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Exhibit 3.3
AUGUST 23, 2001
NATIONAL CONSUMER COOPERATIVE BANK
CORPORATE BYLAWS
ARTICLE I
NAME, CHARTER, PURPOSES AND OFFICES
Section 1.1 NAME. The name of the corporation is the National Consumer
Cooperative Bank ("the Bank"). The Bank may conduct its operations under the
trade name, "National Cooperative Bank."
Section 1.2 CHARTER. The Bank is created and chartered as a body
corporate by Act of the Congress of the United States, the National Consumer
Cooperative Bank Act, as amended ("the Bank Act").
Section 1.3 PURPOSES. The purpose of the Bank is to make available
necessary financial and technical assistance to cooperative self-help endeavors
and conduct other activities and operations set forth in the Bank Act.
Section 1.4 OFFICES. The principal office of the Bank shall be in
Washington, District of Columbia. Branch or other offices may be established at
such times and maintained at such places as the Board of Directors may
authorize. The President of the Bank may authorize other work sites for Bank
representatives as he or she may deem necessary.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 GENERAL POWERS. The business and affairs of the Bank shall be
conducted under the direction and control of its Board of Directors ("the
Board"). The powers and responsibilities of the Board are set forth in the Bank
Act and in these Bylaws. The Board shall establish the policies of the Bank
governing its business and affairs and shall direct the management of the Bank.
The Board may adopt such rules and regulations for the conduct of its meetings
and the management of the Bank as it may deem proper, not inconsistent with
these Bylaws and the Bank Act.
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Section 2.2 BOARD COMPOSITION. The number of directors constituting the
entire Board shall be fifteen (15). Three (3) shall be appointed to the Board by
the President of the United States, in the manner specified in the Bank Act and
may be removed only by the President as provided in the Bank Act. Twelve (12)
directors shall be elected by the holders of the Bank's class B stock and the
Bank's class C stock in the manner specified in the Bank Act. No one of the
classes of (1) housing, (2) consumer goods, (3) low-income cooperatives, (4)
consumer services, or (5) all other eligible cooperatives shall be represented
on the Board by less than one or more than three elected directors.
Section 2.3 TERM. All directors shall serve for a term of three (3) years
unless otherwise specified in the Bank Act. No director shall be eligible to be
elected for more than two consecutive full three-year terms. However, any
director may continue to serve until his or her successor has been elected or
appointed and has been qualified and seated, in accordance with the Bank Act,
these Bylaws, and the election rules adopted under section 3.3 of these Bylaws.
The Board, in its sole discretion, may determine when the term of a director
shall commence after any election date and the date on which a director-elect
shall be seated on the Board, assuming the full authority of a director.
Section 2.4 RESIGNATION. Any director may resign at any time. Such
resignation shall be made in writing and shall take effect on the date specified
in the director's written resignation or, if no effective date is specified in
such letter, the date such written resignation is received by the Secretary. A
director's resignation shall be effective as provided without acceptance or
further action by the Board.
Section 2.5 VACANCIES. A director's seat shall be vacant upon the death of
the director; or on the effective date of the director's resignation; or on the
effective date of an appointed director's removal by the President of the United
States. If a vacant seat was held by an elected director, such vacant seat may
be filled by vote of the Board for the remainder of the unexpired term of such
vacant seat.
Section 2.6 COMPENSATION OF DIRECTORS.
a. APPOINTED DIRECTORS. The directors appointed to the Board by the
President shall be compensated as provided in the Bank Act.
b. ELECTED DIRECTORS. The directors who are elected by the holders of
Class B stock and Class C stock shall be entitled to receive such compensation
and reimbursement for expenses for the performance of their duties on the Board
as may be provided from time to time by the Board.
