulations of the
corporation, when the shareholders increase the authorized number of directors
but fail at the meeting at which such increase is authorized, or an adjournment
thereof, to elect the additional directors provided for, when the shareholders
fail at any time to elect the whole authorized number of directors, or when the
shareholders remove a director for cause.
Section 2.06. Meetings. A meeting of the directors shall be held
immediately following the adjournment of each annual meeting of shareholders at
which directors are elected, and notice of such meeting need not be given. The
directors shall hold such other meetings as may from time to time be called, and
such other meetings of directors may be called only by the chairman of the
board, the president, or any two directors. All meetings of directors shall be
held at the principal office of the
10
corporation in Cortland, Ohio, or at such other place within or without the
State of Ohio, as the directors may from time to time determine by a resolution.
Meetings of the directors may be held through any communications equipment if
all persons participating can hear each other and participation in a meeting
pursuant to this provision shall constitute presence at such meeting.
Section 2.07. Notice of Meetings. Notice of the time and place of each
meeting of directors for which such notice is required by law, the articles, the
regulations or the by-laws shall be given to each of the directors by at least
one of the following methods:
(A) In a writing mailed not less than three days before such meeting and
addressed to the residence or usual place of business of a director,
as such address appears on the records of the corporation; or
(B) By telegraph, cable, radio, wireless, or a writing sent or delivered
to the residence or usual place of business of a director as the same
appears on the records of the corporation, not later than the day
before the date on which such meeting is to be held; or
(C) Personally or by telephone not later than the day before the date on
which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
regulations shall be sufficient, and the method of giving notice to all
directors need
11
not be uniform. Notice of any meeting of directors may be given only by the
chairman of the board, the president or the secretary of the corporation. Any
such notice need not specify the purpose or purposes of the meeting. Notice of
adjournment of a meeting of directors need not be given if the time and place to
which it is adjourned are fixed and announced at such meeting.
Section 2.08. Waiver of Notice. Notice of any meeting of directors may be
waived in writing, either before or after the holding of such meeting, by any
director, which writing shall be filed with or entered upon the records of the
meeting. The attendance of any director at any meeting of directors without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by him of notice of such meeting.
Section 2.09. Quorum. A majority of the whole authorized number of
directors shall be necessary to constitute a quorum for a meeting of directors,
except that a majority of the directors in office shall constitute a quorum for
filling a vacancy in the board. The act of a majority of the directors present
at a meeting at which a quorum is present is the act of the board, except as
otherwise provided by law, the articles or the regulations.
Section 2.10. Executive Committee. The directors may create an executive
committee or any other committee of directors, to consist of not less than three
(3) directors, and may authorize the delegation to such executive committee or
other
12
committees of any of the authority of the directors, however conferred, other
than that of filling vacancies among the directors or in the executive committee
or in any other committee of the directors.
Such executive committee or any other committee of directors shall serve at
the pleasure of the directors, shall act only in the intervals between meetings
of the directors, and shall be subject to the control and direction of the
directors. Such executive committee or other committee of directors may act by a
majority of its members at a meeting or by a writing or writings signed by all
of its members.
Any act or authorization of any act by the executive committee or any other
committee within the authority delegated to it shall be as effective for all
purposes as the act or authorization of the directors. No notice of a meeting of
the executive committee or of any other committee of directors shall be
required. A meeting of the executive committee or of any other committee of
directors may be called only by the president or by a member of such executive
or other committee of directors. Meetings of the executive committee or of any
other committee of directors may be held through any communications equipment if
all persons participating can hear each other and participation in such a
meeting shall constitute presence thereat.
Section 2.11. Compensation. Directors shall be entitled to receive, as
compensation for services rendered and expenses incurred as directors, such
amounts as the directors may determine.
13
Section 2.12. By-Laws. The directors may adopt, and amend from time to
time, by-laws for their own government, which by-laws shall not be inconsistent
with the law, the articles or the regulations.
ARTICLE THREE
OFFICERS
Section 3.01. Officers. The officers of the corporation to be elected by
the directors shall be a president, a secretary, a treasurer, and, if desired,
one or more vice presidents and such other officers and assistant officers as
the directors may from time to time elect. The directors may elect a chairman of
the board, who must be a director. Officers need not be shareholders of the
corporation, and may be paid such compensation as the board of directors may
determine. Any two or more offices may be held by the same person, but no
officer shall execute, acknowledge, or verify any instrument in more than one
capacity if such instrument is required by law, the articles, the regulations or
the By-Laws to be executed, acknowledged, or verified by two or more officers.
Section 3.02. Tenure of Office. The officers of the corporation shall hold
office at the pleasure of the directors. Any officer of the corporation may be
removed, either with or without cause, at any time, by the affirmative vote of a
majority of all
14
the directors then in office. Such removal, however, shall be without prejudice
to the contract rights, if any, of the person so removed.
