United States
Securities and Exchange Commission
Washington, D.C. 20549
----------
Form 10-Q
[x] Quarterly Report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended September 30, 1998
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-27178
Peekskill Financial Corporation
(Exact name of the registrant as specified in its charter)
Delaware 13-3858258
(State of incorporation) (I.R.S. Employer Identification No.)
1019 Park Street, Peekskill, New York 10566
(Address of principal executive offices)
(914) 737-2777
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes __x__ No _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares Outstanding
Class: at October 30, 1998
------ -------------------
Common Stock, $0.01 par value 2,842,069
<PAGE>
Peekskill Financial Corporation
Form 10-Q
Quarterly Period Ended September 30, 1998
Part I - Financial Information
ITEM 1 - FINANCIAL STATEMENTS (Unaudited) Page
Condensed Consolidated Balance Sheets at September 30, 1998
and June 30, 1998 3
Condensed Consolidated Statements of Income for the three
months ended September 30, 1998 and 1997 4
Condensed Consolidated Statement of Changes in Stockholders'
Equity for the three months ended September 30, 1998 5
Condensed Consolidated Statements of Cash Flows for the three
months ended September 30, 1998 and 1997 6
Notes to Condensed Consolidated Interim Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 14
Part II - Other Information
Other Information 15
Signatures 16
2
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Peekskill Financial Corporation and Subsidiary
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
September 30, 1998 June 30, 1998
------------------ -------------
<S> <C> <C>
Assets:
Cash and cash equivalents ................................ $ 1,248 $ 4,626
Securities:
Held-to-maturity, at amortized cost (fair value of
$128,772 at September 30, 1998 and $136,883
at June 30, 1998) ................................... 126,997 135,446
Available-for-sale, at fair value (amortized cost of
$15,500 at September 30, 1998 and $8,500 at
June 30, 1998) ...................................... 15,606 8,498
--------- ---------
Total securities ..................................... 142,603 143,944
--------- ---------
Loans, net of allowance for loan losses of $697 at
September 30, 1998 and $682 at June 30, 1998 ........ 51,913 47,631
Federal Home Loan Bank stock ............................. 1,463 1,463
Accrued interest receivable .............................. 995 1,050
Real estate owned ........................................ 94 94
Deferred income taxes, net ............................... 349 362
Other assets ............................................. 1,233 1,171
--------- ---------
Total assets ........................................... $ 199,898 $ 200,341
========= =========
Liabilities and Stockholders' Equity:
Liabilities:
Depositor accounts ..................................... $ 140,466 $ 139,858
Securities repurchase agreements ....................... 13,000 13,000
FHLB advance ........................................... 1,000 --
Mortgage escrow deposits ............................... 1,102 1,759
Other liabilities ...................................... 1,333 2,518
--------- ---------
Total liabilities .................................... 156,901 157,135
--------- ---------
Stockholders' equity (Note 2):
Preferred stock (par value $0.01 per share;
100,000 shares authorized; none issued or
outstanding) ........................................... -- --
Common stock (par value $0.01 per share; 4,900,000
shares authorized; 4,099,750 shares issued) ............ 41 41
Additional paid-in capital ............................... 40,221 40,181
Unallocated common stock held by employee stock
ownership plan ("ESOP") ................................ (2,829) (2,870)
Unamortized awards of common stock under recognition
and retention plan ("RRP") ............................. (918) (922)
Treasury stock, at cost (1,239,681 shares at September 30,
1998 and 1,204,181 shares at June 30, 1998) ............ (18,312) (17,730)
Retained earnings ........................................ 24,731 24,508
Net unrealized gain (loss) on available-for-sale
securities, net of taxes ................................. 63 (2)
--------- ---------
Total stockholders' equity .............................. 42,997 43,206
--------- ---------
Total liabilities and stockholders' equity ............ $ 199,898 $ 200,341
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated interim financial
statements.
3
<PAGE>
Peekskill Financial Corporation and Subsidiary
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
For the Three Months
Ended September 30,
1998 1997
------ ------
Interest and dividend income:
Loans ....................................... $ 990 $ 918
Securities .................................. 2,289 2,087
Interest-bearing deposits and other ......... 76 90
------ ------
Total interest and dividend income ......... 3,355 3,095
------ ------
Interest expense:
Depositor accounts .......................... 1,513 1,446
Securities repurchase agreements ............ 178 --
FHLB advance ................................ 4 --
------ ------
Total interest expense ..................... 1,695 1,446
------ ------
Net interest income ........................ 1,660 1,649
Provision for loan losses .................... 15 15
------ ------
Net interest income after provision
for loan losses ........................... 1,645 1,634
------ ------
Non-interest income .......................... 63 57
------ ------
Non-interest expense:
Compensation and benefits .................. 455 450
Occupancy costs ............................ 112 92
Professional fees .......................... 38 33
Computer service fees ...................... 52 43
Federal deposit insurance costs ............ 36 36
Safekeeping and custodial expenses ......... 29 24
Other ...................................... 163 148
------ ------
Total non-interest expense ............... 885 826
------ ------
Income before income tax expense .......... 823 865
Income tax expense ........................... 367 370
------ ------
Net income ................................. $ 456 $ 495
====== ======
Earnings per share (Note 3):
Basic ...................................... $ 0.18 $ 0.18
Diluted .................................... 0.18 0.17
See accompanying notes to unaudited condensed consolidated interim financial
statements.
