UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
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 0-6835
IRWIN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1286807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 Washington Street, Columbus, IN 47201
(Address of principal executive offices)
(Zip Code)
812/376-1680
__________________________________________
Registrant's telephone number, including area code)
(Former name, former address and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes No
As of July 31, 1999, there were outstanding 21,667,110
common shares, no par value, of the Registrant.
PART I
Item 1
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (Unaudited)
<CAPTION>
(In thousands, except for shares) June 30, December 31,
Assets: 1999 1998
<S> <C> <C>
Cash and due from banks $56,960 $68,942
Federal funds sold 1,900 8,580
Cash and cash equivalents 58,860 77,522
Interest-bearing deposits with financial institutions 28,444 18,441
Trading assets 47,589 32,148
Investment securities (Market value: $44,599
in 1999 and $48,537 in 1998)-Note 2 44,501 48,055
Loans held for sale - Note 3 575,147 936,788
Loans and leases, net of unearned income - Note 4 613,087 556,991
Less: Allowance for loan and lease losses - Note 5 (9,812) (9,888)
603,275 547,103
Servicing assets - Note 6 134,925 117,129
Accounts receivable 54,934 71,087
Accrued interest receivable 6,767 13,071
Premises and equipment 21,711 21,382
Other assets 44,720 50,418
$1,620,873 $1,933,144
Liabilities and Shareholders' Equity:
Deposits
Noninterest-bearing $385,718 $477,724
Interest-bearing 418,864 389,516
Certificates of deposit over $100,000 103,521 141,971
908,103 1,009,211
Short-term borrowings- Note 7 435,669 644,861
Long-term debt- Note 8 2,483 2,839
Other liabilities 73,834 83,001
Total liabilities 1,420,089 1,739,912
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust- Note 9 48,034 47,999
Shareholders' equity
Preferred stock, no par value - authorized
4,000,000 shares; none issued -- --
Common stock; no par value - authorized 40,000,000 shares;
issued 23,402,080 shares in 1999 and 1998; including
1,860,843 and 1,729,324 shares in treasury in 1999 and 1998,
respectively 29,965 29,965
Additional paid-in capital 1,519 2,595
Unrealized gains (losses) on investment securities (9) 85
Retained earnings 156,655 142,232
188,130 174,877
Less treasury stock, at cost (35,380) (29,644)
Total shareholders' equity 152,750 145,233
$1,620,873 $1,933,144
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
Three Months Ended
June 30,
(In thousands, except for per share) 1999 1998
Interest income:
<S> <C> <C>
Loans and leases $12,538 $13,976
Investment securities:
Taxable 982 878
Tax-exempt 69 80
Loans held for sale 14,883 13,255
Trading Account 1,589 565
Federal funds sold 274 67
Total interest income 30,335 28,821
Interest expense:
Deposits 5,751 6,055
Borrowings 6,802 6,076
Total interest expense 12,553 12,131
Net interest income 17,782 16,690
Provision for loan and lease losses - Note 5 2,330 1,056
Net interest income after provision for
loan and lease losses 15,452 15,634
Other income:
Loan origination fees 12,613 14,037
Gain from sales of loans 16,098 18,885
Loan servicing fees 15,943 13,624
Amortization and impairment of servicing assets 4,573 7,954
Net loan administration income 11,370 5,670
Gain on sale of mortgage servicing 10,214 10,057
Trading gains (losses) (639) (972)
Brokerage fees and commissions 411 292
Trust fees 544 560
Service charges on deposit accounts 445 394
Insurance commissions, fees and premiums 1,019 466
Other 1,444 714
53,519 50,103
Other expense:
Salaries 28,808 28,792
Pension and other employee benefits 4,511 4,062
Office expense 3,058 3,159
Premises and equipment 5,804 4,602
Marketing and development 2,337 3,035
Other 10,305 9,239
54,823 52,889
Income before income taxes 14,148 12,848
