FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission file number 010042
One Valley Bancorp, Inc.
(Exact name of registrant as specified in its charter)
West Virginia 55-0609408
State or other jurisdiction (I.R.S Employer
Of incorporation or organization Identification No.)
One Valley Square, Charleston, West Virginia 25326
(Address of principal executive offices)
(Zip Code)
(304) 348-7000
(Registrant's telephone number, including area code)
Not applicable _
(Former name, address, and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities and
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant as required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X No
The number of shares outstanding of each of the issuer's classes of common
stock as of June 30, 1998 was:
Common Stock, $10.00 par value -32,815,308 shares
One Valley Bancorp, Inc.
Part I. Financial Information
Item 1. Financial Statements.
The unaudited interim consolidated financial statements of One Valley Bancorp,
Inc. (One Valley) or (Registrant) are included on pages 3 - 8 of this report.
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for annual year-end financial statements. In
the opinion of management, all adjustments considered necessary for a fair
presentation have been included and are of a normal recurring nature. Operating
results for the six-month period ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the year ending December
31, 1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997.
The Private Securities Litigation Act of 1995 indicates that the disclosure of
forward-looking information is desirable for investors and encourages such
disclosure by providing a safe harbor for forward-looking statements by
corporate management. This Quarterly Report on Form 10-Q contains forward-
looking statements that involve risk and uncertainty. In order to comply with
the terms of the safe harbor, the corporation notes that a variety of factors
could cause One Valley's actual results and experience to differ materially
from the anticipated results or other expectations expressed in those forward-
looking statements.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Management's discussion and analysis of financial condition and results of
operations is included on pages 9 - 17 of this report.
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited in thousands)
<CAPTION>
June 30 December 31 June 30
1998 1997 1997
<S> <C> <C> <C>
ASSETS
Cash and Due From Banks $155,574 $127,012 $153,515
Interest Bearing Deposits With Other Banks 1,990 2,162 10,964
Federal Funds Sold 47,042 20,310 23,875
---------- ---------- ----------
Cash and Cash Equivalents 204,606 149,484 188,354
Securities
Available-for-Sale, at fair value 1,386,666 1,216,749 1,179,412
Held-to-Maturity (Estimated Fair Value,
June 30, 1998 - $247,966; December 31, 1997 - $355,820;
June 30, 1997 - $320,454) 241,600 352,272 321,242
Loans
Total Loans 3,674,682 3,302,536 3,180,089
Less: Allowance For Loan Losses 48,907 45,048 44,377
---------- ---------- ----------
Net Loans 3,625,775 3,257,488 3,135,712
Premises & Equipment - Net 97,645 90,397 90,518
Other Assets 131,773 95,096 90,241
---------- ---------- ----------
Total Assets $5,688,065 $5,161,486 $5,005,479
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest Bearing $541,430 $465,227 $452,152
Interest Bearing 3,706,848 3,468,947 3,433,564
---------- ---------- ----------
Total Deposits 4,248,278 3,934,174 3,885,716
Short-term Borrowings
Federal Funds Purchased 29,671 22,581 40,375
Repurchase Agreements and Other Borrowings 757,031 600,899 494,298
---------- ---------- ----------
Total Short-term Borrowings 786,702 623,480 534,673
Long-term Borrowings 41,862 48,875 57,880
Other Liabilities 59,201 51,307 44,942
---------- ---------- ----------
Total Liabilities 5,136,043 4,657,836 4,523,211
Shareholders' Equity:
Preferred Stock-$10 par value; 1,000,000 shares authorized
but none issued 0 0 0
Common Stock-$10 par value; 70,000,000 shares authorized,
Issued 37,162,154 shares at June 30, 1998;
36,330,605 shares at December 31, 1997;
29,904,783 shares at June 30, 1997 371,622 363,306 299,048
Capital Surplus 91,569 71,782 71,663
Retained Earnings 178,331 157,730 199,183
Accumulated Other Comprehensive Income 5,595 5,927 1,715
Treasury Stock - 4,346,846 shares at June 30, 1998
and December 31, 1997; 3,357,397 shares
at June 30, 1997; at cost (95,095) (95,095) (89,341)
---------- ---------- ----------
Total Shareholders' Equity 552,022 503,650 482,268
---------- ---------- ----------
Total Liabilities and Shareholders' Equity $5,688,065 $5,161,486 $5,005,479
========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited in thousands, except per share data)
<CAPTION>
For The Three Months For The Six Months
Ended June 30 Ended June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans
Taxable $77,370 $68,705 $150,499 $135,770
Tax-Exempt $675 $747 1,355 1,488
-------- -------- -------- --------
Total $78,045 69,452 151,854 137,258
Interest on Investment Securities
Taxable 22,767 20,638 45,729 41,034
Tax-Exempt 2,997 3,015 6,121 5,998
-------- -------- -------- --------
Total 25,764 23,653 51,850 47,032
Other Interest Income 481 375 672 847
-------- -------- -------- --------
Total Interest Income 104,290 93,480 204,376 185,137
INTEREST EXPENSE
Deposits 39,522 36,779 77,960 72,443
Short-term Borrowings 9,150 5,716 18,120 11,470
Long-term Borrowings 700 904 1,405 1,663
-------- -------- -------- --------
Total Interest Expense 49,372 43,399 97,485 85,576
-------- -------- --------- --------
Net Interest Income 54,918 50,081 106,891 99,561
Provision For Loan Losses 2,294 1,834 4,888 3,292
-------- -------- -------- --------
Net Interest Income
After Provision For Loan Losses 52624 48247 102,003 96,269
OTHER INCOME
Trust Department Income 3,070 2,681 5,960 5,176
Service Charges on Deposit Accounts 4,868 3,839 9,036 7,525
Real Estate Loan Processing & Servicing Fees 2,109 1,429 4,011 2,773
Other Service Charges and Fees 3,331 2,678 6,440 5,246
Other Operating Income 1,039 976 2,777 2,108
Securities Transactions 186 192 723 147
-------- -------- -------- --------
Total Other Income 14,603 11,795 28,947 22,975
OTHER EXPENSES
Salaries and Employee Benefits 19,423 18,031 38,754 36,326
Occupancy Expense - Net 2,065 1,755 3,944 3,550
Equipment Expenses 2,858 2,291 5,539 4,503
Outside Data Processing 2,893 2,124 5,194 4,109
Other Operating Expenses 12,922 10,489 24,997 20,544
-------- -------- -------- --------
Total Other Expenses 40,161 34,690 78,428 69,032
-------- -------- -------- --------
Income Before Taxes 27,066 25,352 52,522 50,212
Applicable Income Taxes 9,047 8,672 17,992 17,167
-------- -------- -------- --------
NET INCOME $18,019 $16,680 $34,530 $33,045
======== ======== ======== ========
NET INCOME PER SHARE
Basic $0.55 $0.52 $1.07 $1.03
Diluted 0.54 0.51 $1.05 $1.01
Average Shares Outstanding (in thousands)
Basic $32,754 $31,921 32,298 32,061
Diluted $33,434 $32,609 32,997 32,751
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(unaudited in thousands)
<CAPTION>
Accumulated
Other
Common Capital Retained Treasury Comprehensive
Stock Surplus Earnings Stock Income Total
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1997 $363,306 $71,782 $157,730 ($95,095) $5,927 $503,650
Six Months Ended June 30, 1998
Comprehensive Income:
Net Income 0 0 34,530 0 0 34,530
Other Comprehensive Income, net of tax:
Net Unrealized Holding Gains on
Available-For-Sale Securities Arising
During The Period 0 0 0 0 102 102
Less: Reclassification Adjustment For
Gains Realized in Net Income 0 0 0 0 (434) (434)
--------
Other Comprehensive Income (332)
--------
Comprehensive Income 34,198
Cash Dividends ($.42 per share) (13,929) (13,929)
FFVA Treasury Shares Reissued 7,087 19,274 0 0 0 26,361
Stock Options Exercised 1,229 513 0 0 0 1,742
-------- -------- -------- -------- -------- --------
Balance June 30, 1998 $371,622 $91,569 $178,331 ($95,095) $5,595 $552,022
======== ======== ======== ======== ======== ========
Balance December 31, 1996 $298,504 $66,641 $183,226 ($67,378) $2,065 $483,058
Six Months Ended June 30, 1997
Comprehensive Income:
Net Income 0 0 33,045 0 0 33,045
Other Comprehensive Income, net of tax:
Net Unrealized Holding Losses on
Available-For-Sale Securities Arising
During The Period 0 0 0 0 (262) (262)
Less: Reclassification Adjustment For
Gains Realized in Net Income 0 0 0 0 (88) (88)
--------
Other Comprehensive Income (350)
--------
Comprehensive Income 32,695
Cash Dividends ($.38 per share) 0 0 (11,485) 0 0 (11,485)
FFVA Repurchase of Common Stock (1,806) 3,650 (5,603) 0 0 (3,759)
Treasury Shares Purchased 0 0 0 (21,963) 0 (21,963)
Stock Options Exercised 2,350 1,372 0 0 0 3,722
-------- -------- -------- -------- -------- --------
Balance June 30, 1997 $299,048 $71,663 $199,183 ($89,341) $1,715 $482,268
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited in thousands)
<CAPTION>
For The Six Months
Ended June 30
1998 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $34,530 $33,045
Adjustments To Reconcile Net Income To Net Cash
Provided by Operating Activities:
Provision For Loan Losses 4,888 3,292
Depreciation 4,939 4,188
Amortization and Accretion 2,728 1,895
Net Gain From Sales of Assets (723) (93)
Increase (Decrease) Due to Changes In:
Accrued Interest Receivable (3,394) (1,337)
Accrued Interest Payable (1,525) 621
Other Assets and Other Liabilities 14,465 (3,963)
-------- --------
Net Cash Provided by Operating Activities 55,908 37,648
INVESTING ACTIVITIES
Proceeds From Sales of Securities Available for Sale 32,482 32,974
Proceeds From Maturities of Securities Available for Sale 235,512 156,728
Proceeds From Maturities of Securities Held to Maturity 22,308 8,090
Purchases of Securities Available for Sale (330,719) (310,866)
Purchases of Securities Held to Maturity (19,620) (25,915)
Net Increase In Loans (248,369) (46,825)
Acquisition of Branches, Net of Cash Received 111,920 0
Purchases of Premises and Equipment (5,571) (4,327)
-------- --------
Net Cash Used in Investing Activities (202,057) (190,141)
FINANCING ACTIVITIES
Net Increase in Interest Bearing and Non-interest Bearing Deposits 30,888 81,237
Net Increase in Federal Funds Purchased 7,090 23,097
Net Increase in Other Short-term Borrowings 156,132 79,502
Proceeds From Long-term Borrowings 0 25,000
Repayment of Long-term Debt (7,013) (2,012)
Proceeds From Issuance of Common Stock 28,103 3,722
Repurchase of FFVA Common Stock 0 (3,759)
Purchase of Treasury Stock 0 (21,963)
Dividends Paid (13,929) (11,485)
-------- --------
Net Cash Provided by Financing Activities 201,271 173,339
-------- --------
Increase in Cash and Cash Equivalents 55,122 20,846
Cash And Cash Equivalents at Beginning of Year 149,484 167,508
-------- --------
Cash And Cash Equivalents, June 30 $204,606 $188,354
======== ========
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accounting and reporting policies of One Valley conform to generally
accepted accounting principles and practices in the banking industry. The
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The interim financial information included in this report is
unaudited. In the opinion of management, all adjustments necessary for a
fair presentation of the results of the interim periods have been made.