4
<PAGE>
Peekskill Financial Corporation and Subsidiary
Condensed Consolidated Statement of Changes in Stockholders' Equity
(Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
Unallocated Unamortized
Net
Common Awards of Unrealized
Additional Stock Common Gain (Loss) Total
Common Paid-in Held Stock Treasury Retained On Stockholders'
Stock Capital By ESOP Under RRP Stock Earnings Securities Equity
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1998 ............ $ 41 $ 40,181 $ (2,870) $ (922) $(17,730) $ 24,508 $ (2) $ 43,206
Net income ....................... -- -- -- -- -- 456 -- 456
Dividends paid ($0.09 per share) . -- -- -- -- -- (233) -- (233)
Amortization of RRP awards ....... -- -- -- 48 -- -- -- 48
RRP award (2,500 treasury shares) -- 14 -- (44) 30 -- -- --
Purchase of 38,000 treasury
shares ........................ -- -- -- -- (612) -- -- (612)
ESOP shares committed to be
released (4,100 shares) ....... -- 26 41 -- -- -- -- 67
Change in net unrealized gain
(loss) on available-for-sale
securities, net of taxes .... -- -- -- -- -- -- 65 65
-------- -------- -------- -------- -------- -------- -------- --------
Balance at September 30, 1998 ....... $ 41 $ 40,221 $ (2,829) $ (918) $(18,312) $ 24,731 $ 63 $ 42,997
======== ======== ======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated interim financial
statements.
5
<PAGE>
Peekskill Financial Corporation and Subsidiary
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
September 31,
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income ................................................ $ 456 $ 495
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses ............................... 15 15
Depreciation and amortization expense ................... 24 22
ESOP and RRP expense .................................... 115 118
Net amortization and accretion of deferred fees,
discounts and premiums ............................... (59) (45)
Net decrease in accrued interest receivable ............. 55 134
Net (increase) decrease in other assets ................. (66) 14
Deferred tax expense .................................... 13 2
Net increase in other liabilities ....................... 166 177
-------- --------
Net cash provided by operating activities ............. 719 932
-------- --------
Cash flows from investing activities:
Purchases of securities:
Held-to-maturity ........................................ (7,436) (5,014)
Available-for-sale ...................................... (9,992) (2,000)
Proceeds from principal payments, maturities and calls of
securities:
Held-to-maturity ........................................ 15,893 8,999
Available-for-sale ...................................... 3,000 1,000
Originations of loans, net of principal collections ....... (4,297) (1,052)
Purchases of office properties and equipment .............. (20) (391)
-------- --------
Net cash (used in) provided by investing activities .... (2,852) 1,542
-------- --------
Cash flows from financing activities:
Net increase (decrease) in depositor accounts ............. 608 (556)
Net decrease in mortgage escrow deposits .................. (658) (771)
Proceeds from Federal Home Loan Bank advance .............. 1,000 --
Treasury stock purchases .................................. (1,962) --
Dividends paid ............................................ (233) (287)
-------- --------
Net cash used in financing activities .................. (1,245) (1,614)
-------- --------
Net (decrease) increase in cash and cash equivalents ........ (3,378) 860
Cash and cash equivalents at beginning of period ............ 4,626 4,158
-------- --------
Cash and cash equivalents at end of period .................. $ 1,248 $ 5,018
======== ========
Supplemental information:
Interest paid ............................................. $ 1,697 $ 1,442
Income taxes paid ......................................... 318 263
Decrease in liability for securities purchased,
not yet settled ........................................ -- 499
Decrease in liability for treasury stock purchased, not yet
settled ................................................ 1,350 --
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated interim financial
statements.
6
<PAGE>
PEEKSKILL FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: Basis of Presentation
Peekskill Financial Corporation (the "Holding Company") was incorporated in
September 1995 and on December 29, 1995 became the holding company for First
Federal Savings Bank (the "Bank") upon the completion of the Conversion of the
Bank from a mutual savings bank to a stock savings bank (the "Conversion"). The
Holding Company and the Bank (collectively, the "Company") are located in
Peekskill, New York and the Holding Company's principal business, subsequent to
the Conversion, is the ownership of its wholly-owned subsidiary, the Bank. The
accompanying unaudited condensed consolidated interim financial statements
include the accounts of the Holding Company and the Bank.
The accompanying unaudited condensed consolidated interim financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. The accompanying unaudited
condensed consolidated interim financial statements should be read in
conjunction with the financial statements and related management's discussion
and analysis of financial condition and results of operations of the Company as
of and for the year ended June 30, 1998 included in the Form 10-K filed with the
Securities and Exchange Commission. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included herein. The results of operations for the
three months ended September 30, 1998 are not necessarily indicative of results
that may be expected for the entire year ending June 30, 1999.