Provision for income taxes 5,361 4,628
8,787 8,220
Distribution on company-obligated mandatorily
redeemable preferred securities of subsidiary trust 1,174 1,174
Net income available to common shareholders $7,613 $7,046
Earnings per share of common stock available to shareholders:
Basic - Note 10 $0.35 $0.32
Diluted - Note 10 $0.35 $0.32
Dividends per share of common stock $0.05 $0.04
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
<CAPTION>
Six Months Ended
June 30,
(In thousands, except for per share) 1999 1998
Interest income:
<S> <C> <C>
Loans and leases $24,197 $30,389
Investment securities:
Taxable 1,987 1,617
Tax-exempt 141 155
Loans held for sale 32,447 23,484
Trading Account 2,875 1,728
Federal funds sold 417 414
Total interest income 62,064 57,787
Interest expense:
Deposits 11,413 11,372
Borrowings 14,943 15,617
Total interest expense 26,356 26,989
Net interest income 35,708 30,798
Provision for loan and lease losses - Note 5 3,531 2,674
Net interest income after provision for
loan and lease losses 32,177 28,124
Other income:
Loan origination fees 26,028 27,009
Gain from sales of loans 37,635 34,863
Loan servicing fees 31,375 27,501
Amortization and impairment of servicing assets 5,632 14,923
Net loan administration income 25,743 12,578
Gain on sale of mortgage servicing 22,340 20,013
Trading gains (losses) (10,386) 392
Brokerage fees and commissions 763 510
Trust fees 1,120 1,106
Service charges on deposit accounts 847 798
Insurance commissions, fees and premiums 1,507 863
Other 2,569 1,806
108,166 99,938
Other expense:
Salaries 57,407 54,296
Pension and other employee benefits 9,984 8,505
Office expense 6,415 6,079
Premises and equipment 11,472 9,321
Marketing and development 5,138 6,326
Other 19,518 17,569
109,934 102,096
Income before income taxes 30,409 25,966
Provision for income taxes 11,475 9,507
18,934 16,459
Distribution on company-obligated mandatorily
redeemable preferred securities of subsidiary trust 2,349 2,349
Net income available to common shareholders $16,585 $14,110
Earnings per share of common stock available to shareholders:
Basic - Note 10 $0.77 $0.65
Diluted - Note 10 $0.76 $0.64
Dividends per share of common stock $0.10 $0.08
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<CAPTION>
Unrealized
Gains/Losses Additional
Retained on Investment Common Paid in Treasury
Total Earnings Securities Stock Capital Stock
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at April 1, 1999 153,566 150,119 44 29,965 2,881 (29,443)
Comprehensive Income: Note 1
Net Income 7,613
Other Comprehensive Income (53)
Total 7,560
Cash dividends (1,077) (1,077)
Purchase of treasury stock (7,119) (7,119)
Sales of treasury stock (180) (1,362) 1,182
Balance June 30, 1999 152,750 156,655 (9) 29,965 1,519 (35,380)
Balance at April 1, 1998 130,097 121,606 62 29,965 986 (22,522)
Comprehensive Income: Note 1
Net Income 7,046
Other Comprehensive Income
Total 7,046
Cash dividends (868) (868)
Purchase of treasury stock (5,042) (5,042)
Sales of treasury stock 630 208 422
Balance June 30, 1998 131,863 127,784 62 29,965 1,194 (27,142)
</TABLE>
<TABLE>
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<CAPTION>
Unrealized
Gains/Losses Additional
Retained on Investment Common Paid in Treasury
Total Earnings Securities Stock Capital Stock
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999 145,233 142,232 85 29,965 2,595 (29,644)
Comprehensive Income: Note 1
Net Income 16,585
Other Comprehensive Income (94)
Total 16,491
Cash dividends (2,162) (2,162)
Purchase of treasury stock (7,119) (7,119)
Sales of treasury stock 307 (1,076) 1,383
Balance June 30, 1999 152,750 156,655 (9) 29,965 1,519 (35,380)
Balance at January 1, 1998 127,983 115,414 55 29,965 780 (18,231)
Comprehensive Income: Note 1
Net Income 14,110
Other Comprehensive Income 7
Total 14,117
Cash dividends (1,740) (1,740)
Purchase of treasury stock (9,488) (9,488)