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Section 2.7 OFFICERS OF THE BOARD. The Board shall, at its first meeting
after each annual meeting of stockholders and at such other times as may be
necessary to fill vacancies for officers of the Board, elect one director to be
Chair and one director to be Vice Chair of the Board. It shall also select a
Secretary of the Board, who need not be a director. The Chair, Vice Chair, and
Secretary of the Board shall hold office for one year terms or until their
respective successors shall be selected and take office. The Secretary of the
Board shall prepare and retain minutes of all meetings of the Board and perform
such other duties from time to time as may be assigned by the Board or by the
President. In the absence or disability of the Secretary, the Corporate
Secretary shall perform the duties of the Secretary of the Board.
Section 2.8 REGULAR MEETINGS. Regular meetings of the Board shall be
held at least quarterly at places and times fixed by the Board.
Section 2.9 SPECIAL MEETINGS. Special meetings of the Board may be in
person or telephonic and shall be held upon the call of the Chair or upon the
call of any five directors. Each special in person meeting of the Board shall be
held at the principal office of the Bank, unless the person calling prescribes,
and the notice of such meeting specifies, another place.
Section 2.10 NOTICE OF MEETING. The Secretary of the Board shall give each
director notice of the time, place, or date of each regular meeting of the Board
and notice of the purpose, time, place, date, and calling authority of any
special meeting of the Board. Whenever a regular or special meeting of the Board
shall be recessed, the Secretary of the Board shall give notice of when the
meeting shall reconvene as soon as may be practical under the circumstances.
Section 2.11 METHOD OF GIVING NOTICE. Notice shall be mailed first class
postage prepaid at least ten days prior to the meeting date, or shall be sent
prepaid by express mail, telegram, facsimile or cable, presented for
transmission not later than five days preceding the day of the meeting, or shall
otherwise be delivered to the director not later than three days before the
meeting date. Notice may be waived in writing by a director before, during, or
after a meeting. A director's participation in a meeting is a waiver of notice
of that meeting, unless the director participates solely for the purpose of
objecting to transaction of any business because the meeting was not properly
called or convened.
Section 2.12 QUORUM. At all meetings, the presence of a majority of the
directors qualified and seated at the time of the meeting shall constitute a
quorum for the transaction of business. Except as otherwise specifically
provided in the Bank Act or these Bylaws, the act of a majority of the directors
present at a regular
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or special meeting at which a quorum is present or participating shall be the
act of the Board.
Section 2.13 MEETING RULES. The Board shall conduct its meetings in
accordance with such rules as it may establish from time to time, including
rules on the manner of submitting items for the agenda, the allocation of time
of presentation and debate, and voting. If the Board has not adopted its own
rules, and for matters not addressed in any rules adopted by the Board, meetings
shall be conducted in accordance with the procedures for meetings described in
ROBERTS RULES OF ORDER, latest edition, unless such procedures are otherwise
inconsistent with these Bylaws or the Bank Act.
Section 2.14 PUBLIC OBSERVATION.
(a) OPEN MEETINGS. Except as provided in subsection (b), meetings of the
Board and its committees shall be open to members or representatives of all
eligible cooperatives, eligible organizations and invited persons, as observers
only.
(b) CLOSED MEETINGS. Meetings of the Board and its committees may be
closed to public observation and attendance may be further limited only to
directors, as provided in the Bank Act and rules established by the Board not
inconsistent with the Bank Act.
(c) NOTICE OF MEETING. The Board and its committees shall make a public
announcement of all meetings. Generally notice shall be provided at the Bank at
least seven (7) days before a meeting is scheduled, but shorter notice may be
provided at the earliest practicable time.
Section 2.15 RECORDS. Copies of proceedings of regular and special
meetings of the Board, the Bylaws and any amendments thereto, reports of
committees of directors and proceedings of the Executive Committee, or any
standing committees, shall be recorded in the minute books of the Bank. The
minutes of the Board and its committees shall be signed by the Chair of the
Board or the Chair of the committee or the Secretary of the Board.
Section 2.16 ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting, if written consent thereto is signed by all members of the
Board or of such committee as the case may be and such written consent is filed
with the minutes of proceedings of the Board or committee.