These notes are presented in conjunction with the Notes to Consolidated
Financial Statements included in the Annual Report of One Valley.
Note B - Accounting Change
In February 1997, the FASB issued Statement No. 128, "Earnings Per Share" (FAS
128) which supercedes APB Opinion No. 15, "Earnings Per Share" (APB 15).
Statement No. 128 is effective for financial statements for both interim and
annual periods ending after December 15, 1997. Statement 128 requires the
reporting of basic and diluted net income per common share. Basic net income
per common share excludes any dilutive effects of stock ptions and is computed
by dividing net income by the average common shares outstanding during the
year. Diluted net income per common share is computed by dividing net income
by the average common shares outstanding during the year adjusted for the
dilutive effect of options under One Valley's stock option plans. The effect
of dilutive stock options on average shares outstanding was 680,000 and 688,000
for the second quarter of 1998 and 1997 respectively, while the effect was
699,000 and 690,000 for the six months ended June 30, 1998 and 1997,
respectively. Net income per common share amounts for all periods presented
have been restated to conform to Statement 128.
As of January 1, 1998, the One Valley adopted Financial Accounting Standards
Board (FASB) Statement 130, "Reporting Comprehensive Income" (FAS 130). FAS
130 establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement had no impact on
One Valley's net income or shareholders' equity. FAS 130 requires unrealized
gains or losses on the One Valley's available-for-sale securities, which prior
to adoption were reported separately in shareholders' equity, to be included
in other comprehensive income. Prior period financial statements have been
reclassified to conform to the requirements of FAS 130. During the second
quarter of 1998 and 1997, total comprehensive income amounted to $17,418 and
$21,333, respectively.
As of January 1, 1998, One Valley adopted the provision of FASB Statement 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities," relating to repurchase agreements, securities lending, and
other similar transactions and pledged collateral, which had been delayed by
FASB statement 127 "Deferral of the Effective Date of Certain Provisions of
FASB Statement 125, an Amendment of FASB Statement 125." The effect of
adopting the additional provisions of Statement 125, as amended by Statement
127, had no material impact on One Valley's financial position or results of
operations.
Note C - Merger
At the close of business on March 30, 1998, One Valley acquired all of the
outstanding stock of FFVA Financial Corporation, in exchange for 5,518,668
shares of One Valley common stock. This combination was accounted for as a
pooling-of-interests. Accordingly, all prior period financial information has
been restated to reflect the merger of the two companies as though they
had always been combined.
At the close of business on August 7, 1998, One Valley acquired all of the
outstanding stock of Summit Bankshares, Inc., headquartered in Raphine,
Virginia. One Valley will exchange 1.36 shares of One Valley's common stock
for each share of Summit Bankshares' common stock outstanding. It is
anticipated that this combination will be accounted for as a pooling-of-
interests
One Valley Bancorp, Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
June 30, 1998
INTRODUCTION AND SUMMARY
Net income for the second quarter of 1998 totaled $18.0 million, an
8.0% increase from the $16.7 million earned in the same quarter of 1997. On a
per share basis, basic net income per share increased by 5.8% to $0.55 from
the $0.52 earned in the second quarter of 1997. The improvement in earnings
during the quarter is primarily due to higher net interest income and non-
interest income which more than offset the increase in non-interest expense.
Prior period per share information has been adjusted for a 5 for 4 stock split
declared in August 1997.
Net income for the first six months of 1998 totaled $34.5 million, a
4.5% increase over the first six months of 1997. Basic net income per share
for the six-month period was $1.07, a 3.9% increase from the $1.03 reported
for the first six months of 1997. First quarter 1998 earnings were lowered by
approximately $0.03 per share due to the impact of one-time charges connected
with the acquisition of FFVA Financial Corporation in Lynchburg, Virginia.
Return on average assets (ROA) measures how effectively One Valley
utilizes its assets to produce net income. ROA was 1.26% for the first six
months of 1998, a decrease from the 1.35% earned during the same period of
1997. Return on average equity (ROE) also decreased to 12.98% from the 13.65%
reported for the second quarter of 1997. The decline in ROA and ROE was
primarily the result of merger related expenses incurred during the first
quarter of 1998 as more fully explained below.
The following discussion is an analysis of the financial condition and
results of operations of One Valley for the first six months of 1998. This
discussion should be read in conjunction with the 1997 Annual Report to
Shareholders and the other financial information included in this
report.
Acquisitions
At the close of business on February 19, 1998, One Valley acquired
fifteen branches in central Virginia. Through this purchase One Valley
acquired $124.9 million in loans and $283.2 million in deposits. This
transaction was treated as a purchase and accordingly, the balances and
results of the operations of the branches are included in the financial
statements of One Valley only from the date of purchase. Also, at the
close of business on March 30, 1998, One Valley Bancorp merged with FFVA
Financial Corporation a $580.0 million bank headquartered in Lynchburg,
Virginia. Pursuant to the merger agreement, One Valley exchanged 1.05
shares of One Valley Bancorp stock for each share of FFVA Financial common
stock outstanding. The combination was accounted for as a pooling-of-interests
and as a result, all prior financial results have been restated and reported
on a combined basis.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income for the six months ended June 30, 1998, was $110.9
million on a fully tax-equivalent basis, a 7.1% increase over the $103.6
million earned during the same period in 1997. This increase is largely due
to a $357.0 million or 11.4% increase in average total loans and a $202.2
million or 14.0% increase in average securities during the first six-month
comparison. In total, average earning assets increased by $546.4 million or
12.0% in the first six months of 1998 over the same period in 1997, while
average interest bearing liabilities increased by $468.5 million or 11.8% in
the same period. Both total interest income and total interest expense
increased from the prior year due to the increases in volume and changes in
the mix of assets and liabilities. Approximately one-third of the growth in
average earning assets was attributable to the purchase of the fifteen
branches from the Wachovia Corporation.
As shown in the consolidated average balance sheets (page 17), the
yield on earning assets declined to 8.18% for the first six months of 1998
from 8.33% earned during the same period in 1997. During the same period, the
cost of interest bearing liabilities increased eight basis points to 4.45%
from last year's 4.37% level. The increase in cost of funds has resulted from
a combination of changes in the mix of interest-bearing liabilities including
a higher level of short-term borrowed funds, as well as a higher cost to
attract customer deposits in an increasingly competitive market. Additional
discussion of the changes in balance sheet mix is included later in this
report. With the lower yield earned on earning assets and the higher cost of
interest bearing liabilities, the net interest margin decreased to 4.34%
during the first six months of 1998, from the 4.55% during the first six
months of 1997. Internal interest rate risk simulations indicate that over
the next twelve months a sharp rise in interest rates would have a slight
negative influence on net interest income; whereas, a sharp decline in rates
would have a slight positive influence on net interest income. Normal
fluctuations in market interest rates should not have a significant impact on
One Valley's net interest margin.
Credit Experience
The provision for loan losses was $4.9 million for the six months ended
June 30, 1998, a $1.6 million increase from the provision made during the same
period of 1997. As a percentage of average total loans, the provision for loan
losses through the first six months of 1998 was 0.28% on an annualized basis,
compared with 0.21% for the same period of 1997. The increase in the
provision for loan losses was based upon One Valley's continual evaluation
process of the adequacy of the allowance for loan losses and to provide for
the increase in the portfolio as a result of the loans acquired through the
fifteen-branches purchased in February 1998. Net charge-offs as a percentage
of average total loans in the first six months of 1998 decreased to 0.17% on
an annualized basis, down from an annualized 0.25% during the same period in
1997, and from the 0.24% charge-off ratio for the full year of 1997. The
decrease is primarily due to a lower volume of consumer installment charge-
offs.
Total non-performing assets at June 30, 1998, were 0.28% of period-end
loans, down from the 0.30% at December 31, 1997 and 0.36% at June 30, 1997.
on-accrual loans totaled $8.4 million at June 30, 1997, $1.5 million or 14.8%
below last year's level resulting in a decline in total non-performing assets
from the level one year ago. The allowance for loan losses is sufficient to
absorb nearly five times the amount of those non-performing assets. At June
30, 1998, loans past due over 90 days were 0.16% of outstanding loans, down
from the 0.19% at year-end 1997 and down slightly from the 0.17% at June 30,
An analysis of the allowance for loan losses and non-performing assets
is included on page 16.
As a result of the growth in the loan portfolio combined with its
continued good credit quality, the allowance for loan losses has declined
slightly in relationship to total outstanding loans since year-end. At June
30, 1998, the allowance was 1.33% of outstanding loans, compared with the
1.36% at year-end and 1.40% at one-year ago. In management's opinion, the
allowance for loan losses is adequate to absorb the current estimated risk of
loss in the existing loan portfolio.
Non-Interest Income and Expense
The net overhead ratio (non-interest expense less non-interest income
excluding security transactions divided by average earning assets) is a
measure of One Valley's ability to control costs and equalizes the comparison
of various sized operations. As this ratio decreases, more of the net
interest margin flows to net income. One Valley's net overhead ratio for the
first six months of 1998 was 1.96%, down from 2.08% during all of 1997 and the
2.02% for the first six months of 1997. This improvement in the net overhead
ratio during the last six months of 1998 is a result of growth in average
earning assets with a moderate increase in net overhead over the same period
in 1997. Average earning assets increased 12.0% in the first six months of
1998 when compared with the same period in 1997, whereas, net overhead
increased by 8.7% during the same period. The increase in net overhead is
primarily due to the operations of the fifteen branches purchased and expenses
related to the FFVA merger.