Sales of treasury stock 991 414 577
Balance June 30, 1998 131,863 127,784 62 29,965 1,194 (27,142)
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
IRWIN FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
<CAPTION>
For the six months ended June 30, 1999 1998
(In thousands)
<S> <C> <C>
Net income $16,585 $14,110
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation and amortization 2,558 13,550
Provision for loan and lease losses 3,531 2,674
Amortization of premiums, less accretion of discounts 1,082 1,126
(Increase) decrease in loans held for sale 361,641 (115,520)
Gain on sale of mortgage servicing (22,340) (20,013)
Other, net 17,192 (13,060)
Net cash (used) provided by operating activities 380,249 (117,133)
Lending and investing activities:
Proceeds from maturities/calls of investment securities:
Held-to-Maturity 5,222 5,715
Available-for-Sale 190 3,792
Proceeds from sales of investment securities:
Available-for-Sale 1,000
Purchase of investment securities:
Held-to-Maturity (3,640)
Available-for-Sale (2,940) (4,091)
Net increase in trading assets (15,441) (12,623)
Net (increase) decrease in interest-bearing
deposits with financial institutions (10,003) 3,878
Net increase in loans, excluding sales (82,631) (264,254)
Sale of loans 22,928 207,940
Additions to mortgage servicing assets (69,884) (49,521)
Proceeds from sale of mortgage servicing assets 75,726 42,884
Other, net (2,448) 574
Net cash used by lending and investing activities (79,281) (68,346)
Financing activities:
Net increase (decrease) in deposits (101,108) 153,856
Net (decrease) increase in short-term borrowings (209,192) 70,565
Proceeds (repayment) of long-term debt (356) 2,620
Purchase of treasury stock (7,119) (9,488)
Proceeds from sale of stock for employee benefit plans 307 991
Dividends paid (2,162) (1,740)
Net cash provided by financing activities (319,630) 216,804
Net increase (decrease) in cash and cash equivalents (18,662) 31,325
Cash and cash equivalents at beginning of year 77,522 56,524
Cash and cash equivalents at end of year $58,860 $87,849
Supplemental disclosures of cash flow information:
Cash paid during the period:
Interest $26,227 $30,104
Income taxes $8,219 $6,103
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO THE FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The unaudited financial statements included herein have
been prepared by the Corporation pursuant to the rules and regulations of the
Securities and Exchange Commission but do not include all information and
footnotes required by generally accepted accounting principles. In the opinion
of management, the financial statements reflect all material adjustments
necessary for a fair presentation. The accompanying financial statements
should be read in conjunction with the financial statements and related notes
included with the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998.
Reclassifications: Certain amounts in the 1998 consolidated financial
statements have been reclassified to conform to the 1999 presentation.
Derivatives: On June 15, 1998, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
(FAS 133). The Corporation will adopt FAS 133 on January 1, 2001.
FAS 133 requires that all derivative instruments be recorded on the
balance sheet at their fair value. Changes in the fair value of
derivatives are recorded each period in current earnings or other
comprehensive income, depending on whether a derivative is designated
as part of a hedge transaction and, if it is, the type of hedge transaction.
The Corporation does not expect the adoption of this standard to have a
material effect on its financial position or results of operation.
Derivative instruments on the Corporation's balance sheet are classified
as trading assets and carried at market value. Changes in market value are
recorded as trading gains or losses on the income statement.