Section 3.03. Duties of the Chairman of the Board. The chairman of the
board, if any, shall preside at all meetings of the directors. He shall have
such other powers and duties as the directors shall from time to time assign to
him.
Section 3.04. Duties of the President. The president shall be the chief
executive officer of the corporation and shall exercise supervision over the
business of the corporation and shall have, among such additional powers and
duties as the directors may from time to time assign to him, the power and
authority to sign all certificates evidencing shares of the corporation and all
deeds, mortgages, bonds, contracts, notes and other instruments requiring the
signature of the president of the corporation. It shall be the duty of the
president to preside at all meetings of shareholders.
Section 3.05. Duties of the Vice Presidents. In the absence of the
president or in the event of his inability or refusal to act, the vice
president, if any (or in the event there be more than one vice president, the
vice presidents in the order designated, or in the absence of any designation,
then in the order of their election), shall perform the duties of the president
and, when so acting, shall have all the powers of and be subject to all
restrictions upon the president. The vice presidents shall perform such other
duties and have such other powers as the directors may from time to time
prescribe.
15
Section 3.06. Duties of the Secretary. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings of the
shareholders and the directors and to make a proper record of the same; to
perform such other duties as may be required by law, the articles or the
regulations; to perform such other and further duties as may from time to time
be assigned to him by the directors or the president; and to deliver all books,
paper and property of the corporation in his possession to his successor or to
the president.
Section 3.07. Duties of the Treasurer. The treasurer, or an assistant
treasurer, if any, in case of the absence or inability to act of the treasurer,
shall receive and safely keep in charge all money, bills, notes, choses in
action, securities and similar property belonging to the corporation, and shall
do with or disburse the same as directed by the president or the directors;
shall keep an accurate account of the finances and business of the corporation,
including accounts of its assets, liabilities, receipts, disbursements, gains,
losses, stated capital and shares, together with such other accounts as may be
required and hold the same open for inspection and examination by the directors;
shall give bond in such sum with such security as the directors may require for
the faithful performance of his duties; shall, upon the expiration of his term
of office, deliver all money and other property of the corporation in his
possession or custody to his successor or the president; and shall
16
perform such other duties as from time to time may be assigned to him by the
directors.
ARTICLE FOUR
SHARES
Section 4.01. Certificates. Certificates evidencing ownership of shares of
the corporation shall be issued to those entitled to them. Each certificate
evidencing shares of the corporation shall bear a distinguishing number; the
signatures of the chairman of the board, the president, or a vice president, and
of the secretary, an assistant secretary, the treasurer or an assistant
treasurer (except that when any such certificate is countersigned by an
incorporated transfer agent or registrar, such signatures may be facsimile,
engraved, stamped or printed); and such recitals as may be required by law.
Certificates evidencing shares of the corporation shall be of such tenor and
design as the directors may from time to time adopt and may bear such recitals
as are permitted by law.
Section 4.02. Transfers. Where a certificate evidencing a share or shares
of the corporation is presented to the corporation or its proper agents which a
request to register transfer, the transfer shall be registered as requested if:
(1) An appropriate person signs on each certificate so presented or
signs on a separate document an assignment or transfer of shares
evidenced by
17
each such certificate, or signs a power to assign or transfer
such shares, or when the signature of an appropriate person is
written without more on the back of each such certificate; and
(2) Reasonable assurance is given that the indorsement of each
appropriate person is genuine and effective. The corporation or
its agents may refuse to register a transfer of shares unless the
signature of each appropriate person is guaranteed by a bank (as
that term is defined in section 3(a) of the Federal Deposit
Insurance Act [12 U.S.C. 1813 (a)]); a broker, dealer, municipal
securities dealer, municipal securities broker, government
securities dealer, government securities broker, national
securities exchange, registered securities association or a
clearing agency (as those terms are defined under the Securities
Exchange Act of 1934, as amended); a credit union (as that term
is defined in section 19(b)(1)(A) of the Federal Reserve Act [12
U.S.C. 461(b)]); or a savings association (as that term is
defined in section 3(b) of the Federal Deposit Insurance Act; and
such guarantee complies with the written standards of the
transfer agent pertaining to the acceptance of guarantees; and
(3) All applicable laws relating to the collection of transfer or
other taxes have been complied with; and
18
(4) The corporation or its agents are not otherwise required or
permitted to refuse to register such transfer.
Section 4.03. Transfer Agents and Registrars. The directors may appoint one
or more agents to transfer or to register shares of the corporation, or both.