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ARTICLE III
ELECTION OF DIRECTORS
Section 3.1 RECORD DATE. The Board shall fix a date not less than ninety
(90) days prior to the date of any election or special election as the record
date for determining stockholders of record entitled to vote. The record date
for any run-off election shall be the same record date established under this
section for the original election.
Section 3.2 NOTICE.
(a) The Corporate Secretary shall give notice of any election to all
stockholders of record at least sixty (60) days preceding an election, special
election or run-off election. Notice shall be mailed to stockholders of record
at the address appearing on the Corporate Secretary's records. An official
ballot which shall describe the qualifications of nominees and their positions
on issues, the date when ballots must be received by the Bank, and all other
information necessary for participation in the election shall be mailed to
stockholders of record no later than thirty days preceding an election.
(b) WAIVER. Participation by any stockholder in any election shall
constitute a waiver by that stockholder of notice of such election, except where
the participation is for the express purpose of objecting to the transaction of
any business because the election or meeting was not properly called. A written
waiver of notice of any election signed by an authorized officer or a
stockholder shall be deemed equivalent to giving proper notice to such
stockholder.
Section 3.3 NOMINATIONS AND ELECTION PROCEDURES. The Board shall adopt
election rules, consistent with the provisions of the Bank Act, governing
nominations to vacant directorships and procedures for the conduct of elections.
Such election rules may provide procedures that will cause, over the course of
several succeeding elections, the arrangement of the terms of all elected
directors so that the terms of no more than one-third of them will expire in the
same year. Such election rules shall provide procedures for nomination of
candidates by stockholders, in addition to other procedures; provided that each
stockholder nominee must establish support by at least fifteen percent (15%) of
the stockholders eligible to vote on the record date for the election. The
decision of the Board on any matter that shall arise with regard to the election
rules described in these Bylaws shall be final. No
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contested director shall participate in any decision with respect to such
dispute.
ARTICLE IV
BOARD COMMITTEES
Section 4.1 EXECUTIVE COMMITTEE. There shall be constituted an Executive
Committee which shall be accountable to the full Board. The members of the
Executive Committee shall be the Chair of the Board, the Vice Chair of the
Board, the Chair of each Standing Committee of the Board and the Chair of NCB
Development Corporation, so long as the latter person is also a member of the
Board of the Bank. The Chair of the Board shall be the chair of the Executive
Committee.
(a) DUTIES AND RESPONSIBILITIES. Except as otherwise limited in these
Bylaws, the Executive Committee shall exercise all of the powers of the Board
when the Board is not in session, when waiting for the next regular meeting of
the Board will adversely affect the best interests of the Bank. All actions of
the Executive Committee on behalf of the Board shall be subject to review and
ratification by the Board at its next meeting.
(b) COMMITTEE MEETINGS AND MINUTES. The Executive Committee shall meet at
stated times, at the call of the Chair or at the request of at least three (3)
members of the committee. Four members of the Committee shall constitute a
quorum. Minutes of each Executive Committee meeting shall be prepared and shall
be made available to the full Board.
Section 4.2 STANDING COMMITTEES OF THE BOARD. The standing committees of
the Board shall be (a) the Audit Committee and (b) the Compensation Committee.
The chair of the Board, subject to approval of the Board, shall appoint
directors to standing committees, including one director to be chair of each
committee.
Section 4.3 OTHER COMMITTEES. The Board may by resolution establish such
other committees of directors as it deems necessary or desirable. The Chair of
the Board, subject to approval of the Board, shall appoint directors to
committees, including one director to be chair of each committee. The Chair of
the Board may establish and appoint ad hoc committees at his or her discretion.
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Section 4.4 DELEGATIONS TO COMMITTEES. In addition to the authority
granted to the committees in these Bylaws, the Board may by Resolution delegate
to a committee the power to exercise the authority of the full Board on
specified matters, provided however, that no committee, including the Executive
Committee, shall have authority to take any of the following actions:
(a) the filling of vacancies on any committee of directors;
(b) the fixing of compensation of directors;
(c) the amendment or repeal of these Bylaws or the adoption of new Bylaws;
(d) the adoption of Bank policies;
(e) the declaration of patronage refunds or dividends on stock; and
(f) the termination or appointment of the President of the Bank.