NOTE 2 - INVESTMENT SECURITIES
The carrying amounts of investment securities, including net unrealized losses
of $16 thousand and $142 thousand on available-for-sale securities at
June 30, 1999 and December 31, 1998, respectively, are summarized as follows:
<TABLE>
<CAPTION>
June 30, December 31,
(In thousands) 1999 1998
<S> <C> <C>
Held-to-Maturity
US Treasury and Government obligations $11,399 $32,158
Obligations of states and political subdivisions 4,707 5,207
Mortgage-backed securities 2,160 4,424
Total Held-to-Maturity 18,266 41,789
Available-for-Sale
US Treasury and Government obligations 22,512 2,096
Mortgage-backed securities 3,147 4,131
Other 576 39
Total Available for Sale 26,235 6,266
Total Investments $44,501 $48,055
</TABLE>
Securities which the Corporation has the positive intent and ability to hold
until maturity are classified as "held-to-maturity" and are stated at cost
adjusted for amortization of premium and accretion of discount. Securities
that might be sold prior to maturity are classified as "available-for-sale"
and are stated at fair value. Unrealized gains and losses on
available-for-sale securities, net of the future tax impact, are reported
as a separate component of shareholders' equity until realized.
NOTE 3 - LOANS HELD FOR SALE
Loans held for sale are stated at the lower of cost or market as of the
balance sheet date.
NOTE 4 - LOANS AND LEASES
<TABLE>
<CAPTION>
Loans and leases are summarized as follows:
June 30, December 31,
(In thousands) 1999 1998
<S> <C> <C>
Real estate-mortgage $116,414 $123,980
Commercial, financial and agricultural 367,550 278,834
Real estate-construction 84,426 97,253
Consumer 40,414 51,730
Lease financing 5,040 6,375
Unearned income (757) (1,181)
$613,087 $556,991
</TABLE>
NOTE 5 - ALLOWANCE FOR LOAN AND LEASE LOSSES
Changes in the allowance for loan and lease losses are summarized as follows:
<TABLE>
<CAPTION>
June 30, December 31,
(In thousands) 1999 1998
<S> <C> <C>
Balance at beginning of year $9,888 $8,812
Provision for loan and lease losses 3,531 5,995
Reduction due to sale of loans (2,902) (2,976)
Recoveries 331 559
Charge-offs (1,036) (2,502)
Balance at end of period $9,812 $9,888
</TABLE>
NOTE 6- SERVICING ASSETS
Included on the consolidated balance sheet at June 30, 1999 and December 31,
1998 are $134.9 million and $117.1 million, respectively, of servicing assets.
These amounts relate to the principal balances of loans serviced by the
Corporation for investors. Although they are not generally held for purposes
of sale, there is an active secondary market for servicing assets. The
Corporation has periodically sold servicing assets.
NOTE 7- SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
Short-term borrowings are summarized as follows:
June 30, December 31,
(In thousands) 1999 1998
<S> <C> <C>
Repurchase agreements and drafts payable related to
mortgage loan closings $99,336 $172,126
Lines of Credit 112,065 180,118
Federal funds 125,000 266,000
Commercial paper 25,464 26,617
Other 73,804 -
Total $435,669 $644,861
</TABLE>
Repurchase agreements at June 30, 1999 and December 31, 1998, include
$1.3 million and $29.8 million respectively, in mortgage loans sold under
agreements to repurchase which are used to fund mortgage loans
sold prior to sale in the secondary market. These repurchase agreements
are collateralized by mortgage loans held for sale.
Drafts payable related to mortgage loan closings totaled $98.0 million and
$142.3 million at June 30, 1999 and December 31, 1998. These borrowings
are related to mortgage closings at the end of the period which have not
been presented to banks for payment. When presented for payment these
borrowings will be funded internally or by borrowing from the lines of
credit.
The Corporation has lines of credit available to fund mortgage loans
held for sale. Interest on the lines of credit is payable monthly at
variable rates ranging from 4.82% to the lender's prime rate.
NOTE 8 -- LONG-TERM DEBT
Long-term debt at June 30, 1999 of $2.5 million consists of a note payable
with a variable interest rate averaging 7.4% and maturing on July 1, 2002.
Long-term debt as of December 31, 1998 of $2.8 million consisted of a note
payable with a variable interest rate averaging 7.94% and maturing on
July 1, 2002.