NOTE 2. Stockholders' Equity
From July 1, 1998 through September 30, 1998, the Holding Company purchased
38,000 shares for treasury at a cost of $612,000, or $16.10 per share. From the
date of Conversion through September 30, 1998, the Holding Company purchased an
aggregate of 1,239,681 shares for treasury. The Holding Company purchased these
shares, in open market transactions, at a total cost of $18.3 million or $14.77
per share.
On June 11, 1998, the Holding Company received approval from the OTS to
repurchase up to 5% of its outstanding common stock, or 148,528 shares. As of
October 31, 1998, the Holding Company had repurchased 131,000 shares, leaving
17,528 shares available to be purchased through December 29, 1998.
7
<PAGE>
Note 3. Earnings Per Share
The Company reports both basic and diluted earnings per share ("EPS") in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share." Basic EPS excludes dilution and is computed by dividing
net income available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
(such as stock options) were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. Diluted EPS is computed by dividing net income by the weighted average
number of common shares outstanding for the period plus common-equivalent shares
computed using the treasury stock method.
The table below summarizes the number of shares utilized in the Company's
EPS calculations for the three month periods ended September 30, 1998 and 1997.
For purposes of computing basic EPS, net income applicable to common stock
equaled net income for both periods presented.
For the Three Months
Ended September 30,
1998 1997
----- -----
(In thousands)
Weighted average common shares outstanding
for computation of basic EPS (1) 2,516 2,791
Common-equivalent shares due to the dilutive
effect of stock options and RRP awards (2) 86 95
----- -----
Weighted average common shares for
computation of diluted EPS 2,602 2,886
===== =====
(1) Excludes unvested RRP awards and unallocated ESOP shares that have not been
committed to be released.
(2) Computed using the treasury stock method.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
The Company has made, and may continue to make, various forward-looking
statements with respect to earnings, credit quality and other financial and
business matters for periods subsequent to September 30, 1998. The Company
cautions that these forward-looking statements are subject to numerous
assumptions, risks and uncertainties, and that statements for subsequent periods
are subject to greater uncertainty because of the likelihood of changes in
underlying factors and assumptions. Actual results could differ materially from
forward-looking statements.
8
<PAGE>
In addition to those factors previously disclosed by the Company and those
factors identified elsewhere herein, the following factors could cause actual
results to differ materially from such forward-looking statements: pricing
pressures on loan and deposit products; actions of competitors; changes in local
and national economic conditions; customer deposit disintermediation; changes in
customers' acceptance of the Company's products and services; the extent and
timing of legislative and regulatory actions and reforms; and Year 2000 related
costs and issues substantially different from those now anticipated.
The Company's forward-looking statements speak only as of the date on which
such statements are made. By making any forward-looking statements, the Company
assumes no duty to update them to reflect new, changing or unanticipated events
or circumstances.
Comparison of Financial Condition at March 31, 1998 and June 30, 1997
Total assets at September 30, 1998 were $199.9 million compared to $200.3
million at June 30, 1998, a decrease of $443,000. This decrease was due
primarily to a $3.4 million decrease in cash and cash equivalents, and a $1.3
million decrease in total securities, partially offset by a $4.3 million
increase in total loans. Management intends to continue its current strategy of
increasing the loan portfolio (primarily through the origination of residential
mortgage loans), as market conditions permit, by introducing new products and
stimulating loan demand through advertising.
Total non-performing assets decreased $86,000, or 5.4%, from $1.6 million
at June 30, 1998 to $1.5 million at September 30, 1998. At September 30, 1998,
the Company held an $868,000 participation interest in certain residential
mortgage loans purchased from Thrift Association Service Corporation (the "TASCO
Loans"). These loans were placed on non-accrual status during the quarter ended
September 30, 1996. As a servicer of these loans, the FDIC is disputing its
obligation to remit certain principal and interest payments on the loans whether
or not such amounts are collected from the borrowers. The FDIC suspended
payments beginning in 1996, but resumed making certain principal and interest
payments in the quarter ended June 30, 1997, and has continued to make current
payments. As a result, interest payments of $12,000 received in the current
quarter were recognized as income on a cash basis. However, the dispute over the
suspended payments has not been resolved, and the TASCO Loans of $868,000 at
September 30, 1998 and $876,000 at June 30, 1998 are included in the Company's
total non-performing loans.
The Bank had two loans, with principal balances totaling $245,000, on
non-accrual status at September 30, 1998 and June 30, 1998. One-to-four family
mortgage loans past due more than 90 days but still accruing interest totaled
$292,000 at September 30, 1998 compared to $370,000 at June 30, 1998. The Bank
had one property classified as real estate owned with a carrying value of
$94,000 at September 30, 1998 and June 30, 1998. The Bank has subsequently sold
the property for $94,000, the same amount as the carrying value. The allowance
for loan losses was $697,000 or 49.6% of non-performing loans at September 30,
9
<PAGE>
1998, compared to $682,000 or 45.7% of non-performing loans at June 30, 1998.