Section 4.5 COMMITTEE PROCEDURE, QUORUM. Except as otherwise provided in
these Bylaws or a resolution of the Board establishing the committee, or for ad
hoc committees, a majority of a committee shall constitute a quorum thereof, the
act of a majority of those present or participating at a meeting where a quorum
is present shall be the act of the committee, and meetings of each committee
shall be called by the chair of the committee or a majority of its members. Each
committee shall provide such reports at such times as the Board may require. All
committees, including the Executive Committee, may transact business by in
person or telephonic meetings, in accordance with the rules applicable to Board
meetings set forth in Article II of these Bylaws.
ARTICLE V
OPERATING OFFICERS, AGENTS, AND EMPLOYEES
Section 5.1 OFFICERS. The officers of the Bank shall be the President, the
Treasurer, the Corporate Secretary, and such other officers as the Board may
establish, each of whom shall have such authority and perform such duties as the
President may delegate.
Section 5.2 APPOINTMENT, TERM OF OPERATING OFFICERS, AND QUALIFICATIONS.
All officers of the Bank who report directly to the President should be
appointed by the President and ratified by the Board. No officer may be a
director of the Bank. The
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President shall be appointed by the Board and may be removed by the Board.
Section 5.3 THE PRESIDENT. The President of the Bank shall be its Chief
Executive Officer and shall have full responsibility and full authority for the
day-to-day administration of the affairs of the Bank, under the general
supervision of the Board. The President shall also have such other powers and
perform such other duties as the Board may from time to time prescribe. The
President shall supervise all other officers, employees and agents of the Bank.
Except as otherwise provided by the Board or in these Bylaws, the President may
delegate the authority of that officer among the operating officers and
employees of the Bank as he or she deems necessary or convenient for the
efficient operation of the Bank.
Section 5.4 THE TREASURER. The Treasurer, who shall also be an officer of
the Bank, shall (a) have charge and custody of, and be responsible for, all
funds and securities of the Bank, and shall deposit all such funds and
securities in depositories selected according to resolutions adopted by the
Board; (b) receive, and give receipts for, monies due and payable to the Bank
from any source whatsoever; (c) sign such documents as require the signature of
the Treasurer; and (d) perform all duties incident to the office of Treasurer
and such other duties as from time to time may be assigned by the Board or by
the President.
Section 5.5 THE CORPORATE SECRETARY. The Corporate Secretary shall be
responsible for the custody of all Bank books, records and files and
correspondence of the Bank, except as shall be in the charge of the Treasurer,
the Secretary of the Board or of some other person authorized to have custody
and possession thereof by the Board or the President. The Corporate Secretary
shall have custody of the seal of the corporation and shall affix the same to
all instruments requiring it. The President may appoint one or more assistant
secretaries to perform such duties and to have such powers of the Corporate
Secretary as shall from time to time be assigned to them by the President.
ARTICLE VI
CAPITALIZATION
Section 6.1 CLASS A NOTES.
On the Final Government Equity Redemption Date, as defined in the Bank Act
(December 31, 1981), the Bank fully redeemed all of the Class A preferred stock
held by the Secretary of the Treasury in exchange for Class A notes, which were
issued by the Bank to the
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Secretary of the Treasury on behalf of the United States. The Class A notes have
a total face value equal to the total par value of the Class A stock which was
so redeemed, are payable as to principal and interest as provided in the Bank
Act, and are subordinate to all obligations issued by the Bank after December
31, 1981, except for obligations relating to any class of stock issued by the
Bank.
Section 6.2 COMMON STOCK.
(a) AUTHORITY TO ISSUE. The capital stock of the Bank shall be issued by
the Board under the authority of the Bank Act.