NOTE 9 -- COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES
OF SUBSIDIARY TRUST
In January 1997, the Corporation issued $50 million of trust preferred
securities through IFC Capital Trust I, a trust created and controlled
by the Corporation. The securities were issued at $25 per share with a
cumulative dividend rate of 9.25%, payable quarterly. They have an initial
maturity of 30 years with a 19-year extension option. The securities are
callable at par after five years, or immediately, in the event of an
adverse tax development affecting the Corporation's classification of the
securities for federal income tax purposes. They are not convertible into
common stock of the Corporation. The securities are shown on the
balance sheet net of capitalized issuance costs.
The sole assets of IFC Capital Trust I are subordinated debentures of the
Corporation with a principal balance of $51.5 million, an interest rate
of 9.25% and an initial maturity of 30 years with a 19-year extension option.
NOTE 10 -- EARNINGS PER SHARE
<TABLE>
Earnings per share calculations are summarized as follows:
<CAPTION>
Basic Earnings Effects of Diluted Earnings
Per Share Stock Options Per Share
Three months ended June 30, 1999
<S> <C> <C> <C>
Net income available to common shareholders $7,613 $-- $7,613
Shares 21,547 339 21,886
Per-Share Amount available to common shareholders $0.35 $0.00 $0.35
Six months ended June 30, 1999
Net income available to common shareholders $16,585 $-- $16,585
Shares 21,547 348 21,895
Per-Share Amount available to common shareholders $0.77 $0.01 $0.76
</TABLE>
<TABLE>
<CAPTION>
Basic Earnings Effects of Diluted Earnings
Per Share Stock Options Per Share
Three months ended June 30, 1998
<S> <C> <C> <C>
Net income available to common shareholders $7,046 $-- $7,046
Shares 21,738 246 21,984
Per-Share Amount available to common shareholders $0.32 $0.00 $0.32
Six months ended June 30, 1998
Net income available to common shareholders $14,110 $-- $14,110
Shares 21,800 329 22,129
Per-Share Amount available to common shareholders $0.65 ($0.01) $0.64
</TABLE>
NOTE 11 -- CONTINGENCIES
In the normal course of business, Irwin Financial Corporation and its
subsidiaries are subject to various claims and other pending and possible
legal actions.
As of June 30, 1999, Irwin Mortgage Corporation (IMC) was a defendant
in two separate class action lawsuits relating to the following:
IMC's administration of mortgage escrow accounts and IMC's right to pay
broker fees to mortgage brokers.
As of June 30, 1999, Irwin Union Leasing, (formerly Affiliated Capital Corp.
(ACC)), and Irwin Financial Corporation were defendants in a class action
lawsuit alleging misrepresentations by a manufacturer of certain equipment
financed by ACC.
At present, it is not possible for the Corporation to predict the likelihood
of an unfavorable outcome or to establish the possible extent or amount of
liability or potential exposure with respect to the litigation.
NOTE 12 -- Industry Segment Information
The Corporation has three principal segments that provide a broad range of
financial services throughout the United States. The Mortgage Banking line
of business originates, sells and services residential first mortgage loans.
The Commercial Banking line of business provides commercial banking services.
The Home Equity Lending line of business originates and services home equity
loans via direct mail and telemarketing. The Corporation's other segments
include equipment leasing and the parent company.