Total non-interest income excluding securities transactions was $28.2
million through the first six months of 1998, up 23.6% from the $22.8 million
non-interest income earned during the same period in 1997. Trust income
increased by 15.2% from the same period last year due to new business and
increases in the market value of trust assets managed. Service charges on
deposit accounts increased by 20.1% in the first six-month comparison mainly
due to a higher level of customer activity. Real estate loan processing and
service fees increased by 44.6% when compared to the first six months of 1997
due to a higher level of residential mortgage loans sold in the secondary
market, as customer refinancing activity increased substantially in 1998 due
to the interest rate environment. Other service charges and fees increased by
22.8% over the first six months of 1997, primarily due to increases in
credit/debit card activity and other banking services provided to customers.
Other operating income increased by 31.7% primarily due to additional income
received from certain loan payoffs and the income received during the first
quarter from the final payment on the sale of One Valley's Corporate Trust
business.
Total non-interest expense was $78.4 million during the six months
ended June 30, 1998, a 13.6% increase from the $69.0 million during the same
period in 1997, largely due to the operations of the fifteen branches acquired
during the first quarter and the one time expenses related to the acquisition
of FFVA. Staff costs increased by 6.7% from the level one-year ago primarily
due to the additional staff from the new branches and normal salary and
benefit increases. Occupancy expense increased by 11.1% from the same period
last year primarily due to the increased facilities cost related to the
fifteen new branches. Equipment expenses increased 23.0% from last year's
level primarily due to higher maintenance and depreciation costs related to
technology upgrades that occurred in 1997 and are continuing in 1998. Outside
data processing expense increased by 26.4% from the same period in 1997. This
increase is due to conversion and processing costs associated with the
expansion of operations in Virginia and the processing costs related to the
increased activity in the Visa Checkcard and ATM product. Other operating
expenses increased by $4.5 million or 21.7% in the first six months of 1998.
One fourth ($1.1 million) of the increase was directly related to one-time
charges for investment banking and legal fees related to the FFVA merger. The
remainder was primarily due to increases in advertising expense and other
expenses associated with the operations of the fifteen new branches.
Income tax expense increased by $0.8 million, or 4.8%, for the first
six months of 1998 compared with the same period in 1997. The increase in
taxes is primarily a result of the 2.4% growth in pretax earnings and
expenses related to the FFVA merger. One Valley's effective income tax rate
for the first six months of 1998 was 34.3% compared to 34.2% during the
first six months of 1997.
FINANCIAL CONDITION
Asset Structure
Total loans at June 30, 1998, exceeded June 30, 1997, levels by
15.6% or $494.6 million. Since year-end 1997, total loans have increased
by 11.3% or $372.1 million. The consolidated loan-to-deposit ratio has
increased to 86.50% at June 30, 1998, compared to 81.84% at June 30,
1997. Approximately $124.9 million in loans were acquired through the
fifteen branches purchased during the first quarter of 1998. The
increase in total loans is primarily in commercial revolving lines
of credit, commercial real estate loans, and one-to-four family
mortgage loans.
Investment portfolio assets increased $59.2 million or 3.8%
from the level at year-end and by $127.6 million or 8.5% from the
level one-year ago. One Valley acquired approximately $108.2 million
of investable funds through the Wachovia branch purchase. These funds
were primarily invested in government agency and mortgage backed
securities. These investment decisions were made in accordance with
One Valley's asset/liability strategy, which strives to minimize
interest rate risk while enhancing the financial position of the
Company.
Securities designated as available-for-sale at June 30, 1998,
had a historical cost of $1.4 billion, with an unrealized gain of
approximately $9.3 million. This unrealized gain increased
shareholders' equity by $5.6 million, net of $3.7 million in
deferred income taxes. At year-end December 31, 1997, and June
30, 1997, securities available-for-sale had a historical cost of
$1.21 billion and $1.17 billion, with an unrealized gain of
approximately $9.7 million at year-end, and an unrealized gain of
approximately $2.7 million at June 30, 1997. The unrealized
gains increased shareholders' equity by $5.9 million and $1.7 million,
net of $3.8 and $1.0 million in deferred income taxes, respectively.
On March 30, 1998, in accordance with the provisions in FAS
Statement 115, One Valley reclassified as available-for-sale
approximately $96.2 million of investments that were previously
categorized as held-to-maturity by FFVA. The reclassification enabled One
Valley to incorporate FFVA's investment portfolio into its own investment
policy and assest/liability management strategies. At the date of transfer,
these securities had a carrying value of $95.3 million with an unrealized gain
of approximately $0.9 million.
At the time of purchase, management determines the appropriate
classification of securities. Securities to be held for indefinite periods
of time and not intended to be held to maturity or on a long-term basis are
classified as available-for-sale and carried at fair value. The corresponding
difference between the historical cost and the current fair value of these
securities, the unrealized gain or loss, is an adjustment to shareholders'
equity, net of deferred income taxes. Securities available-for-sale include
securities that management intends to use as part of its asset/liability
management strategy and that may be sold in response to changes in interest
rates, resultant prepayment risk, and other related risk factors. If
management has the positive intent and One Valley has the ability at the time
of purchase to hold securities until maturity, they are classified
as held-for-investment and carried at amortized historical cost adjusted for
amortization of premiums and accretion of discounts, which are recognized as
adjustments to interest income.
In order to improve its fully tax equivalent net interest income and
to hedge against higher income tax rates, One Valley increased its holdings
of tax-exempt securities that were offering attractive yields over the last
several years. As shown on the consolidated average balance sheets (page 17),
average tax-exempt securities in the first six months of 1998 increased by
3.9% or $8.7 million over the average during the first six months of 1997.
One Valley will continue to monitor its investment opportunities and may
purchase additional tax-exempt securities of similar yield and quality.
Federal funds sold at June 30, 1998, were $47.0 million, up $26.7
million from year-end and up $23.2 million from one year ago. Fluctuations in
federal funds sold are normal and largely due to planned changes in the
Company's asset/liability structure in order to maximize the return on
investment in response to changes in the interest rate environment.
Liability Structure
Total deposits at June 30, 1998, increased by $314.1 million or 8.0%
from the level at year-end and $362.6 million or 9.3% since June 30, 1997.
Approximately $283.2 million of the increase in total deposits was
attributable to the fifteen new branches purchased during the first quarter of
1998. Over the past few years' growth in banking deposits has been modest.
Due to the current low interest rate environment compared to the early 1990's,
deposit customers are shortening the maturities of their deposit reinvestments
and seeking higher yielding non-traditional investment alternatives. The
majority of the growth in One Valley's core deposits, exclusive of the new
branches, has been in money market and valley index accounts. The average rate
paid on interest bearing deposits was 4.29% in the first six months of 1998,
down from the 4.31% average rate paid for all of 1997, and slightly up from
the 4.28% average rate paid in the first six months of 1997. In an effort to
meet customer expectations for an integrated financial service delivery
system, One Valley operates a fully licensed NASD Broker/Dealer subsidiary and
continues to expand other product lines.
Total short-term borrowings increased by $163.2 million or 26.2% from
the year-end level, and increased $252.0 million or 47.1% from the level at
June 30, 1997. Short-term borrowings consist of Federal funds purchased from
correspondent banks, repurchase agreements with large corporate and public
entities, advances on credit lines available to One Valley, and commercial
paper. The increased level of short-term borrowings has been used to fund the
loan growth and the higher level of investment portfolio assets as planned
under One Valley's asset/liability management program.
Long-term borrowings decreased $16.0 million or 27.7% since June 30,
1997, primarily as a result of payments on long-term advances from the Federal
Home Loan Bank (FHLB). As a result, One Valley now has $41.9 million of long-
term borrowings, primarily FHLB borrowings, with repayment schedules from one
to six years. In 1998 maturities of these borrowings include $5.0 million in
the third quarter, and $2.0 million in the fourth quarter while approximately
$2.0 million will mature in 1999.
Capital Structure and Liquidity
One Valley's equity-to-asset ratio was 9.7% at June 30, 1998, down from
the 9.8% at December 31, 1997 and up slightly from the 9.6% at June 30, 1997.
One Valley's commitment to a strong capital ratio has facilitated the
company's expansion into the central Virginia markets thus increasing long-
term profitability and shareholder value. One Valley's cash dividend,
totaling $0.21 per share for the second quarter of 1998, was up 10.5% over the
$0.19 per share dividend during the same period in 1997. One Valley's
dividend policy coupled with the continued growth in net income demonstrates
management's commitment to a strong equity-to-asset ratio benefiting both the
investor and the customer in the local community. One Valley's
risk based capital ratio at June 30, 1998 was 15.15%, well above the 8.0%
required, while its Tier I capital ratio was 13.90%. One Valley's strong
capital position is demonstrated further by its leverage ratio of 8.67%
compared to regulatory guidance of 4.0% to 5.0%. The capital ratios of
the banking subsidiaries also remain strong and allow them to effectively
serve the communities in which they are located.
In order to account for the FFVA merger under the pooling-of-interests
method of accounting, FFVA Corporation reissued 675,000 treasury shares in a
private placement offering. As a result, approximately $26.4 million of
additional equity was raised in the first quarter of 1998.
The capital positions of the banks, coupled with proper asset/liability
matching and the stable nature of the primarily consumer base of core
deposits, results in the maintenance of a strong liquidity position. The
liquidity of the parent company is dependent upon dividends from its banking
subsidiaries, which, although restricted by banking regulations, are adequate
to meet its cash needs.
Effects of Changing Prices
The results of operations and financial condition presented in this
report are based on historical cost, unadjusted for the effects of inflation.
Inflation affects One Valley in two ways. One is that inflation can result in
increased operating costs, which must be absorbed or recovered through
increased prices for services. The second effect is on the purchasing power
of the corporation. Virtually all of a bank's assets and liabilities are
monetary in nature. Regardless of changes in prices, most assets and
liabilities of the banking subsidiaries will be converted into a fixed number
of dollars. Non-earning assets, such as premises and equipment, do not
comprise a major portion of One Valley's assets; therefore, most assets are
subject to repricing on a more frequent basis than in other industries. One
Valley's ability to offset the effects of inflation and potential reductions in
future purchasing power depends primarily on its ability to maintain
capital levels by adjusting prices for its services and to improve net
interest income by maintaining an effective asset/liability mix.