There were no loan charge-offs or recoveries in the three months ended September
30, 1998.
Stockholders' equity decreased $209,000 from $43.2 million at June 30, 1998
to $43.0 million at September 30, 1998. The decrease primarily reflects treasury
stock purchases of $612,000 and dividends paid of $233,000, partially offset by
net income of $456,000 and a $65,000 increase attributable to the net unrealized
gain on securities. Book value per share increased from $14.92 at June 30,1998
to $15.03 at September 30, 1998.
Comparison of Operating Results for the Three Months Ended September 30, 1998
and 1997
Net income decreased $39,000 to $456,000, or $0.18 per share, for the
quarter ended September 30, 1998, compared to net income of $495,000, or $0.18
per share, for the same period last year. Diluted earnings per share amounts
were $0.18 and $0.17 for the quarters ended September 30, 1998 and 1997,
respectively. The decrease is primarily attributable to a $249,000 increase in
interest expense and a $59,000 increase in non-interest expense, partially
offset by a $260,000 increase in interest and dividend income.
Net interest income increased $11,000 in the current quarter compared to
the quarter ended September 30, 1997. Interest and dividend income increased
$260,000 to $3.4 million for the quarter ended September 30, 1998 compared to
the quarter ended September 30, 1997. The increase was caused primarily by a
$17.9 million increase in average interest-earning assets, partially offset by a
10 basis point decrease in the average yield on interest-earning assets.
Interest expense increased $249,000 to $1.7 million for the quarter ended
September 30, 1998 compared to the same quarter last year. This increase was due
primarily to a $21.6 million increase in average interest-bearing liabilities.
The provision for loan losses was $15,000 for the quarters ended September
30, 1998 and 1997. Management continues to evaluate the adequacy of the
allowance for loan losses based on local economic and real estate market
conditions, loan portfolio growth and the level of non-performing loans.
Non-interest expense increased $59,000 for the quarter ended September 30,
1998 compared to the prior year quarter. The increase was caused primarily by a
$20,000 increase in occupancy costs due to the construction of a new building
for the Bank's Mohegan Lake branch, a $9,000 increase in computer service fees
and a $15,000 increase in other operating expenses.
Income tax expense for the quarter ended September 30, 1998 decreased
$3,000 compared to the same period last year, primarily due to a decrease in
pre-tax income. The effective tax rates were 44.6% and 42.8% for the quarters
ended September 30, 1998 and 1997, respectively.
10
<PAGE>
The following table shows the Company's average consolidated balances,
interest income and expense, and average rates (annualized) for the periods
indicated.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------------
September 30, 1998 September 30, 1997
------------------------------------- ------------------------------------
Average Average Average Average
Balance (1) Interest Yield/Rate Balance(1) Interest Yield/Rate
----------- -------- ---------- ---------- -------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (2) ..................................... $ 49,722 $ 990 7.97% $ 45,810 $ 918 8.02%
Mortgage-backed securities(3) ................. 127,202 2,035 6.40 115,978 1,882 6.49
Other debt securities(3) ...................... 16,854 254 6.02 12,218 205 6.71
Other interest-earning assets ................. 4,347 76 7.00 6,218 90 5.79
-------- -------- -------- --------
Total interest-earning assets ............... 198,125 $ 3,355 6.77% 180,224 $ 3,095 6.87%
======== ========
Non interest-earning assets ...................... 2,678 1,895
-------- --------
Total assets ................................ $200,803 $182,119
======== ========
Interest-bearing liabilities:
Regular savings and club accounts ............. $ 50,933 $ 354 2.78% $ 54,382 $ 412 3.03%
Money market and NOW accounts ................. 14,178 94 2.64 11,219 80 2.85
Savings certificates and other ................ 77,370 1,065 5.51 68,733 954 5.55
Securities repurchase agreements .............. 13,000 178 5.49 -- -- --
FHLB advance .................................. 500 4 3.20 -- -- --
-------- -------- -------- --------
Total interest-bearing liabilities .......... 155,981 $ 1,695 4.35% 134,334 $ 1,446 4.31%
======== ========
Non interest-bearing liabilities ................. 1,665 657
-------- --------
Total liabilities ........................... 157,646 134,991
Stockholders' equity ............................. 43,157 47,128
-------- --------
Total liabilities and stockholders' equity .. $200,803 $182,119
======== ========
Net earning assets ............................... $ 42,144 $ 45,890
======== ========
Net interest income .............................. $ 1,660 $ 1,649
======== ========
Net interest rate spread ......................... 2.42% 2.56%
==== ====
Net yield on average interest-earning assets(4) .. 3.35% 3.66%
==== ====
Average interest-earning assets to average
interest-bearing liabilities .................... 1.27x 1.34x
==== ====
</TABLE>
(1) Average balances are calculated using end-of-month balances, producing
results which are not materially different from average daily balances.