Section 4.04. Lost, Wrongfully Taken or Destroyed Certificates. Except as
otherwise provided by law, where the owner of a certificate evidencing shares of
the corporation claims that such certificate has been lost, destroyed or
wrongfully taken, the directors must cause the corporation to issue a new
certificate in place of the original certificate if the owner:
(1) So requests before the corporation has notice that such original
certificate has been acquired by a bona fide purchaser; and
(2) Files with the corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the
corporation, in such sums as the directors may, in their
discretion, deem reasonably sufficient as indemnity against any
loss or liability that the corporation may incur by reason of the
issuance of each such new certificate; and
(3) Satisfies any other reasonable requirements which may be imposed
by the directors, in their discretion.
Section 4.05. Uncertificated Shares. Anything contained in this Article
Fourth to the contrary notwithstanding, the directors may provide by resolution
that some or
19
all of any or all classes and series of shares of the corporation shall be
uncertificated shares, provided that such resolution shall not apply to (A)
shares of the corporation represented by a certificate until such certificate is
surrendered to the corporation in accordance with applicable provisions of Ohio
law or (B) any certificated security of the corporation issued in exchange for
an uncertificated security in accordance with applicable provisions of Ohio law.
The rights and obligations of the holders of uncertificated shares and the
rights and obligations of the holders of certificates representing shares of the
same class and series shall be identical, except as otherwise expressly provided
by law.
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
Section 5.01. Mandatory Indemnification. The corporation shall indemnify
any officer or director of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including, without limitation, any action threatened or instituted by or in the
right of the corporation), by reason of the fact that he 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, trustee, officer, employee or agent of
another corporation (domestic or foreign, nonprofit or for
20
profit), partnership, joint venture, trust or other enterprise, against expenses
(including, without limitation, attorneys' fees, filing fees, court reporters'
fees and transcript costs), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, he had no reasonable cause to believe his
conduct was unlawful. A person claiming indemnification under this Section 5.01
shall be presumed, in respect of any act or omission giving rise to such claim
for indemnification, to have acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation and,
with respect to any criminal matter, to have had no reasonable cause to believe
his conduct was unlawful, and the termination of any action, suit or proceeding
by judgment, order, settlement or conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, rebut such presumption.
Section 5.02. Court-Approved Indemnification. Anything contained in the
regulations or elsewhere to the contrary notwithstanding:
(A) the corporation shall not indemnify any officer or director of the
corporation who was a party to any completed action or suit instituted
by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer,
employee or
21
agent of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, employee or agent of
another corporation (domestic or foreign, nonprofit or for profit),
partnership, joint venture, trust or other enterprise, in respect of
any claim, issue or matter asserted in such action or suit as to which
shall have been adjudged to be liable for acting with reckless
disregard for the best interests of the corporation or misconduct
(other than negligence) in the performance of his duty to the
corporation unless and only to the extent that the Court of Common
Pleas of Trumbull County, Ohio or the court in which such action or
suit was brought shall determine upon application that, despite such
adjudication of liability, and, in view of all the circumstances of
the case, he is fairly and reasonably entitled to such indemnity as
such Court of Common Pleas or such other court shall deem proper; and
(B) the corporation shall promptly make any such unpaid indemnification as
is determined by a court to be proper as contemplated by this Section
5.02.
Section 5.03. Indemnification for Expenses. Anything contained in the
regulations or elsewhere to the contrary notwithstanding, to the extent that an
officer or director of the corporation has been successful on the merits or
otherwise in
22
defense of any action, suit or proceeding referred to in Section 5.01, or in
defense of any claim, issue or matter therein, he shall be promptly indemnified
by the corporation against expenses (including, without limitation, attorneys'
fees, filing fees, court reporters' fees and transcript costs) actually and
reasonably incurred by him in connection therewith.
Section 5.04. Determination Required. Any indemnification required under
Section 5.01 and not precluded under Section 5.02 shall be made by the
corporation only upon a determination that such indemnification of the officer
or director is proper in the circumstances because he has met the applicable
standard of conduct set forth in Section 5.01. Such determination may be made
only (A) by a majority vote of a quorum consisting of directors of the
corporation who were not and are not parties to, or threatened with, any such
action, suit or proceeding, or (B) if such a quorum is not obtainable or if a
majority of a quorum of disinterested directors so directs, in a written opinion
by independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the corporation, or any person to be indemnified, within the past five years, or
(C) by the shareholders, or (D) by the Court of Common Pleas of Trumbull County,
Ohio or (if the corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any. Any such determination may be made by a
court under division (D) of this Section 5.04 at any time [including, without
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limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been denied
or disregarded by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04]. No failure for any reason to make any such
determination, and no decision for any reason to deny any such determination, by
the disinterested directors under division (A) or by independent legal counsel
under division (B) or by shareholders under division (C) of this Section 5.04
shall be evidence in rebuttal of the presumption recited in Section 5.01. Any
determination made by the disinterested directors under division (A) or by
independent legal counsel under division (B) of this Section 5.04 to make
indemnification in respect of any claim, issue or matter asserted in an action
or suit threatened or brought by or in the right of the corporation shall be
promptly communicated to the person who threatened or brought such action or
suit. Within ten (10) days after receipt of such notification, such person shall
have the right to petition the Court of Common Pleas of Trumbull County, Ohio or
the court in which such action or suit was brought, if any, to review the
reasonableness of such determination.