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Analysis of Loan Losses and Non-Performing Assets
(unaudited in thousands)
<CAPTION>
For The Three Months For The Six Months
Ended June 30 Ended June 30
1998 1997 1998 1997
<S> <C> <C> <C> <C>
ALLOWANCE FOR LOAN LOSSES
Balance, Beginning of Period $47,871 $45,308 $45,048 $45,055
Loan Losses 1,730 3,177 3,982 4,879
Loan Recoveries 472 412 981 909
------- ------- ------- -------
Net Charge-offs 1,258 2,765 3,001 3,970
Balance of Acquired Subsidiary 0 0 1,972 0
Provision For Loan Losses 2,294 1,834 4,888 3,292
------- ------- ------- -------
Balance, End of Period $48,907 $44,377 $48,907 $44,377
======= ======= ======= =======
Total Loans, End of Period $3,674,682 $3,180,089
Allowance For Loan Losses As a % of Total Loans 1.33 1.40
========== ==========
NON-PERFORMING ASSETS AT QUARTER END
Non-Accrual Loans $8,387 $9,845
Foreclosed Properties 1,798 1,701
------- -------
Total Non-Performing Assets $10,185 $11,546
======= =======
Non-Performing Assets As a % of Total Loans 0.28 0.36
Loans Past Due Over 90 Days $5,864 $5,512
Loans Past Due Over 90 Days As a % of Total Loans 0.16 0.17
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Average Balance Sheets
(unaudited in thousands)
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
1998 1997 1998 1997
Amount Yield/Rate Amount Yield/Rate Amount Yield/Rate Amount Yield/Rate
(pct.) (pct.) (pct.) (pct.)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans
Taxable $3,550,720 8.73 $3,107,443 8.86 $3,451,938 8.77 $3,093,278 8.82
Tax-Exempt $42,676 9.76 $42,256 10.91 42,858 9.81 44,509 10.37
---------- ---------- ---------- ----------
Total 3,593,396 8.74 3,149,699 8.89 3,494,796 8.78 3,137,787 8.87
Less: Allowance for Losses 48,754 45,426 47,497 45,382
---------- ---------- ---------- ----------
Net Loans 3,544,642 8.86 3,104,273 9.02 3,447,299 8.90 3,092,405 9.00
Securities
Taxable 1,419,604 6.42 1,225,646 6.74 1,409,578 6.49 1,216,092 6.75
Tax-Exempt 230,284 8.01 226,797 8.18 233,942 8.05 225,223 8.19
---------- ---------- ---------- ----------
Total 1,649,888 6.64 1,452,443 6.96 1,643,520 6.71 1,441,315 6.97
Federal Funds Sold & Other 32,613 5.92 27,958 5.38 23,275 5.82 33,955 5.03
---------- ---------- ---------- ----------
Total Earning Assets 5,227,143 8.14 4,584,674 8.34 5,114,094 8.18 4,567,675 8.33
Other Assets 363,973 333,604 353,598 315,539
---------- ---------- ---------- ----------
Total Assets $5,591,116 $4,918,278 $5,467,692 $4,883,214
========== ========== ========== ==========
LIABILITIES AND EQUITY
Interest Bearing Liabilities
Deposits $3,728,470 4.25 $3,425,875 4.31 $3,662,521 4.29 $3,411,683 4.28
Short-term Borrowings $723,519 5.07 $486,795 4.71 707,150 5.17 481,750 4.80
Long-term Borrowings $46,761 6.00 $59,400 6.10 46,908 6.04 54,671 6.13
---------- ---------- ---------- ----------
Total Interest
Bearing Liabilities 4,498,750 4.40 3,972,070 4.38 4,416,579 4.45 3,948,104 4.37
Non-interest Bearing Deposits 499,195 411,188 472,263 402,430
Other Liabilities 45,963 49,713 46,826 48,485
---------- ---------- ---------- ----------
Total Liabilities 5,043,908 4,432,971 4,935,668 4,399,019
Shareholders' Equity 547,208 485,307 532,024 484,195
---------- ---------- ---------- ----------
Total Liabilities & Equity $5,591,116 $4,918,278 $5,467,692 $4,883,214
========== ========== ========== ==========
Interest Income To Earning Assets 8.14 8.34 8.18 8.33
Interest Expense To Earning Assets 3.79 3.80 3.84 3.78
------ ------ ------ ------
Net Interest Margin 4.35 4.54 4.34 4.55
====== ====== ====== ======
<FN> Note: Yields are computed on a fully taxable equivalent basis using the rate of 35%.
</TABLE>
<PAGE>
One Valley Bancorp, Inc.
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders.
The Regular Annual Meeting of Shareholders of One Valley was held on April
28, 1998. At that meeting the matters set forth below were voted upon. The
number votes cast for, against or withheld, as well as the number of
abstentions and broker non-votes concerning each matter and
nominee are indicated in the following tabulation.
1. Election of Directors
Withheld &
Nominee For Against Absentions
Barroner 22,559,969 0 85,187
Brown 22,566,875 0 77,568
Chilton 22,573,216 0 75,768
Evans, Jr. 22,572,386 0 76,925
Goodwin 22,570,624 0 78,034
Payne 22,572,386 0 76,925
Robinson 22,560,897 0 88,414
2. Approve Selection of Auditors
Withheld &
Nominee For Against Abstentions
Ernst & Young LLP 22,587,498 21,894 38,489
One Valley Bancorp, Inc.
Part II. Other Information
Item 6. Exhibits and Reports on Form 10-Q
a) Exhibits
3. (i) Restated Articles of Incorporation of One Valley as amended.
(ii) By-laws of One Valley, as amended.
27. Financial Data Schedule - electronic filing only.
b) Reports on Form 8-K
1. May 26, 1998 - One Valley Bancorp, Inc. announced the thirty-day
operating results for One Valley Bancorp and FFVA Financial
Corporation.
2. June 17, 1998 - One Valley Bancorp, Inc. announced the
Management's Discussion and Analysis of Financial Condition and
Results of Operations restated to reflect the merger of One
Valley Bancorp, Inc., and FFVA Financial Corporation.
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.
One Valley Bancorp, Inc.
DATE August 14, 1998
BY /s/ Laurance G. Jones
Laurance G. Jones
Executive Vice President and
Chief Financial Officer
BY /s/ James A. Winter
James A. Winter
Senior Vice President and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and statements of income of One Valley Bancorp as
well as supplemental schedules of the analysis of loan losses and non-performing
assets and the consolidated average balance sheets and is qualified in its
entirety by reference to such financial statements and supplemental schedules.
</LEGEND>
<RESTATED>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 155574 153515
<INT-BEARING-DEPOSITS> 1990 10964
<FED-FUNDS-SOLD> 47042 23875
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 1386666 1179412
<INVESTMENTS-CARRYING> 241600 321242
<INVESTMENTS-MARKET> 247966 320454
<LOANS> 3674682 3180089
<ALLOWANCE> 48907 44377
<TOTAL-ASSETS> 5688065 5005479
<DEPOSITS> 4248278 3885716
<SHORT-TERM> 29671 40375
<LIABILITIES-OTHER> 59201 44942
<LONG-TERM> 41862 57880
0 0
0 0
<COMMON> 371622 299048
<OTHER-SE> 180400 183220
<TOTAL-LIABILITIES-AND-EQUITY> 5688065 5005479
<INTEREST-LOAN> 151854 137258
<INTEREST-INVEST> 51850 47032
<INTEREST-OTHER> 672 847
<INTEREST-TOTAL> 204376 185137
<INTEREST-DEPOSIT> 77960 72443
<INTEREST-EXPENSE> 97485 85576
<INTEREST-INCOME-NET> 106891 99561
<LOAN-LOSSES> 4888 3292
<SECURITIES-GAINS> 723 147
<EXPENSE-OTHER> 78428 69032
<INCOME-PRETAX> 52522 50212
<INCOME-PRE-EXTRAORDINARY> 52522 50212
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 34530 33045
<EPS-PRIMARY> 1.07 1.03
<EPS-DILUTED> 1.05 1.01
<YIELD-ACTUAL> 8.18 8.33
<LOANS-NON> 8387 9845
<LOANS-PAST> 5864 5512
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 45048 45055
<CHARGE-OFFS> 3982 4879
<RECOVERIES> 981 909
<ALLOWANCE-CLOSE> 48907 44377
<ALLOWANCE-DOMESTIC> 48907 44377
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
Exhibit 3(i)
Article VI of the Restated Articles of Incorporation was amended as follows:
The amount of total authorized capital stock of the corporation
shall be Seventy-One Million shares, consisting of Seventy Million shares of
Common Stock with a par value of Ten Dollars ($10.00) per share and One
Million shares of Preferred Stock with a par value of Ten Dollars ($10.00)
per share.
Complete copy of the Restated Articles of Incorporation as
amended:
RESTATED
ARTICLES OF INCORPORATION
OF
ONE VALLEY BANCORP, INC.
ARTICLE I
The name of the Corporation shall be One Valley Bancorp, Inc.
ARTICLE II
The address of the principal office of said corporation will be One
Valley Square, in the City of Charleston, in the County of Kanawha and State
of West Virginia, 25326.
ARTICLE III
The purpose or purposes for which this corporation is formed are as
follows: To transact any or all lawful business for which corporations may
be incorporated under the corporation laws of the State of West Virginia.
ARTICLE IV
No shareholder or other person shall have any preemptive rights
whatsoever.
ARTICLE V
Provisions for the Regulation of the
Internal Affairs of the Corporation
A. Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved (including, without
limitation, as a witness or deponent) in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, investigative or otherwise in nature ("Proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the corporation or
is or was serving at the written request of the corporation's board of
directors, president or their delegate as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such Proceeding is alleged action or omission in an
official capacity as a director, officer, trustee, employee or agent or in
any other capacity, shall be indemnified and held harmless by the
corporation to the fullest extent authorized by law, including but not
limited to the West Virginia Code, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than said Code permitted the corporation to provide prior to such
amendment), against all expenses, liability and loss (including, without
limitation, attorneys' fees and disbursements, judgments, fines, ERISA or
other similar or dissimilar excise taxes or penalties and amounts paid or to
be paid in settlement) incurred or suffered by such person in connection
therewith; provided, however, that the corporation shall indemnify any such
person seeking indemnity in connection with a Proceeding (or part thereof)
initiated by such person only if such Proceeding (or part thereof) was
authorized by the Board of Directors of the corporation; provided, further,
that the corporation shall not indemnify any person for civil money
penalties or other matters, to the extent such indemnification is
specifically not permissible pursuant to federal or state statute or
regulation, or order or rule of a regulatory agency of the federal or state
government with authority to enter, make or promulgate such order or rule.
Such right shall include the right to be paid by the corporation expenses,
including, without limitation, attorneys' fees and disbursements, incurred
in defending or participating in any such Proceeding in advance of its final
disposition; provided, however, that the payment of such expenses in advance
of the final disposition of such Proceeding shall be made only upon delivery
to the corporation of an undertaking, by or on behalf of such director or
officer, in which such director or officer agrees to repay all amounts so
advanced if it should be ultimately determined that such person is not
entitled to be indemnified under this Article or otherwise. The termination
of any Proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interest of the
corporation, or that such person did have reasonable cause to believe that
his conduct was unlawful.