(b) CLASS B STOCK. Class B stock shall be common stock with voting rights
as specified in these Bylaws. Class B stock shall be issued to and held only by
eligible cooperatives who are recipients of loans and shall be transferable only
in strict compliance with capitalization policies adopted by the Board.
Borrowers shall be required to own Class B stock in an amount equal to one
percent (1%) of the face amount of the loan at the time the loan is made. Class
B stock shall be issued at par value as shall be determined by the Board and
classified series 1 and 2, the former of which constitutes class B stock
purchased for cash at par value on or after June 29, 1984, and the latter of
which constitutes all other Class B stock.
(c) CLASS C STOCK. Class C stock shall be common stock with voting rights
as specified in these Bylaws. Class C stock shall be available for purchase and
shall be held only by borrowers, by organizations controlled by such borrowers
or by other eligible cooperatives. Class C stock shall be issued at par value as
shall be determined by the Board. Class C stock may be transferred only to
another eligible cooperative. If a Class C stockholder becomes a recipient of a
new loan, Class C stock, in an amount equal to one percent (1%) of the face
amount of the loan commitment, may be converted to Class B stock provided that
such conversion privilege shall only apply to Class C stock purchased for cash
from the Bank.
(d) NONVOTING COMMON STOCK. The Board may authorize and issue other
classes and series of nonvoting common stock with such rights, powers,
privileges and preferences of the separate classes as the Board may specify.
Such stock may be issued in fractional shares and sold, transferred or pledged
when authorized by the Board in accordance with the Bank Act.
(e) PREFERENCES AND DIVIDENDS. The common stock shall be subject to the
prior rights of the holders of Class A notes as specified in the Bank Act. No
dividend shall be paid on Class B stock. The Board may declare dividends,
payable only from income, on Class C stock, at such rate and under such terms
and conditions as it may determine; except that until all Class A notes have
been
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retired, the rate of such dividends shall not exceed the statutory interest rate
for Class A notes.
(f) VOTING RIGHTS.
(i) Only stockholders holding shares of record with voting power
will be entitled to vote. Regardless of the number of shares of stock of any
class or series held by a stockholder, and as shall be further defined in
election rules adopted pursuant to Section 3.3 of these Bylaws, each stockholder
of record with one or more shares of voting stock shall be entitled to vote in
the affairs of the Bank as hereinafter provided: (A) each borrower-stockholder
of record shall be entitled to five (5) votes; (B) each non-borrower stockholder
shall receive one vote; and (C) each stockholder of record shall be entitled to
additional votes based upon factors as stated in the election rules, except
that, notwithstanding the allocations of votes that would otherwise be made
under this section, no voting stockholder shall be entitled to more than five
percent (5%) of the total voting control held by all voting stockholders and no
stockholder that is a developing cooperative (as that term is defined in
election rules) shall receive more than five (5) votes.
(ii) The Board may at any time alter the voting rights for certain
stockholders as is provided in the Bank Act.
(g) NO LIENS ON STOCK. No stockholder shall cause or permit the creation
of any security interest or other lien or encumbrance in favor of any person
(other than, by separate agreement, the Bank) with respect to any shares of any
class of capital stock of the Bank. The Bank will not honor any request of any
stockholder or other person to indicate in any way on its books or records the
existence of any such encumbrance.
(h) TRANSFER ON THE BOOKS OF THE BANK. Transfers of shares of any class or
series of stock shall not be valid unless and until registered on the books of
the Bank. No transfer shall be registered on the books of the Bank without the
approval of the Bank.
(i) INVOLUNTARY EXCHANGE. In the event the Bank shall determine, in its
sole discretion, that a formerly eligible cooperative stockholder has dissolved
or become inactive, or is not functioning as an eligible cooperative
organization, full ownership and title to any and all of the stock of the Bank
held by such stockholder as shown on the books of the Bank shall pass to and
become vested in the Bank. The Bank may, in its sole discretion, authorize the
involuntary exchange of shares of Class B or Class C stock for an equivalent
dollar amount of any class or series of non-voting common stock as shall then be
authorized for issuance. For purposes of this section, the Bank may determine
the value of the stock to be purchased or exchanged without right of appraisal
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not to exceed par. If any holder of stock is more than sixty (60) days past due
on any indebtedness to the Bank, the Bank may at its sole option and discretion
apply the price or exchange value of that holder's shares to reduce the total
amount of such indebtedness.