The accounting policies of each segment are the same as those decribed in the
"Summary of Significant Accounting Policies. " Below is a summary of each
segment's revenues, net income, and assets for 1999 and 1998:
<TABLE>
<CAPTION>
Mortgage Commercial Home Equity
(In thousands) Banking Banking Lending Other Consolidated
For the three months ended June 30, 1999
<S> <C> <C> <C> <C> <C>
Net interest income $5,205 $6,248 $4,712 ($713) $15,452
Intersegment interest ($1,430) $806 ($339) $963 0
Other revenue 44,510 2,949 6,853 (793) 53,519
Intersegment revenues 0 42 607 (649) 0
Total net revenues 48,285 10,045 11,833 (1,192) 68,971
Other expense 38,102 6,170 8,067 2,484 54,823
Intersegment expenses 685 906 466 (2,057) 0
Net income before taxes 9,498 2,969 3,300 (1,619) 14,148
Income taxes 3,876 1,118 0 367 5,361
Net income 5,622 1,851 3,300 (1,986) 8,787
Distribution on Preferred Securities 0 0 0 1,174 1,174
Net income available to shareholders $5,622 $1,851 $3,300 ($3,160) $7,613
Assets at June 30, 1999 $736,851 $656,443 $283,455 ($55,876) $1,620,873
For the three months ended June 30, 1998
Net interest income $13,024 $765 ($315) $2,160 $15,634
Intersegment interest (6,306) 4,822 1,805 (321) 0
Other revenue 43,035 2,673 4,102 293 50,103
Intersegment revenues 0 32 182 (214) 0
Total net revenues 49,753 8,292 5,774 1,918 65,737
Other expense 36,577 5,444 7,890 2,978 52,889
Intersegment expenses 463 419 26 (908) 0
Net income before taxes 12,713 2,429 (2,142) (152) 12,848
Income taxes 5,148 919 0 (1,439) 4,628
Net income 7,565 1,510 (2,142) 1,287 8,220
Distribution on Preferred Securities 0 0 0 1,174 1,174
Net income available to shareholders 7,565 1,510 (2,142) 113 7,046
Assets at June 30, 1998 $748,620 $581,583 $178,245 $220,022 $1,728,470
</TABLE>
<TABLE>
<CAPTION>
Mortgage Commercial Home Equity
(In thousands) Banking Banking Lending Other Consolidated
For the six months ended June 30, 1999
<S> <C> <C> <C> <C> <C>
Net interest income $12,416 $11,487 $3,938 $4,336 $32,177
Intersegment interest (3,402) 2,191 5,396 (4,185) 0
Other revenue 88,533 6,049 12,373 1,211 108,166
Intersegment revenues 0 84 1,171 (1,255) 0
Total net revenues 97,547 19,811 22,878 107 140,343
Other expense 76,699 12,422 15,943 4,870 109,934
Intersegment expenses 1,319 1,735 603 (3,657) 0
Net income before taxes 19,529 5,654 6,332 (1,106) 30,409
Income taxes 7,959 2,138 0 1,378 11,475
Net income 11,570 3,516 6,332 (2,484) 18,934
Distribution on Preferred Securities 0 0 0 2,349 2,349
Net income available to shareholders $11,570 $3,516 $6,332 ($4,833) $16,585
Assets at June 30, 1999 $736,851 $656,443 $283,455 ($55,876) $1,620,873
For the six months ended June 30, 1998
Net interest income $16,234 $7,004 $818 $4,068 $28,124
Intersegment interest (5,150) 4,018 1,153 (21) 0
Other revenue 82,730 5,415 12,354 (561) 99,938
Intersegment revenues 0 67 (773) 706 0
Total net revenues 93,814 16,504 13,552 4,192 128,062
Other expense 70,639 10,811 14,846 5,800 102,096
Intersegment expenses 915 790 52 (1,757) 0
Net income before taxes 22,260 4,903 (1,346) 149 25,966
Income taxes 9,043 1,847 0 (1,383) 9,507
Net income 13,217 3,056 (1,346) 1,532 16,459
Distribution on Preferred Securities 0 0 0 2,349 2,349
Net income available to shareholders 13,217 3,056 (1,346) (817) 14,110
Assets at June 30, 1998 $748,620 $581,583 $178,245 $220,022 $1,728,470
</TABLE>
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis should be read in
conjunction with the accompanying consolidated financial
statements and footnotes. Forward-looking statements contained
in the following discussion are based on estimates and
assumptions that are subject to significant business, economic
and competitive uncertainties, many of which are beyond the
Corporation's control and are subject to change. These
uncertainties can affect actual results and could cause actual
results to differ materially from those expressed in any forward-
looking statements in this discussion.