B. Right of Claimant to Bring Suit. If a claim under this
Article is not paid in full by the corporation within thirty days after a
written claim therefor has been received by the corporation, the claimant
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim and, if successful, in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending or
participating in any Proceeding in advance of its final disposition where
the required undertaking has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it permissible
under the applicable law for the corporation to indemnify the claimant for
the amount claimed, but the burden of proving such defense shall be on the
corporation.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification
or reimbursement of the claimant is permitted in the circumstances because
he or she has met the applicable standard of conduct, nor an actual
determination by the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard
of conduct.
C. Contractual Rights: Applicability. The right to be
indemnified or to the reimbursement or advancement of expenses pursuant
hereto (i) is a contract right based upon good and valuable consideration,
pursuant to which the person entitled thereto may bring suit as if the
provisions hereof were set forth in a separate written contract between the
corporation and the director or officer, (ii) is intended to be retroactive
and shall be available with respect to events occurring prior to the
adoption hereof, and (iii) shall continue to exist after the rescission or
restrictive modification hereof with respect to events occurring prior
thereto.
D. Requested Service. Any director or officer of the
corporation serving, in any capacity, (i) another corporation of which five
percent (5%) or more of the shares entitled to vote in the election of its
directors is held by the corporation, or (ii) any employee benefit plan of
the corporation or of any corporation referred to in clause (i), shall be
deemed to be doing so at the request of the corporation.
E. Non-Exclusivity of Rights. The rights conferred on any
person hereunder shall not be exclusive of and shall be in addition to any
other right which such person may have or may hereafter acquire under any
statute, provision of the Certificate of Incorporation, Bylaws, agreement,
vote of shareholders or disinterested directors or otherwise.
F. Insurance. The corporation may purchase and maintain
insurance, at its expense, to protect itself and any director, officer,
employee or agent of the corporation or another corporation, partnership,
joint venture, trust or other enterprise against such expense, liability or
loss, whether or not the corporation would have the power to indemnify such
person against such expense, liability or loss under West Virginia law.
Article V.1. Board of Directors
(a) Number, election and terms. Except as otherwise fixed by
or pursuant to the provisions of Article VI hereof relating to the rights of
the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, the number of the directors of the
Corporation shall be fixed from time to time by or pursuant to the Bylaws of
the Corporation. The directors, other than those who may be elected by the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, shall be classified, with respect
to the time for which they severally hold office, into three classes, as
nearly equal in number as possible, as shall be provided in the manner
specified in the Bylaws of the Corporation, one class to be originally
elected for a term expiring at the annual meeting of stockholders to be held
in 1987, another class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1988, and another class to be
originally elected for a term expiring at the annual meeting of stockholders
to be held in 1989, with each class to hold office until its successor is
elected and qualified. At each annual meeting of the stockholders of the
Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the
annual meeting of stockholders held in the third year following the year of
their election.
(b) Stockholder nomination of director candidates. Advance
notice of stockholder nominations for the election of directors shall be
given in the manner provided in the Bylaws of the Corporation.
(c) Newly created directorships and vacancies. Except as
otherwise provided for or fixed by or pursuant to the provisions of Article
VI hereof relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances, newly created
directorships resulting from any increase in the number of directors and any
vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative
vote of a majority of the remaining directors then in office, even though
less than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence to fill a vacancy resulting from
death, resignation, disqualification, removal or other cause shall hold
office for the remainder of the full term of the class of directors in which
the vacancy occurred and until such director's successor shall have been
elected and qualified and directors elected in accordance with the preceding
sentence by reason of an increase in the number of directors shall hold
office only until the next election of directors by the shareholders and
until such director's successor shall have been elected and qualified. No
decrease in number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
(d) Removal. Subject to the rights of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances, any director
may be removed from office, with or without cause, and only by the
affirmative vote of the holders of 80% of the combined voting power of the
then outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class.
(e) Amendment, repeal, etc. Notwithstanding anything contained
in these Articles of Incorporation to the contrary, the affirmative vote of
the holders of at least 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, or adopt any
provision inconsistent with or repeal this Article V.1.
Article V.2. Bylaw Amendments
The Board of Directors shall have power to make, alter, amend and
repeal the Bylaws of the Corporation (except so far as the Bylaws of the
Corporation adopted by the stockholders shall otherwise provide). Any
Bylaws made by the directors under the powers conferred hereby may be
altered, amended or repealed by the directors or by the stockholders.
Notwithstanding the foregoing and anything contained in these Articles of
Incorporation to the contrary, Article II, Sections 1, 4 and 13, Article
III, Sections 2, 9, and 13, and Article XI of the Bylaws shall not be
altered, amended or repealed and no provision inconsistent therewith shall
be adopted without the affirmative vote of the holders of at least 80% of
the voting power of all the shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
Notwithstanding anything contained in these Articles of Incorporation to the
contrary, except as otherwise provided by law for separate class votes, the
affirmative vote of the holders of at least 80% of the voting power of all
the shares of the Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be required to alter,
amend or adopt any provision inconsistent with or repeal this Article V.2.
ARTICLE VI
The amount of total authorized capital stock of the corporation shall
be Seventy-One Million shares, consisting of Seventy Million shares of
Common Stock with a par value of Ten Dollars ($10.00) per share and One
Million shares of Preferred Stock with a par value of Ten Dollars ($10.00)
per share.
The Board of Directors shall have the power and authority at any time
and from time to time to issue, sell or otherwise dispose of any unissued
but authorized shares of any class or classes of stock presently provided
for in the Certificate of Incorporation, or that may hereafter be provided
for by a subsequent amendment to the Certificate of Incorporation, to such
persons or parties, including the holders of Common Stock or Preferred Stock
or of any such other class of stock, for such considerations (not less than
the par value, if any, thereof) and upon such terms and conditions as the
Board of Directors in its discretion may deem to be in the best interests of
the Corporation. Except as expressly provided to the contrary hereinafter,
such issuance, sale or other disposition may be made without offering such
shares, or any part or class thereof, to the holders of Common Stock or
Preferred Stock or any such other class of stock, and no such holder shall
have any preemptive right to subscribe for any such shares.
Each holder of Common Stock of the Corporation entitled to vote shall
have one vote for each share thereof held.
The voting powers, designations, preferences, limitations,
restrictions and relative rights of the Preferred Stock are as follows:
(1) Issuance in Series. Preferred stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be
of equal rank and shall be identical, except in respect of the particulars
that are fixed in the Certificate of Incorporation or may be fixed by the
Board of Directors as hereinafter provided pursuant to authority which is
hereby expressly vested in the Board of Directors; and each share of
Preferred Stock, whether of the same or a different series, shall be
identical in all respects with the other shares of Preferred Stock, except
as to the following relative rights and preferences, as to which there may
be variations between different series:
(a) the rate of dividends;
(b) whether shares may be redeemed and, if so, the
redemption price and the terms and conditions of
redemption;
(c) the amount payable upon shares in event of
voluntary and involuntary liquidation;
(d) sinking fund provisions, if any, for the
redemption or purchase of shares;
(e) the terms and conditions, if any, on which
shares may be converted; and
(f) voting rights, if any.
The Board of Directors of the Corporation shall have all of the power
and authority with respect to the shares of Preferred Stock that the
shareholders may delegate to the Board of Directors pursuant to the terms
and provisions of Chapter 31, Article I, Sections 78 and 79 of the Code of
West Virginia, as amended, and shall exercise such power and authority by
the adoption of a resolution or resolutions as prescribed by law.
(2) Dividends. The holders of the Preferred Stock shall be
entitled to receive, when and as declared by the Board of Directors, out of
any funds legally available therefor, cumulative preferential dividends in
cash, at the rate per annum fixed for such series, and no more. Dividends
on shares of the Preferred Stock shall accrue from the date of the initial
issue of shares of such series, or from such other date as may be fixed by
the Board of Directors, shall be cumulative, and shall be payable quarterly
on the last day of March, June, September and December in each year to
shareholders of record on the fifteenth day of the calendar month in which
such dividends are payable, with the first dividend on the Preferred Stock
being payable on the respective dividend date which follows the first full
calendar quarter after the initial issue of shares. Each share of Preferred
Stock shall rank on a parity with each other share of Preferred Stock,
irrespective of series, with respect to preferential dividends at the
respective rates fixed for such series, and no dividend shall be declared or
paid or set apart for payment for the Preferred Stock of any series unless
at the same time a dividend in like proportion to the accrued and unpaid
dividends upon the Preferred Stock of each other series shall be declared or
paid or set apart for payment, as the case may be, on Preferred Stock of
each other series then outstanding. Accrued and unpaid dividends on the
Preferred Stock shall not bear interest.
(3) Dividend Restriction on Junior Stock. So long as any
shares of Preferred Stock are outstanding, the Corporation shall not pay or
declare any cash dividends whatsoever on the Common Stock or any other class
of stock ranking junior to the Preferred Stock unless (a) all dividends on
the Preferred Stock of all series for all past dividend periods shall have
been paid, or declared and a sum sufficient for the payment thereof set
apart, and (b) there shall exist no default in respect of any sinking fund
or purchase fund for the redemption or purchase of shares of Preferred Stock
of any series or such default shall have been waived by the holders of at
least a majority of the then issued and outstanding shares of Preferred
Stock of such series by a vote at a meeting called for such purpose or by
written waiver with or without a meeting.
(4) Liquidation or Dissolution. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, then, before any distribution or payment shall be made to the
holders of the Common Stock or any other class of stock of the corporation
ranking junior to the Preferred Stock in respect of dividends or
distribution of assets upon liquidation, the holders of the Preferred Stock
shall be entitled to be paid in full, in the event of a voluntary or
involuntary liquidation, dissolution or winding up, the respective amounts
fixed for such series, plus in each case a sum equal to accrued and unpaid
dividends thereon to the date of payment thereof. After such payment shall
have been made in full to the holders of the Preferred Stock, the remaining
assets and funds of the Corporation shall be distributed among the holders
of the stock of the Corporation ranking junior to the Preferred Stock in
respect of dividends or distribution of assets upon liquidation according to
their respective rights and preferences and in each case according to their
respective shares. In the event that the assets of the Corporation
available for distribution to holders of Preferred Stock shall not be
sufficient to make the payment herein required to be made in full, such
assets shall be distributed to the holders of the respective shares of
Preferred stock pro rata in proportion to the amounts payable upon such
share thereof. Neither the merger or consolidation of the Corporation into
or with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the meaning
of this Section 4, but the sale, lease or conveyance of all or substantially
all of its assets shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 4.
(5) Status of Shares Redeemed or Retired. Preferred Stock
redeemed or otherwise retired by the Corporation shall, upon the filing of
such statement as may be required by law, assume the status of authorized
but unissued Preferred Stock and may thereafter be reissued in the same
manner as other authorized but unissued Preferred Stock.