(2) Balances are net of deferred loan fees and loans in process. Non-accrual
loans are included in the balances.
(3) Balances represent amortized cost. Yields are not stated on a
tax-equivalent basis, as the Company does not invest in tax-exempt
securities.
(4) Represents net interest income divided by average total interest-earning
assets.
11
<PAGE>
Liquidity and Capital Resources
The Bank's primary sources of funds are depositor accounts from its market
area; proceeds from principal and interest payments on loans, mortgage-backed
securities and other debt securities; and borrowings from the Federal Home Loan
Bank of New York ("FHLB") and other sources. While maturities and scheduled
payments on loans and securities are a predictable source of funds, deposit
flows and loan and securities prepayments are greatly influenced by general
interest rates, economic conditions and competition.
The primary investing activities of the Bank are the origination of
mortgage loans and the purchase of securities, and its primary financing
activity is the attraction of depositor accounts.
The Bank may borrow from the FHLB of New York subject to an overall
limitation of 25% of total assets or $49.8 million at September 30, 1998. Funds
may be borrowed through a combination of FHLB advances and overnight borrowings
under a $15.5 million line of credit. The Bank had $1.0 million of such
borrowings outstanding at September 30, 1998 and none at June 30, 1998.
In January 1998, the Company began to utilize securities repurchase
agreements as a funding source, in order to supplement retail deposit growth.
The Company has borrowed a total of $13.0 million and invested the proceeds in
securities. The Company may engage in other repurchase agreements, from time to
time, as conditions warrant.
The Bank is required to maintain a minimum level of liquid assets as
defined by OTS regulations, based upon a percentage of liquid assets to
depositor accounts and short-term borrowings. For the month of September 1998,
the Bank's average daily total liquidity ratio was 31.2%, compared to the
minimum OTS requirement of 4.0%.
The Bank's most liquid assets are cash and cash equivalents, which consist
of interest-bearing deposits in other financial institutions and short-term
highly liquid investments with original maturities of less than three months
that are readily convertible to known amounts of cash. The level of these assets
is dependent on cash flows from the Bank's operating, financing and investing
activities during any given period. Cash and cash equivalents decreased $3.4
million, from $4.6 million at June 30, 1998 to $1.2 million at September 30,
1998.
The Bank anticipates that it will have sufficient funds available to meet
its current commitments and other funding needs. At September 30, 1998, the Bank
had commitments to originate loans of $4.5 million. Savings certificates which
are scheduled to mature in one year or less at September 30, 1998 totaled $58.6
million. Management believes that a significant portion of such depositor
accounts will remain with the Bank.
At September 30, 1998, the Bank's capital exceeded each of the OTS minimum
capital requirements and the requirements for classification as a
"well-capitalized" institution. The current
12
<PAGE>
minimum regulatory capital ratio requirements are 1.5% for tangible capital,
3.0% for Tier I (core) capital and 8.0% for total risk-based capital. In order
to be considered well-capitalized, an institution must maintain a core capital
ratio of at least 5.0%; a Tier I risk-based capital ratio of at least 6.0%; and
a total risk-based capital ratio of at least 10.0%. At September 30, 1998, the
Bank had both tangible and core capital of $42.4 million (21.3% of total
adjusted assets); Tier I risk-based capital of $42.4 million (83.2% of total
risk-weighted assets); and total risk-based capital of $43.1 million (84.5% of
total risk-weighted assets).
Impact of Year 2000 Issue
Like other financial institutions, the Company relies on computers for the
daily conduct of its business, all its transaction processing and for general
data processing. The "Year 2000 Issue" arose because many existing computer
programs use only the last two digits to refer to a year. Therefore, these
computer programs may not properly recognize a year that begins with "20"
instead of the familiar "19", causing the programs to fail or create erroneous
results.
The Company has initiated formal communications with all its significant
suppliers to determine the extent to which the Company is vulnerable to those
third parties' failure to remediate their own Year 2000 Issue. The Company's
data processing is performed almost entirely by a third party vendor. At this
time, the vendor has asserted that it is Year 2000 compliant and the Company, in
conjunction with other customers of this vendor, has begun testing the updated
system. The Company currently believes that, with modifications to existing
software and conversions to new software, the Year 2000 Issue will be mitigated
without causing a material adverse impact on its operations. However, if such
modifications and conversions are not made, or are not completed timely, the
Year 2000 Issue could have a material adverse impact on the operations of the
Company.
The Company will utilize both internal and external resources to reprogram,
or replace, and test all software for Year 2000 modifications. Related costs are
expensed as incurred, except for costs incurred in the purchase of new software
or hardware, which are capitalized. To date, costs incurred and expensed relate
to the dedication of internal resources employed in the assessment of and
development of the Company's Year 2000 compliance remediation plan, as well as
the testing of the hardware and software owned or licensed for its personal
computers. Costs incurred to date are not material, and management does not
expect that additional costs to be incurred in connection with the Year 2000
Issue will have a material impact on the Company's financial condition or
results of operations. Since substantially all of the Company's loans are
residential mortgages, the ability of the Company's borrowers to become Year
2000 compliant is not a significant concern.