(j) REDEMPTION OR REPURCHASE. The Bank shall retire the Class A notes as
provided in the Bank Act and these Bylaws. Class B and Class C stock are not
redeemable, except that the Board may at its pleasure establish policies for the
redemption or repurchase by the Bank of Class B or Class C stock at such values,
not exceeding par, and under such terms and conditions as it may determine. For
purposes of any such policies, the Board may treat stock purchased from the Bank
differently from stock distributed as a patronage refund.
ARTICLE VII
DISTRIBUTION OF EARNINGS
After payment of all operating expenses of the Bank, including interest on
its obligations, and after setting aside appropriate funds for any dividends
payable on any class of stock, for reserves for losses, for interest payments on
Class A notes, and for any redemption of Class A notes, the Bank shall annually
set aside the remaining earnings of the Bank for patronage refunds, under
patronage refund policies that shall be adopted by the Board consistent with the
Bank Act.
ARTICLE VIII
STOCKHOLDERS' MEETINGS
Section 8.1 ANNUAL MEETING. The Bank shall hold an annual meeting of its
stockholders in each calendar year at such time and place, or at such other
location as the Board may determine, to receive reports of the Bank's activities
during the year and of the Bank's financial condition and to conduct such other
business as may come before the meeting according to these Bylaws and such rules
as the Board may from time to time adopt.
Section 8.2 SPECIAL MEETINGS. Special meetings of the stockholders may be
called by the affirmative vote of two-thirds of the Board of Directors.
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Section 8.3 RECORD DATE. The record date for an annual or special meeting
of stockholders shall be the ninetieth (90) day prior to the date of the meeting
or such other date as is provided in the Rules adopted by the Board under
Section 3.3 of these Bylaws.
Section 8.4 NOTICE OF MEETING.
(a) The Secretary shall give notice of an annual or special meeting of
stockholders to all stockholders of record by the ninetieth day preceding such
meeting. Notice stating the date, time, place and agenda for the meeting shall
be mailed to each such stockholder at the stockholder's address appearing on the
records of the Bank. Such notice shall include an official ballot for any
proposals presented pursuant to Section 8.6. No notice of any recessed meeting
of the stockholders need be given if the time and place to which the meeting is
recessed are announced at the meeting at which the recess is taken, and provided
a new record date is not set for the meeting.
(b) Participation by any stockholder, either in person or by mail, in any
meeting of which it is entitled to notice shall constitute a waiver by that
stockholder of notice of such meeting, except where the participation is for the
express purpose of objecting to the transaction of any business because the
election or meeting was not properly called. A written waiver of notice of any
meeting signed by an authorized officer of a stockholder shall be deemed
equivalent to giving proper notice to such stockholder.
Section 8.5 MANNER AND EFFECT OF VOTE BY SHAREHOLDERS.
(a) Representatives of the holders of voting stock may cast votes in
person or by mail for any matter properly placed on the agenda of an annual or
special meeting for advisory vote of the stockholders.
(b) Each stockholder eligible to vote shall designate one representative
who shall be entitled to cast its vote. The stockholder's representative must be
designated by presenting to the Bank a written authorization from the
stockholder's governing body in accordance with rules adopted by the Board under
Section 3.3 of these Bylaws.
Section 8.6 STOCKHOLDER PROPOSALS. The Bank's stockholders eligible to
vote shall be entitled to present written proposals for consideration and
adoption by all stockholders participating in any annual or special meeting of
stockholders according to rules adopted by the Board and included as an exhibit
to each notice given under section 8.4 of these Bylaws.
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Section 8.7 QUORUM. The stockholders participating in person or by mail in
a meeting for which a required notice has been given shall constitute a quorum.