(6) Amendments. Subject to such requirements as may be
prescribed by law or as may be expressly set forth in the foregoing
provisions of this Article VI or in any amendment to these Articles
establishing and designating a series of shares of Preferred Stock, any of
the foregoing terms and provisions of this Article VI may be altered,
amended or repealed or the application thereof suspended or waived in any
particular case and changes in any of the designations, preferences,
limitations and relative rights of the Preferred Stock may be made with the
affirmative vote, at a meeting called for that purpose, or the written
consent with or without a meeting, of the holders of at least two-thirds of
the then issued and outstanding shares of Preferred Stock; provided that
neither the rate of dividend nor the amount payable upon the redemption or
in the event of voluntary or involuntary liquidation on any share of
Preferred Stock may be reduced without the consent of all of the holders
thereof.
Certain Business Combinations
Article VI.1. Vote Required for Certain Business Combinations
A. Higher Vote for Certain Business Combinations. In addition
to any affirmative vote required by law or these Articles of Incorporation,
and except as otherwise expressly provided in Section VI.2 of this Article
VI:
(i) any merger or consolidation of the Corporation or
any Subsidiary (as hereinafter defined) with (a) any Interested
Stockholder (as hereinafter defined) or (b) any other corporation
(whether or not itself an Interested Stockholder) which is, or
after such merger or consolidation would be, an Affiliate (as
hereinafter defined) of any Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market
Value of $5,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of transactions) of
any securities of the Corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities or other property (or
a combination thereof) having an aggregate Fair Market Value of
$5,000,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of an Interested Stockholder or any Affiliate of any
Interested Stockholder; or
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or
any merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or into
or otherwise involving an Interested Stockholder) which has the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which
is directly or indirectly owned by any Interested Stockholder or
any Affiliate of any Interested Stockholder; shall require the
affirmative vote of the holders of at least 80% of the voting
power of the then outstanding shares of capital stock of the
Corporation entitled to vote (the "Voting Stock"), voting together
as a single class (it being understood that for purpose of this
Article VI, each share of the Voting Stock shall have the number
of votes granted to it pursuant to Article VI of these Articles of
Incorporation). Such affirmative vote shall be required,
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
B. Definition of "Business Combination". The term "Business
Combination" as used in this Article VI shall mean any transaction which is
referred to in any one or more of clauses (i) through (v) of paragraph A of
this Section VI.1.
Article VI.2. When Higher Vote is Not Required
The provisions of Section VI.1 of this Article VI shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law
and any other provision of these Articles of Incorporation, if all of the
conditions specified in either of the following paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the Disinterested
Directors (as hereinafter defined).
B. Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) the aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration other
than cash to be received per share by holders of Common Stock in
such Business Combination shall be at least equal to the higher of
the following:
(a) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock
acquired by it (1) within the two-year period
immediately prior to the first public announcement of
the proposal of the Business Combination (the
"Announcement Date") or (2) in the transaction in which
it became an Interested Stockholder, whichever is
higher; and
(b) the Fair Market Value per share of
Common Stock on the Announcement Date or on the date on
which the Interested Stockholder became an Interested
Stockholder (such latter date is referred to in this
Article VI as the "Determination Date"), whichever is
higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per
share by holders of shares of any other class of outstanding
Voting Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this
paragraph B(ii) shall be required to be met with respect to every
class of outstanding Voting Stock, whether or not the Interested
Stockholder has previously acquired any shares of a particular
class of Voting Stock):
(a) (if applicable) the highest per share
price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of such class of
Voting Stock acquired by it (1) within the two-year
period immediately prior to the Announcement Date or (2)
in the transaction in which it became an Interested
Stockholder, whichever is higher;
(b) (if applicable) the highest
preferential amount per share to which the holders of
shares of such class of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; and
(c) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(iii) The consideration to be received by holders of
a particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of Voting
Stock. If the Interested Stockholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the
form of consideration for such class of Voting Stock shall be
either cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired by it.
The price determined in accordance with paragraphs B(i) and B(ii)
of this Section VI.2 shall be subject to appropriate adjustment in
the event of any stock dividend, stock split, combination of
shares or similar event.
(iv) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (a) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to
declare and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on the outstanding Preferred
Stock; (b) there shall have been (1) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as approved
by a majority of the Disinterested Directors, and (2) an increase
in such annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of the
Common Stock, unless the failure so to increase such annual rate
is approved by a majority of the Disinterested Directors; and (c)
such Interested Stockholder shall not have become the beneficial
owner of any additional shares of Voting Stock except as part of
the transaction which results in such Interested Stockholder
becoming an Interested Stockholder.
(v) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(vi) A proxy or information statement describing the
proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to stockholders of
the Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions).
Article VI.3. Certain Definitions
For the purposes of this Article VI:
A. A "person" shall mean any individual, firm, corporation or
other entity.
B. "Interested Stockholder" shall mean any person (other than
the Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding Voting
Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly, or indirectly, of 10%
or more of the voting power of the then outstanding Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to
any shares of Voting Stock which were at any time within the two-
year period immediately prior to the date in question beneficially
owned by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or
indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
D. For the purposes of determining whether a person is an
Interested Stockholder pursuant to paragraph B of this Section VI.3, the
number of shares of Voting Stock deemed to be outstanding shall include
shares deemed owned through application of paragraph C of this Section VI.3
but shall not include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
E. "Affiliate" or "Associates" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
January 1, 1986.
F. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph B of this Section VI.3, the
term "Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
G. "Disinterested Director" means any member of the Board of
Directors of the Corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the time that
the Interested Stockholder became an Interested Stockholder, and any
successor of a Disinterested Director who is unaffiliated with the
Interested Stockholder and is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the Board;
provided, however, that all directors of the Corporation who are elected as
directors at the 1986 annual meeting of shareholders of the Corporation
shall be deemed to be Disinterested Directors, notwithstanding the above
provisions.
H. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape for New
York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, or the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing bid quotation with respect to a share of such stock during the 30-
day period preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or any
system then in use, or if not listed with NASDAQ, the average bid and ask
prices available from brokerage firms in Charleston, West Virginia, or if
such information is not available, the fair market value on the date in
question of a share of such stock as determined by the Board in good faith;
and (ii) in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by the Board in
good faith.
I. In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be received" as
used in paragraphs B(i) and (ii) of Section VI.2 of this Article VI shall
include the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
Article VI.4. Powers of the Board of Directors
A majority of the directors of the Corporation shall have the power
and duty to determine for the purposes of this Article VI, on the basis of
information known to them after reasonable inquiry, (A) whether a person is
an Interested Stockholder, (B) the number of shares of Voting Stock
beneficially owned by any person, (C) whether a person is an Affiliate or
Associate of another, (D) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary in
any Business Combination has, an aggregate Fair Market Value of $5,000,000
or more. A majority of the directors of the Corporation shall have the
further power to interpret all of the terms and provisions of this Article
VI.
Article VI.5. No Effect on Fiduciary Obligations of Interested Stockholders
Nothing contained in this Article VI shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.
ArticleVI.6. Amendment, Repeal, etc.
Notwithstanding any other provisions of these Articles of
Incorporation or the Bylaws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws of the Corporation), the affirmative vote of the
holders of 80% or more of the outstanding Voting Stock entitled to vote,
voting together as a single class, shall be required to amend or repeal, or
adopt any provisions inconsistent with this Article VI.
ARTICLE VII
The full name and address of the incorporator is:
NAME ADDRESS
Robert F. Baronner One Valley Square
Charleston, West Virginia 25326
ARTICLE VIII
The existence of this corporation is to be perpetual.
ARTICLE IX
The full name and address of the appointed person to whom notice or
process may be sent is: President, One Valley Bancorp, Inc., One Valley
Square, Charleston, West Virginia 25326.
ARTICLE X
The number of directors constituting the initial board of directors
of the corporation is twenty-one (21) and the names and addresses of the
persons who shall serve as directors until the first annual meeting of
shareholders or until their successors are elected and shall qualify are:
NAME ADDRESS
Robert F. Baronner 1520 Stonehenge Road
Charleston, West Virginia 25314
NAME ADDRESS
Elmer A. Braun 1507 Dogwood Road
Charleston, West Virginia 25314
James F. Brown, III 1701 Edgewood Drive
Charleston, West Virginia 25302
James K. Brown 1820 Devondale Circle
Charleston, West Virginia 25314
John T. Chambers, M.D. 888 Chappell Road
Charleston, West Virginia 25314
Lyell B. Clay 1230 Staunton Road
Charleston, West Virginia 25314
Hugh A. Curry 1553 Bridge Road
Charleston, West Virginia 25314
Edward I. Goldsmith 1272 Louden Heights Road
Charleston, West Virginia 25314
Frank A. Hardy Route 5, Box 33
Lewisburg, West Virginia 24901
Eugene F. Imbrogno, Jr. 3 Dreamview Lane
Charleston, West Virginia 25314
Charles T. Jones 1502 Hampton Road
Charleston, West Virginia 25314
Virgil W. O'Dell 1108 Kanawha Bouldvard, East
Apartment 502
Charleston, West Virginia 25301
John L. D. Payne 1508 Connell Road
Charleston, West Virginia 25314
Angus E. Peyton 1401 Quincy Lane
Charleston, West Virginia 25314
NAME ADDRESS
Mary Price Ratrie Kanawha Salines
Malden, West Virginia 25306
Turner R. Ratrie, Jr. 1530 Bedford Road
Charleston, West Virginia 25314
James R. Thomas, II 820 Middle Road
Charleston, West Virginia 25314
C. Hyde Tucker 2029 Huber Road
Charleston, West Virginia 25314
Richard M. Venable, Jr. 925 Newton Road
Charleston, West Virginia 25314
John M. Wells, Sr. 888 Chester Road
Charleston, West Virginia 25302
Thomas D. Wilkerson 1015 Sand Hill Drive
St. Albans, West Virginia 25177
Exhibit 3(ii)
Article III, Section 2 of the Bylaws was amended as follows:
Section 2. Number, Election and Terms; Nominations. Except as
otherwise fixed by or pursuant to the provisions of Article VI of the
Articles of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation to elect additional directors under specified
circumstances, the number of the directors of the Corporation shall be fixed
from time to time by resolution of the Board of Directors but shall not be
less than six nor more than thirty-three. The directors, other than those
who may be elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, shall
be classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, as
determined by the board of Directors of the Corporation, one class to be
originally elected for a term expiring at the annual meeting of stockholders
to be held in 1987, another class to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 1988, and
another class to be originally elected for a term expiring at the annual
meeting of shareholders to be held in 1989, with each class to hold office
until its successor is elected and qualified. At each annual meeting of the
shareholders of the Corporation, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a
term expiring at the annual meeting of shareholders held in the third year
following the year of their election. Nominations for the election of
directors shall be given in the manner provided in Article II, Section 13,
of these bylaws. Directors need not be residents of the State of West
Virginia, but shall hold not less than one hundred shares of the capital
stock of the Corporation in order to be eligible to serve as a director of
the Corporation and, commencing with the election of directors in the year
1998, prior to the expiration of the three year period immediately following
election to the Board of Directors, shall hold not less than five hundred
shares of capital stock of the Corporation in order to be eligible to be re-
elected as a Director of the Corporation.