The estimated costs and timetable for the Year 2000 modifications are based
on management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ materially from those plans. Specific factors in respect of both
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the Company and its suppliers that might cause such material differences
include, but are not limited to, the availability and cost of personnel trained
in this field, the ability to locate and correct all relevant computer codes,
testing complications and similar uncertainties. In addition, there can be no
guarantee that the systems of other companies on which the Company's systems
rely will be timely converted, or that a failure to convert by another company,
or a conversion that is incompatible with the Company's systems, would not have
a material adverse effect on the Company.
The Company plans to complete the Year 2000 project not later than March
31, 1999. Given the near-term timing of the test plan, the Company has not
developed a contingency plan, but will do so if testing results are not
satisfactory. Such a contingency plan could entail converting all data
processing applications to a third party vendor who is already Year 2000
compliant.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's interest rate risk
position since June 30, 1998. Other types of market risk, such as foreign
currency exchange rate risk and commodity price risk, do not arise in the normal
course of the Company's business activities.
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, the Company is involved as plaintiff or
defendant in various legal proceedings arising in the normal course of
its business. While the ultimate outcome of these various legal
proceedings cannot be predicted with certainty, it is the opinion of
management that the resolution of these legal actions should not have
a material effect on the Company's financial condition or results of
operations.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
3. Amended and Restated Bylaws
27. Financial Data Schedule
b. Reports on Form 8-K
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PEEKSKILL FINANCIAL CORPORATION
(Registrant)
DATE: November 13, 1998 BY: /s/ Eldorus Maynard
---------------------------
Eldorus Maynard
Chairman of the Board and
Chief Executive Officer
DATE: November 13, 1998 BY: /s/ William J. LaCalamito
---------------------------
William J. LaCalamito
President
(principal financial officer)
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PEEKSKILL FINANCIAL CORPORATION
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix.
Section 2. Special Meetings.
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, special meetings of stockholders of the Corporation
may be called only by the Board of Directors pursuant to a resolution adopted by
a majority of the total number of directors which the Corporation would have if
there were no vacancies on the Board of Directors (hereinafter the "Whole
Board").
Section 3. Notice of Meetings.
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten nor more than 60 days before the
date on which the meeting is to be held, to each stockholder entitled to vote at
such meeting, except as otherwise provided herein or required by law (meaning,
here and hereinafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than 30 days after
the date for which the meeting was originally noticed, or if a new record date
is fixed for the adjourned meeting, written notice of the place, date and time
of the adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of at least one-third of
all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes, unless or except
to the extent that the presence of a larger number may be required by law. Where
a separate vote by a class or classes is required, a majority of the shares
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of such class or classes, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote on that
matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date
or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in the
absence of such a person, the President of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call to order any
meeting of the stockholders and act as chairman of the meeting. In the absence
of the Secretary of the Corporation, the secretary of the meeting shall be such
person as the chairman appoints.
Section 6. Conduct of Business.
(a) The chairman of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of discussion as seem to him or her in order.
(b) At any annual meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting (i) by or at the
direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice must be delivered or mailed to and received
at the principal executive offices of the Corporation not less than 70 days
prior to the anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than 20 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered by the close of
business on the later of (i) the 70th day prior to such annual meeting or (ii)
the 10th day following the earlier of the day on which notice of the date of the
annual meeting is mailed or the day on which a public announcement of the date
of such meeting is first made. A stockholder's notice to the Secretary shall set
forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the Corporation's books,
of the stockholder who proposed such business, (iii) the class and number of
shares of the Corporation's
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capital stock that are beneficially owned by such stockholder and (iv) any
material interest of such stockholder in such business. Notwithstanding anything
in these By-laws to the contrary, no business shall be brought before or
conducted at an annual meeting except in accordance with the provisions of this
Section 6(b). The officer of the Corporation or other person presiding over the
annual meeting shall, if the facts so warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 6(b) and, if he or she should so determine,
he shall so declare to the meeting and any such business so determined to be not
properly brought before the meeting shall not be transacted.
At any special meeting of the stockholders, only such business shall be
conducted as shall have been brought before the meeting by or at the direction
of the Board of Directors.
(c) Only persons who are nominated in accordance with the procedures set
forth in these By-laws shall be eligible for election as directors. Nominations
of persons for election to the Board of Directors of the Corporation may be made
at a meeting of stockholders at which directors are to be elected only (i) by or
at the direction of the Board of Directors or (ii) by any stockholder of the
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 6(c). Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made by timely notice in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered or mailed
to and received at the principal executive offices of the Corporation not less
than 70 days prior to the date of the meeting; provided, however, that in the
event that less than 80 days' notice of the date of the meeting is given to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the earlier of (i)
the day on which such notice of the date of the meeting is mailed or (ii) the
day on which a public announcement of the date of the meeting is first made.