Section 5.05. Advances for Expenses. Expenses (including, without
limitation, attorneys' fees, filing fees, court reporters' fees and transcript
costs) incurred in defending any action, suit or proceeding referred to in
Section 5.01 shall be paid by
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the corporation in advance of the final disposition of such action, suit or
proceeding to or on behalf of the officer or director promptly as such expenses
are incurred by him, but only if such officer or director shall first agree, in
writing, to repay all amounts so paid in respect of any claim, issue or other
matter asserted in such action, suit or proceeding in defense of which he shall
not have been successful on the merits or otherwise:
(A) if it shall ultimately be determined as provided in Section 5.04 that
he is not entitled to be indemnified by the corporation as provided
under Section 5.01; or
(B) if, in respect of any claim, issue or other matter asserted by or in
the right of the corporation in such action or suit, he shall have
been adjudged to be liable for acting with reckless disregard for the
best interests of the corporation or misconduct (other than
negligence) in the performance of his duty to the corporation, unless
and only to the extent that the Court of Common Pleas of Trumbull
County, Ohio or the court in which such action or suit was brought
shall determine upon application that, despite such adjudication of
liability, and in view of all the circumstances, he is fairly and
reasonably entitled to all or part of such indemnification.
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Section 5.06. Article Five Not Exclusive. The indemnification provided by
this Article Five shall not be exclusive of, and shall be in addition to, any
other rights to which any person seeking indemnification may be entitled under
the articles or the regulations or any agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be an officer or director of the
corporation and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
Section 5.07. Insurance. The corporation may purchase and maintain
insurance or furnish similar protection, including but not limited to trust
funds, letters of credit, or self-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, trustee, officer,
employee, or agent of another corporation (domestic or foreign, nonprofit or for
profit), partnership, joint venture, trust or their enterprise, against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
obligation or the power to indemnify him against such liability under the
provisions of this Article Five. Insurance may be purchased from or maintained
with a person in which the corporation has a financial interest.
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Section 5.08. Certain Definitions. For purposes of this Article Five, and
as examples and not by way of limitation:
(A) A person claiming indemnification under this Article 5 shall be deemed
to have been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 5.01, or in defense
of any claim, issue or other matter therein, if such action, suit or
proceeding shall be terminated as to such person, with or without
prejudice, without the entry of a judgment or order against him,
without a conviction of him, without the imposition of a fine upon him
and without his payment or agreement to pay any amount in settlement
thereof (whether or not any such termination is based upon a judicial
or other determination of the lack of merit of the claims made against
him or otherwise results in a vindication of him); and
(B) References to an "other enterprise" shall include employee benefit
plans; references to a "fine" shall include any excise taxes assessed
on a person with respect to an employee benefit plan; and references
to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation
which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan,
its participants or
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beneficiaries. A person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interests of the
corporation" within the meaning of that term as used in this Article
Five.
Section 5.09. Venue. Any action, suit or proceeding to determine a claim
for indemnification under this Article Five may be maintained by the person
claiming such indemnification, or by the corporation, in the Court of Common
Pleas of Trumbull County, Ohio. The corporation and (by claiming such
indemnification) each such person consent to the exercise of jurisdiction over
its or his person by the Court of Common Pleas of Trumbull County, Ohio in any
such action, suit or proceeding.
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Amendments. The regulations of the corporation may only be
amended or new regulations adopted in accordance with the provisions of the
articles of the corporation or the law.
Section 6.02. Action by Shareholders or Directors Without a Meeting.
Anything contained in the regulations to the contrary notwithstanding, except as
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provided in Section 6.01, any action which may be authorized or taken at a
meeting of the shareholders or of the directors or of a committee of the
directors, as the case may be, may be authorized or taken without a meeting with
the affirmative vote or approval of, and in a writing or writings signed by, all
the shareholders who would be entitled to notice of a meeting of the
shareholders held for such purpose, or all the directors, or all the members of
such committee of the directors, respectively, which writings shall be filed
with or entered upon the records of the corporation.
Section 6.03. Seal. The seal of the corporation shall be circular, about
two inches in diameter, with the name of the corporation engraved around the
margin and the word "SEAL" engraved across the center.
Section 6.04. Regulations Supersede Prior By-Laws or Regulations. These
regulations supersede any by-laws or regulations existing at the date of
adoption of these regulations.
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