Article III, Section 10 of the Bylaws was amended as follows:
Section 10. Compensation. By resolution of the Board of
Directors, each director may be paid his or her expenses, if any, of
attendance at each meeting of the Board of Directors, or committee thereof,
and may be compensated for his or her services as a director by a stated
salary or a fixed sum for attendance at each meeting of the Board of
Directors or committee thereof or by shares of capital stock of the
Corporation issued by the Corporation or acquired by the Corporation for the
benefit of Directors so compensated or any combination of any or all
thereof.
Complete copy of the Bylaws as amended:
(As Amended 7/22/98)
BYLAWS
OF
ONE VALLEY BANCORP, INC.
ARTICLE I. OFFICES
The principal offices of the Corporation shall be located in the City
of Charleston, County of Kanawha, State of West Virginia. The Corporation
may have such other offices, either within or without the State of West
Virginia, as the Board of Directors may designate or as the business of the
Corporation may require from time to time.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the fourth Tuesday in the month of April in each year, at
the hour of 12:00 noon, local time, or at such other time on such other day
within such month as shall be fixed by the Board of Directors. If the day
fixed for the annual meeting shall be a legal holiday in the State of the
principal office of the Corporation, such meeting shall be held on the next
succeeding business day. At an annual meeting of the shareholders, only
such business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting business must
be (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors,
or (c) otherwise properly brought before the meeting by a shareholder. For
business to be properly brought before an annual meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of
the Corporation, not less than 40 days prior to the meeting; provided,
however, that in the event that less than 50 days' notice or prior public
disclosure of the date of the meeting is given or made to shareholders,
notice by the shareholder to be timely must be so received not later than
the close of business on the 8th day following the day on which such notice
of the date of the annual meeting was mailed or such public disclosure was
made. A shareholder's notice to the Secretary shall set forth as to each
matter the shareholder proposes to bring before the annual meeting (a) 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,
(b) the name and address, as they appear on the Corporation's books, of the
shareholder proposing such business, (c) the class and number of shares of
the Corporation which are beneficially owned by the shareholder, and (d) any
material interest of the shareholder in such business. Notwithstanding
anything in the Bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 1. The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Section 1,
and if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
Section 2. Special Meetings. Special meetings of the shareholders,
for any purpose or purposes, may be called by the Chairman of Board, if any,
President, Secretary, or by the Board of Directors, and shall be called by
the President at the request of the holders of not less than one-tenth of
all outstanding shares of the Corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of West Virginia, as the place
of meeting for any annual meeting or for any special meeting called by the
Board of Directors. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
Corporation.
Section 4. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, the purpose or purposes for which the meeting
is called, shall be delivered not less than ten nor more than fifty days
before the date of the meeting, either personally or by mail, by or at the
direction of the Chairman of the Board, President, Secretary or the officer
of other persons calling the meeting, to each shareholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the
shareholder at his address as it appears on the stock transfer books of the
Corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For
the purpose of determining shareholders entitled to notice of or vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting.
In lieu of closing the stock transfer books, the Board of Directors may fix
in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than fifty days and, in
case of a meeting of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed
and no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders
entitled to received payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
Section 6. Voting Record. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make a complete
record of the shareholders entitled to vote at each meeting of shareholders
or any adjournment thereof, arranged in alphabetical order, with the address
of and the number of shares held by each. Such record shall be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting for the
purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority
of the outstanding shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders present
at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave
less than a quorum.
Section 8. Proxies. At all meetings of shareholders, a shareholder
may vote in person or by proxy executed in writing by the shareholder or by
his duly authorized attorney-in-fact. Such proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 9. Voting of Shares. Subject to the provisions of Section
12 of this Article II, each outstanding share entitled to vote shall be
entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
Section 10. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy
as the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such other corporation may
determine.
Shares held by an administrator, executor, guardian, committee,
curator, or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of
such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted
by such receiver without the transfer thereof into his name if authority to
do so be contained in an appropriate order of the court by which such
receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Neither treasury shares of its own stock held by the Corporation nor
shares held by another corporation if a majority of the shares entitled to
vote for the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting or counted in determining the
total number of outstanding shares at any given time for purposes of any
meeting.
Section 11. Informal Action by Shareholders. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without
a meeting if a consent in writing, setting forth the action so taken, shall
be signed by all of the shareholders entitled to vote with respect to the
subject matter thereof.
Section 12. Cumulative Voting. At each election for directors every
shareholder entitled to vote at such election shall have the right to vote,
in person or by proxy, the number of shares owned by him for as many persons
as there are directors to be elected and for whose election he has a right
to vote, or to cumulate his votes by giving one candidate as many votes as
the number of such directors multiplied by the number of his shares shall
equal, or by distributing such votes on the same principle among any number
of such candidates.
Section 13. Nominations for Election to the Board of Directors. The
nominations for election to the Board of Directors other than those made by
or on behalf of the existing management of the Corporation, shall be made by
a shareholder in writing delivered or mailed to the President not less than
14 days nor more than 50 days prior to the meeting called for the election
of directors; provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, the nominations shall be mailed or
delivered to the President not later than the close of business on the 7th
day following the day on which the notice of meeting was mailed. the notice
of nomination shall include to the extent known: (a) name and address of
proposed nominee(s); (b) principal occupation of nominee(s); (c) total
shares to be voted for each nominee; (d) name and address of notifying
shareholder; and (e) number of shares owned by notifying shareholder.
Nominations not made in accordance with these requirements may be
disregarded by the Chairman of the meeting and in such case the votes cast
for each such nominee shall likewise be disregarded.
Section 14. Rules of Conduct at the Annual Meeting. The chairman of
the annual meeting of shareholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts and
things as are necessary or desirable for the proper conduct of the meeting,
including, without limitation: maintenance of order; safety; limitations on
the time allotted to questions or comments on the affairs of the
corporation; ruling motions or comments out of order (i) as a matter of law
or (ii) as inappropriate as a personal grievance, in poor taste, unworkable,
moot, repetitious of another proposal on the agenda, or otherwise;
restrictions on entry to the meeting after the time prescribed for the
commencement thereof; and the opening and closing of the voting polls.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
Section 2. Number, Election and Terms; Nominations. Except as
otherwise fixed by or pursuant to the provisions of Article VI of the
Articles of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation to elect additional directors under specified
circumstances, the number of the directors of the Corporation shall be fixed
from time to time by resolution of the Board of Directors but shall not be
less than six nor more than thirty-three. The directors, other than those
who may be elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, shall
be classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number as possible, as
determined by the board of Directors of the Corporation, one class to be
originally elected for a term expiring at the annual meeting of stockholders
to be held in 1987, another class to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 1988, and
another class to be originally elected for a term expiring at the annual
meeting of shareholders to be held in 1989, with each class to hold office
until its successor is elected and qualified. At each annual meeting of the
shareholders of the Corporation, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a
term expiring at the annual meeting of shareholders held in the third year
following the year of their election. Nominations for the election of
directors shall be given in the manner provided in Article II, Section 13,
of these bylaws. Directors need not be residents of the State of West
Virginia, but shall hold not less than one hundred shares of the capital
stock of the Corporation in order to be eligible to serve as a director of
the Corporation and, commencing with the election of directors in the year
1998, prior to the expiration of the three year period immediately following
election to the Board of Directors, shall hold not less than five hundred
shares of capital stock of the Corporation in order to be eligible to be re-
elected as a Director of the Corporation.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this bylaw, immediately
after, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide, by resolution, the time and place, either
within or without the State of West Virginia, for the holding of additional
regular meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board,
if any, the President or the majority of the directors. The person or
persons authorized to call special meetings of the Board of Directors may
fix any place, either within or without the State of West Virginia, as the
place for holding any special meeting of the Board of Directors called by
them.
Section 5. Notice. Notice of any special meeting shall be given at
least three days previously thereto by written notice delivered personally
or mailed to each director at his business address, or by telegram. If
mailed at least five days prior to the date of meeting, such notice shall be
deemed to be delivered when deposited in the United States mail, so
addressed, with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is delivered
to the telegraph company. Any director may waive notice of any meeting.
The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of
such meeting, except as otherwise provided by statute.
Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
Section 8. Action Without a Meeting. Any action required or
permitted to be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the directors.
Section 9. Newly Created Directorships and Vacancies. Except as
otherwise provided for or fixed by or pursuant to the provisions of Article
VI of the Articles of Incorporation relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified
circumstances, newly created directorships resulting from any increase in
the number of directors and any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or other cause
shall be filled by the affirmative vote of a majority of the remaining
Directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence
to fill a vacancy resulting from the death, resignation, disqualification,
removal or other cause shall hold office for the remainder of the full term
of the class of directors in which the vacancy occurred and until such
director's successor shall have been elected and qualified, and any director
elected in accordance with the preceding sentence by reason of an increase
in the number of directors shall hold office only until the next election of
directors by shareholders and until his successor shall have been elected
and qualified. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director.
Section 10. Compensation. By resolution of the Board of Directors,
each director may be paid his or her expenses, if any, of attendance at each
meeting of the Board of Directors, or committee thereof, and may be
compensated for his or her services as a director by a stated salary or a
fixed sum for attendance at each meeting of the Board of Directors or
committee thereof or by shares of capital stock of the Corporation issued by
the Corporation or acquired by the Corporation for the benefit of Directors
so compensated or any combination of any or all thereof.
Section 11. Presumption of Assent. A director of the Corporation
who is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 12. Committees.
(a) Appointment. The Board of Directors, by resolution adopted
by a majority of the full board, may establish an Executive Committee, Audit
Committee and such other standing or special committees of the board as it
may deem advisable, each of which shall consist of two or more members of
the Board of Directors. The designation of a committee and the delegation
thereto of authority shall not operate to relieve the Board of Directors, or
any member thereof, of any responsibility imposed by law.
(b) Authority. The Executive committee, when the Board of
Directors is not in session shall have and may exercise all of the authority
of the Board of Directors except to the extent, if any, that such authority
shall be limited by the resolution appointing the Executive Committee and
except also that the Executive Committee shall not have the authority of the
Board of directors in reference to amending the Articles of Incorporation,
adopting a plan of merger or consolidation, recommending to the shareholders
the sale, lease or other disposition of all or substantially all of the
property and assets of the Corporation otherwise than in the usual and
regular course of its business, recommending to the shareholders a voluntary
dissolution of the Corporation or a revocation thereof, or amending the
bylaws of the Corporation. The authority of other committees of the board
shall be set forth in the resolutions, as amended from time to time,
establishing the same.