Such stockholder's notice shall set forth (i) as to each person whom such
stockholder proposes to nominate for election or re-election as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (ii) as to
the stockholder giving the notice: (x) the name and address, as they appear on
the Corporation's books, of such stockholder and (y) the class and number of
shares of the Corporation's capital stock that are beneficially owned by such
stockholder. At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the Secretary
of the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the Corporation unless nominated in accordance
with the provisions of this Section 6(c). The officer of the Corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
that a nomination was not made in accordance with such provisions and, if he or
she should so determine, he or she shall so declare to the meeting and the
defective nomination shall be disregarded.
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Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing (or as
otherwise permitted under applicable law) by the stockholder or his duly
authorized attorney-in-fact filed in accordance with the procedure established
for the meeting. Proxies solicited on behalf of the management shall be voted as
directed by the stockholder or in the absence of such direction, as determined
by a majority of the Board of Directors. No proxy shall be valid after eleven
months from the date of its execution except for a proxy coupled with an
interest.
Each stockholder shall have one vote for every share of stock entitled to
vote which is registered in his or her name on the record date for the meeting,
except as otherwise provided herein or in the Certificate of Incorporation of
the Corporation or as required by law.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefore by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballot, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballot shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or as provided in the Certificate of
Incorporation, all other matters shall be determined by a majority of the votes
cast.
Section 8. Stock List.
The officer who has charge of the stock transfer books of the Corporation
shall prepare and make, in the time and manner required by applicable law, a
list of stockholders entitled to vote and shall make such list available for
such purposes, at such places, at such times and to such persons as required by
applicable law. The stock transfer books shall be the only evidence as to the
identity of the stockholders entitled to examine the stock transfer books or to
vote in person or by proxy at any meeting of stockholders.
Section 9. Consent of Stockholders in Lieu of Meeting.
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
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Section 10. Inspectors of Election
The Board of Directors shall, in advance of any meeting of stockholders,
appoint one or more persons as inspectors of election, to act at the meeting or
any adjournment thereof and make a written report thereof, in accordance with
applicable law.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. The number of directors who shall
constitute the Whole Board shall be such number as the Board of Directors shall
from time to time have designated except that in the absence of any such
designation, such number shall be five. The Board of Directors shall annually
elect a Chairman of the Board and a President from among its members and shall
designate, when present, either the Chairman of the Board or the President to
preside at its meetings.
The directors, other than those who may be elected by the holders of any
class or series of preferred stock, shall be divided into three classes, as
nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the conclusion of the first annual meeting of
stockholders, the term of office of the second class to expire at the conclusion
of the annual meeting of stockholders one year thereafter and the term of office
of the third class to expire at the conclusion of the annual meeting of
stockholders two years thereafter, with each director to hold office until his
or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders, commencing with the first annual meeting, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders
after their election, with each director to hold office until his or her
successor shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
Subject to the rights of the holders of any class or series of preferred
stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office, though less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been elected expires, and until
such director's successor shall have been duly elected and qualified. No
decrease in the number of authorized directors constituting the Board shall
shorten the term of any incumbent director.
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Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by one-third (1/3)
of the directors then in office (rounded up to the nearest whole number) or by
the President and shall be held at such place, on such date, and at such time as
they or he or she shall fix. Notice of the place, date, and time of each such
special meeting shall be given to each director by whom it is not waived by
mailing written notice not less than five days before the meeting or by
telegraphing or telexing or by facsimile transmission of the same not less than
24 hours before the meeting. Unless otherwise indicated in the notice thereof,
any and all business may be transacted at a special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the authorized
number of directors then constituting the Board shall constitute a quorum for
all purposes. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
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(i) To declare dividends from time to time in accordance with law;
(ii) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(iii) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(iv) To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any officer upon
any other person for the time being;
(v) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(vi) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may determine;
(vii) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(viii) To adopt from time to time regulations, not inconsistent with
these By-laws, for the management of the Corporation's business and
affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.
Section 10. Qualification.
Any member of the Board of Directors shall, in order to qualify as such, be
domiciled in or have his or her primary place of business located in Northern
Westchester and Southern Putnam Counties of New York.
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ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so designated
may exercise the power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law if the resolution which designated the committee or a supplemental
resolution of the Board of Directors shall so provide. In the absence or
disqualification of any member of any committee and any alternate member in his
or her place, the member or members of the committee present at the meeting and
not disqualified from voting, whether or not he or she or they constitute a
quorum, may by unanimous vote appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified member.
Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one or two members, in
which event one member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present. Action may be taken by any
committee without a meeting if all members thereof consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of
such committee.
Section 3. Nominating Committee.
The Board of Directors may appoint a Nominating Committee of the Board,
consisting of not less than three members, one of which shall be the President
if, and only so long as, the President remains in office as a member of the
Board of Directors. The Nominating Committee shall have authority (i) to review
any nominations for election to the Board of Directors made by a stockholder of
the Corporation pursuant to Section 6(c)(ii) of Article I of these By-laws in
order to determine compliance with such By-law and (ii) to recommend to the
Whole Board nominees for election to the Board of Directors to replace those
directors whose terms expire at the annual meeting of stockholders next ensuing.