Section 8.8 PROCEDURES. The Chair shall preside at all meetings of
stockholders. All meetings shall be conducted according to rules adopted by the
Board. If the Board has not adopted its own rules, and as to matters not covered
in any rules adopted by the Board, meetings shall be conducted in accordance
with the procedures for meetings described in ROBERTS RULES OF ORDER, latest
edition, unless such procedures are otherwise inconsistent with these Bylaws or
the Bank Act.
ARTICLE IX
INDEMNIFICATION/INSURANCE
Section 9.1 ACTION, ETC. OTHER THAN BY OR IN THE RIGHT OF THE BANK. The
Bank shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
or investigation, whether civil, criminal or administrative, and whether
external or internal to the Bank other than a judicial action or suit brought by
or in the right of the Bank, by reason of the fact that he or she is or was a
director, officer, employee, or trustee of the Bank or is or was serving at the
specific written request of the Bank as a director, officer, employee or trustee
of another corporation, partnership, joint venture, trust or other enterprise
(all such persons being referred to hereafter as an "Agent"), 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 Bank,
and with respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful. 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 or she reasonably
believed to be in or not opposed to the best interests of the Bank, and, with
respect to any criminal action or proceeding, that he or she had reasonable
cause to believe that his or her conduct was unlawful.
Section 9.2 ACTION, ETC., BY OR IN THE RIGHT OF THE BANK. The Bank shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed judicial action or suit brought by or in
the right of the
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Bank to procure a judgment in its favor by reason of the fact that he or she is
or was an Agent (as defined above) against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit 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 Bank, except that no indemnification shall be made with respect
to any claim, issue or matter as to which such person shall have been adjudged
to be liable for negligence or misconduct in the performance of his or her duty
to the Bank unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
Section 9.3 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any indemnification
under Section 9.1 or 9.2 (unless ordered by a court) shall be made by the Bank
unless a determination is reasonably and promptly made (i) by the Board by a
vote of two-thirds of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the stockholders,
that such person acted in bad faith and in a manner that such person did not
believe to be in or not opposed to the best interests of the Bank, or with
respect to any criminal proceeding, that such person believed or had reasonable
cause to believe that his or her conduct was unlawful.
Section 9.4 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, including the dismissal of
an action without prejudice or the settlement of an action without admission of
liability, in defense of any proceeding or in defense of any claim, issue or
matter therein, such Agent shall be indemnified against all expenses incurred in
connection therewith.
Section 9.5 ADVANCES OF EXPENSES. Except as limited by Section 6 of this
Article, expenses incurred in any action, suit, proceeding or investigation
shall be paid by the Bank in advance of the final disposition of such matter, if
the Agent shall undertake to repay such amount in the event that it is
ultimately determined as provided herein, that such person is not entitled to
indemnification. Notwithstanding the foregoing, no advance shall be made by the
Bank if a determination is reasonably and promptly made by the Board of
directors by a vote of two-thirds of a quorum of disinterested directors, or (if
such a quorum is not obtainable or, even if obtainable, a quorum of
disinterested directors, so directs) by independent legal counsel in a written
opinion, that, based upon the facts known to the Board or counsel at the time
such
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determination is made, such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interest of the Bank,
or with respect to any criminal proceeding, that such person believed or had
reasonable cause to believe his or her conduct was unlawful. In no event shall
any advance be made in instances where the Board or independent legal counsel
reasonably determined that such person deliberately breached his or her duty to
the Bank or its shareholders.