(c) Tenure and Qualifications. Committees of the board shall
consist only of members of the Board of Directors. Each member of the
Executive Committee shall hold office until the next regular annual meeting
of the Board of Directors following his designation and until his successor
is designated as a member of the Executive Committee and is elected and
qualified. The tenure of members of other committees of the board shall be
set forth in the resolutions, as amended from time to time, establishing the
same.
(d) Meetings. Regular meetings of the committees of the board
may be held without notice at such times and places as each committee may
fix from time to time by resolution. Special meetings of the committee may
be called by any member thereof upon not less than the one day's notice
stating the place, date and hour of the meeting, which notice may be written
or oral, and if mailed at least five days prior to the date of the meeting,
shall be deemed to be delivered when deposited in the United States mail
addressed to the member of the committee at his business address. Any
member of a committee may waive notice of any meeting and no notice of any
meeting need be given to any member thereof who attends in person. The
notice of a meeting of a committee need not state the business proposed to
be transacted at the meeting.
(e) Quorum. A majority of the members of a committee shall
constitute a quorum for the transaction of business at any meeting thereof,
and action of the committee must be authorized by the affirmative vote of a
majority of the members present at a meeting at which a quorum is present.
(f) Action Without a Meeting. Any action required or permitted
to be taken by a committee at a meeting may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by
all of the members of the committee.
(g) Vacancies. Any vacancy in a committee may be filled by a
resolution adopted by a majority of the full Board of Directors.
(h) Resignations and Removal. Any member of a committee may be
removed at any time with or without cause by resolution adopted by a
majority of the full Board of Directors. Any member of a committee may
resign from the committee at any time by giving written notice to the
President or Secretary of the Corporation, and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make
it effective.
(i) Procedure. A committee shall elect a presiding officer
from its members and may fix its own rules of procedure which shall not be
inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its
information at the meeting thereof held next after the proceedings shall
have been taken.
Section 13. Removal. Subject to the rights of any class or series
of stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under the specified circumstances, any
director may be removed from office, with or without cause and only by the
affirmative vote of the holders of 80% of the combined voting power of the
then outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class.
Section 14. Participation in Meetings by Means of Conference
Telephone or Similar Instrument. Any or all directors may participate in a
meeting of the Board of Directors or in a meeting of a committee of the
Board of Directors by means of a conference telephone or any similar
electronic communications equipment by which all persons participating in
the meeting can hear each other.
Section 15. Considerations in the Event of Merger, Consolidation,
etc. In acting upon any proposed merger, consolidation, sale or other
disposition of all or substantially all the assets of the Corporation, or
any proposal by any person or group to acquire a controlling interest in the
Corporation, whether by tender or exchange offer or otherwise, or any
similar proposal regarding a potential change in control of the Corporation,
the Board of Directors shall take into account the effects that the
Corporation's actions and any such transaction may have in the short-term
and in the long-term upon the following: (1) the prospects for potential
growth, productivity and profitability of the Corporation; (2) maximizing
shareholder value; (3) the Corporation's ability to offer a complete range
of services and products to its customers; (4) the Corporation's creditors;
(5) the development and general welfare of the Corporation's current
employees; (6) the Corporation's retired employees and other beneficiaries
receiving or entitled to receive retirement, welfare or similar benefits
from or pursuant to any plan sponsored, or agreement entered into, by the
Corporation; and (7) the ability of the Corporation to provide, as a going
concern, services, employment opportunities and benefits, and otherwise to
contribute to the communities in which it does business.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof to be determined
by the Board of Directors), a Secretary, General Auditor and a Treasurer,
each of whom shall be elected by the Board of Directors. A Chairman of the
board of Directors and such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of Directors. Any
two or more offices may be held by the same person, except the offices of
President and Secretary. The President and the Chairman of the Board, if
any, shall be elected from the membership of the Board of Directors.
Section 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election shall
be held as soon thereafter as conveniently may be. Each officer shall hold
office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 5. Chairman of the Board and President. The Chairman of the
Board or the President, as the Board of Directors may from time to time
determine, shall be the principal executive officer of the Corporation. If
a Chairman of the Board is not elected or appointed, the President shall be
chief executive officer and shall act as chairman of all meetings of the
Board of Directors and as chairman of all meetings of the Executive
Committee. The principal executive officer of the Corporation shall in
general supervise and control all of the business and affairs of the
Corporation, subject to the control of the Board of Directors. He shall,
when present, preside at all meetings of the shareholders. Whether the
Chairman of the Board or the President be designated as the principal
executive officer of the Corporation the other shall, in the absence or
incapacity of the principal executive officer or by his authority may,
exercise any of the powers of the principal executive officer. The Chairman
of the Board or the President may sign deeds, mortgages, bonds, contracts,
or other instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and executing thereof shall be
expressly delegated by the Board or by these bylaws to some other officer or
agent of the Corporation, or shall be required by law to be otherwise signed
or executed. The Chairman of the board and the President shall each, in
general, perform all duties incident to their respective offices and shall
perform such other duties as may be prescribed by the Board of Directors
from time to time.
Section 6. The Vice Presidents. In the absence of the Chairman of
the Board and President or in the event of their death, inability or refusal
to act, the Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall perform the duties of the Chairman of the Board and
President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the Chairman of the Board and President. Any
Vice President may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the Corporation; and shall perform such other
duties as from time to time may be assigned to him by the principal
executive officer of the Corporation, the bylaws or the Board of Directors.
Section 7. The Secretary. The Secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the Board of Directors
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these bylaws or as required
by law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents the execution of which on behalf of the Corporation under its seal
is duly authorized; (d) keep a register of the post officer address of each
shareholder which shall be furnished to the Secretary by such shareholder;
(e) sign with the President, or a Vice President, certificates for shares of
the Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the Corporation; and (g) in general perform all duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the principal executive officer of the
Corporation, the bylaws or by the Board of Directors.
Section 8. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
Corporation; (b) receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the
name of the Corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Article V of these
bylaws; and (c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to
him by the principal executive officer of the Corporation, the bylaws or by
the Board of Directors. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the Board of Directors shall
determine.
Section 9. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may sign
with the President or a Vice President certificates for shares of the
Corporation the issuance of which shall have been authorized by a resolution
of the Board of Directors. The Assistant Treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of Directors
shall determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties as shall be assigned to them by the
Secretary orthe Treasurer, respectively, or by the principal executive
officer of the Corporation, the bylaws or by the Board of Directors.
Section 10. Officers' Salaries. The salaries of the officers shall
be fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances. The Board of Directors
may encumber and mortgage real estate and pledge, encumber and mortgage
stocks, bonds and other securities and other personal property of all types,
tangible and intangible, and convey any such property in trust to secure the
payment of corporate obligations.
Section 3. Checks, Drafts, etc.. All checks, drafts and other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the Corporation shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall
from time to time be determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the
Board of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing
shares of the Corporation shall be in such form as shall be determined by
the Board of Directors. Such certificates shall be signed by the President
or a Vice President and by the Secretary or an Assistant Secretary and
sealed with the Corporate Seal or a facsimile thereof. The signatures of
such officers upon a certificate may be facsimiles if the certificate is
manually signed on behalf of a transfer agent or a registrar, other than the
Corporation itself or one of its employees. Each certificate for shares
shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued,
with the number of shares and date of issue, shall be entered on the stock
transfer books of the Corporation. All certificates surrendered to the
Corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal representative,
who shall furnish proper evidence of authority to transfer, or by his
attorney thereunto authorized by power of attorney duly executed and filed
with the Secretary of the Corporation, and on surrender for cancellation of
the certificate for such shares. The person in whose name shares stand on
the books of the Corporation shall be deemed by the Corporation to be the
owner thereof for all purposes.
Section 3. Lost Certificates. Any person claiming a certificate of
shares to be lost or destroyed shall make an affidavit or affirmation of
that fact, and if requested do so by the Board of Directors of the
Corporation shall advertise such fact in such manner as the Board of
Directors may require, and shall give the Corporation a bond of indemnity in
such sum as the Board of Directors may direct, but not less than double the
value of shares represented by such certificate, in form satisfactory to the
Board of Directors and with or without sureties as the Board of Directors
may prescribe; whereupon the President and the Secretary may cause to be
issued a new certificate of the same tenor and for the same number of shares
as the one alleged to have been lost or destroyed, but always subject to the
approval of the Board of Directors.
Section 4. Stock Transfer Books. The stock transfer books of the
Corporation shall be kept in the principal office of the Corporation and
shares shall be transferred under such regulations as may be prescribed by
the Board of Directors.
ARTICLE VII. FISCAL YEAR
The fiscal year of the Corporation may be fixed and may be changed
from time to time by resolution of the Board of Directors. Until the Board
of Directors has acted to fix such fiscal year, the fiscal year of the
Corporation shall begin on the first day of January and end on the thirty-
first day of December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may, from time to time, declare and the
Corporation may pay dividends on its outstanding shares in the manner and
upon the terms and conditions provided by law and its Articles of
Incorporation.
ARTICLE IX. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the
Corporation and the state of incorporation and the words "Corporate Seal".
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or
director of the Corporation under the provisions of these bylaws or under
the provisions of the Articles of Incorporation or by law, a waiver thereof
in writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XI. AMENDMENTS
Subject to the provisions of the Articles of Incorporation, these
Bylaws may be altered, amended or repealed at any regular meeting of the
shareholders (or at any special meeting thereof duly called for that
purpose) by a majority vote of the shares represented and entitled to vote
at such meeting; provided that in the notice of such meeting notice of such
purpose shall be given. Subject to the laws of the State of West Virginia,
the Articles of Incorporation and these Bylaws, the Board of Directors may
be majority vote of those present at any meeting at which a quorum is
present amend these Bylaws, or enact such other bylaws as in their judgment
may be advisable for the regulation of the conduct of the affairs of the
Corporation; provided, however, that, without the affirmative vote of two-
thirds of all members of the Board, the Board may not amend the Bylaws to
(i) change the principal office of the Corporation, (ii) change the number
of directors, (iii) change the number of directors on the Executive
Committee, or (iv) make a substantial change in the duties of the Chairman
of the Board and the President.
ARTICLE XII. VOTING SHARES OF OTHER CORPORATIONS
Unless otherwise ordered by the Board of Directors, shares in other
corporations held by this Corporation may be voted by the Chairman of the
Board or the President of this Corporation.