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ARTICLE IV
OFFICERS
Section 1. Generally.
(a) The Board of Directors as soon as may be practicable after the annual
meeting of stockholders shall choose a President, a Secretary and a Treasurer
and from time to time may choose such other officers as it may deem proper. The
President shall be chosen from among the directors. Any number of offices may be
held by the same person.
(b) The term of office of all officers shall be until the next annual
election of officers and until their respective successors are chosen, but any
officer may be removed from office at any time by the affirmative vote of a
majority of the authorized number of directors then constituting the Board of
Directors.
(c) All officers chosen by the Board of Directors shall each have such
powers and duties as generally pertain to their respective offices, subject to
the specific provisions of this Article IV. Such officers shall also have such
powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
Section 2. President.
The President, subject to the control of the Board of Directors, shall have
general power over the management and oversight of the administration and
operation of the Corporation's business and general supervisory power and
authority over its policies and affairs. The President shall see that all orders
and resolutions of the Board of Directors and of any committee thereof are
carried into effect.
Each meeting of the stockholders and of the Board of Directors shall be
presided over by such officer as has been designated by the Board of Directors
or, in his or her absence, by such officer or other person as is chosen at the
meeting. The Secretary or, in his or her absence, the General Counsel of the
Corporation or such officer as has been designated by the Board of Directors or,
in his or her absence, such officer or other person as is chosen by the person
presiding, shall act as secretary of each such meeting.
Section 3. Vice President.
The Vice President or Vice Presidents, if any, shall perform the duties of
the President in the President's absence or during his or her disability to act.
In addition, the Vice Presidents shall perform the duties and exercise the
powers usually incident to their respective offices and/or such other duties and
powers as may be properly assigned to them from time to time by the Board of
Directors, the Chairman of the Board or the President.
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Section 4. Secretary.
The Secretary or an Assistant Secretary shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall perform such other duties and exercise such other powers as are usually
incident to such offices and/or such other duties and powers as are properly
assigned thereto by the Board of Directors, the Chairman of the Board or the
President.
Section 5. Treasurer.
The Treasurer shall have charge of all monies and securities of the
Corporation, other than monies and securities of any division of the Corporation
which has a treasurer or financial officer appointed by the Board of Directors,
and shall keep regular books of account. The funds of the Corporation shall be
deposited in the name of the Corporation by the Treasurer with such banks or
trust companies or other entities as the Board of Directors from time to time
shall designate. The Treasurer shall sign or countersign such instruments as
require his or her signature, shall perform all such duties and have all such
powers as are usually incident to such office and/or such other duties and
powers as are properly assigned to him or her by the Board of Directors, the
Chairman of the Board or the President, and may be required to give bond,
payable by the Corporation, for the faithful performance of his duties in such
sum and with such surety as may be required by the Board of Directors.
Section 6. Assistant Secretaries and Other Officers.
The Board of Directors may appoint one or more assistant secretaries and
one or more assistants to the Treasurer, or one appointee to both such
positions, which officers shall have such powers and shall perform such duties
as are provided in these By-laws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.
Section 7. Action with Respect to Securities of Other Corporations
Unless otherwise directed by the Board of Directors, the President, or any
officer of the Corporation authorized by the President, shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other Corporation.
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ARTICLE V
STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the President or a Vice President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these
By-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefore.
Section 3. Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
60 nor less than ten days before the date of any meeting of stockholders, nor
more than 60 days prior to the time for such other action as hereinbefore
described; provided, however, that if no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given or, if notice is waived, at
the close of business on the day next preceding the day on which the meeting is
held, and, for determining stockholders entitled to receive payment of any
dividend or other distribution or allotment of rights or to exercise any rights
of change, conversion or exchange of stock or for any other purpose, the record
date shall be at the close of business on the day on which the Board of
Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
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Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI
NOTICES
Section 1. Notices.
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in the mail,
postage paid, by sending such notice by prepaid telegram or mailgram or by
sending such notice by facsimile machine or other electronic transmission. Any
such notice shall be addressed to such stockholder, director, officer, employee
or agent at his or her last known address as the same appears on the books of
the Corporation. The time when such notice is received, if hand delivered or
dispatched, if delivered through the mail, by telegram or mailgram or by
facsimile machine or other electronic transmission, shall be the time of the
giving of the notice.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
12
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and when
so directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
In applying any provision of these By-laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded
and the day of the event shall be included.
13
<PAGE>
ARTICLE VIII
AMENDMENTS
The By-laws of the Corporation may be adopted, amended or repealed as
provided in Article SEVENTH of the Certificate of Incorporation of the
Corporation.
14
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY
REPORT FILED ON FORM 10-Q FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-END> SEP-30-1998
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<COMMON> 41
0
0
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