Section 9.6 RIGHT OF AGENT TO INDEMNIFICATION UPON APPLICATION: PROCEDURE
UPON APPLICATION. Any indemnification under Sections 9.2, 9.3 and 9.4, or
advance under section 9.5 of this Article, shall be made promptly, and in any
event within ninety days (90), upon the written request of the Agent, unless
with respect to applications under Section 9.2, 9.3, or 9.5, a determination is
reasonably and promptly made by the Board of Directors by a vote of two-thirds
of a quorum of disinterested directors that such Agent acted in a manner set
forth in such Sections as to justify the Bank's not indemnifying or making an
advance to the agent. In the event no quorum of disinterested directors is
obtainable, the Board of Directors shall promptly direct that independent legal
counsel shall decide whether the Agent acted in the manner set forth in such
Sections as to justify the Bank's not indemnifying or making an advance to the
Agent. The right to indemnification or advances as granted by this Article shall
be enforceable by the Agent in any court of competent jurisdiction, if the Board
or independent legal counsel denies the claim, in whole or in part, or if no
disposition of such claim is made within ninety (90) days. The Agent's expense
incurred in connection with successfully establishing his or her right to
indemnification, in whole or in part, in any such proceeding shall also be
indemnified by the Bank.
Section 9.7 OTHER RIGHTS AND REMEDIES. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which an Agent
seeking indemnification may be entitled under any bylaws, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her 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 agent and
shall inure to the benefit of the heirs, executors and administrators of such
person. All rights to indemnification under this Article shall be deemed to be
provided by a contract between the Bank and the Agent who serves in such
capacity at any time while these Bylaws and other relevant provisions of the
general corporation law and other applicable law, if any, are in effect. Any
repeal or modification thereof shall not affect any rights or obligations then
existing.
Section 9.8 INSURANCE. Upon resolution passed by the Board, the Bank may
purchase and maintain insurance on behalf of any person who is or was Agent
against any liability asserted against him or her and incurred by him or her in
any such capacity, or arising out
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of his or her status as such, whether or not the Bank would have the power to
indemnify him or her against such liability under the provisions of this
Article.
Section 9.9 OTHER ENTERPRISES, FINES, AND SERVING AT BANK'S REQUEST. For
purposes of this Article, references to "other enterprise" in Section 9.1 shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the specific written request of the Bank" shall
include any service as a director, officer, employee, or trustee of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or trustee, with respect to any employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he or she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the Bank" as referred to in this
Article.
Section 9.10 SAVINGS CLAUSE. If this Article or any portion thereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Bank shall nevertheless indemnify each Agent as to expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit, proceeding or investigation whether civil, criminal or
administrative, and whether internal or external, including a grand jury
proceeding and an action or suit brought by or in the right of the Bank, to the
full extent permitted by any application portion of this Article that shall not
have been invalidated, or by any other applicable law.
ARTICLE X
AMENDMENTS
These Bylaws may be amended or repealed or new Bylaws may be adopted only by the
affirmative vote of two-thirds (2/3) of the directors seated at the time of such
vote. The Board shall, wherever practicable, solicit advisory stockholder
comments on proposed Bylaw amendments.
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ARTICLE XI
MISCELLANEOUS
Section 11.1 FISCAL YEAR. The Bank's fiscal year shall begin on the first
day of January and end on the last day of December of each year.
Section 1.2 SEAL. The Seal of the Bank shall be such as shall be adopted
and approved by the Board of Directors. The Seal may be affixed by impression,
printing, rubber stamp or otherwise.
Section 11.3 CONFLICT OF INTEREST. The Board shall adopt and publish
conflict of interest rules which implement Section 114 of the Bank Act. The
rules shall prohibit the Bank directors, officers and employees from
participation or action or the use of inside information for personal advantage
on any Bank matters and shall provide procedures for enforcement of such rules.
Section 11.4 ELIGIBLE COOPERATIVES. An eligible cooperative is an
organization the Bank determines to be eligible under the provisions of Section
105 of the Bank Act and the eligibility policies the Board may adopt from time
to time to implement Section 105 of the Bank Act.
Section 11.5 LIMITATION ON DIVIDENDS FOR ELIGIBLE COOPERATIVES. An eligible
cooperative shall not pay dividends on membership capital or voting stock at a
percentage rate in excess of the rate permitted under its charter or bylaws or
by applicable laws of the state of its incorporation; provided that the Board
reserves the right to determine and publish from time to time maximum dividend
rates payable by eligible cooperatives to which the Bank extends credit.