Overview
Net income for the second quarter ended June 30, 1999, was
$7.6 million, up 8.0% from the second quarter 1998 net income of
$7.0 million. Net income per share (diluted) was $0.35 for the
second quarter of 1999 as compared to $0.32 for the same period
in 1998. Return on equity for the second quarter of 1999 was
19.90% compared to 21.69% in 1998.
For the year to date, the Corporation recorded net income
of $16.6 million, up 17.5% from 1998. Net income per share
(diluted) was $0.76, up from $0.64 a year earlier. Return on
equity for the year to date was 22.06% as compared to 21.86% for
the same period in 1998.
Lines of Business
Irwin Financial Corporation has three principal lines of
business:
Mortgage banking (includes Irwin Mortgage Corporation and
the related activities of Irwin Union Bank)
Commercial banking (Irwin Union Bank)
Home equity lending (includes Irwin Home Equity and the
related activities of Irwin Union Bank)
Listed below are the earnings by line of business for the
quarter and year to date, as compared to the same periods in
1998:
Three Months Six Months
Ended June 30, Ended June 30,
(In thousands) 1999 1998 1999 1998
Mortgage banking $5,622 $7,565 $11,570 $13,217
Commercial banking 1,851 1,510 3,516 3,056
Home equity lending 3,300 (2,142) 6,332 (1,346)
Parent (including
consolidating entries) (3,160) 113 (4,833) (817)
$7,613 $7,046 $16,585 $14,110
Mortgage Banking
Selected Financial Data (shown in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Selected Income Statement
Data:
Loan origination fees $12,441 $13,890 $25,655 $26,734
Gain from sales of loans 11,361 12,965 26,099 23,481
Loan servicing fees 14,226 12,438 28,294 25,178
Amortization and impairment
of servicing assets (3,989) (7,685) (4,657) (14,425)
Trading gains (losses) (791) 1,029 (10,772) 1,029
Net interest income 5,504 6,827 11,203 11,475
Provision for loan losses (1,729) (109) (2,189) (390)
Gain on sale of servicing 10,214 10,057 22,340 20,013
Other income 1,048 341 1,573 719
Total net revenues 48,285 49,753 97,546 93,814
Salaries and employee 23,236 23,601 47,256 45,075
benefits
Other operating expenses 15,551 13,439 30,761 26,479
Income before tax 9,498 12,713 19,529 22,260
Income tax 3,876 5,148 7,959 9,043
Net income $5,622 $7,565 $11,570 $13,217
Return on average equity 20.60% 36.10% 21.10% 31.50%
Mortgage loan originations $1,609,898 $2,052,999 $3,386,794 $4,049,659
Selected Operating Data: June 30, December 31,
1999 1998
Servicing portfolio $10,714,259 $11,242,470
Mortgage loans held for sale 396,135 555,197
Mortgage servicing asset 129,584 113,131
Mortgage banking activities are conducted by Irwin Mortgage
Corporation which originates, sells, and services residential
mortgage loans throughout the United States.
Net income for the second quarter was $5.6 million, down
25.7% from the same period in 1998. Year to date, net income was
$11.6 million compared to $13.2 million in 1998.
As a result of a rising interest rate environment, mortgage
loan originations of $1.6 billion were 21.6% below the second
quarter of 1998. For the year, originations totaled $3.4
billion, down 16.4% from 1998. Refinances accounted for 26.5% of
loan production in the second quarter of 1999 and 37.8% year to
date. This compares to 39.1% and 47.0%, respectively, in 1998.
Lower production volume caused mortgage loan origination income
to decrease 10.4% in the second quarter to $12.4 million. Year to
date it was down 4.0% to $25.7 million.
As a result of lower loan production in the second quarter
of 1998, gains on the sale of loans decreased 12.4% to $11.4
million. Year to date, gains on the sale of loans totaled $26.1
million, up 11.1% from 1998.
Mortgage servicing fees increased 14.4% in the second
quarter and 12.4% year to date to $14.2 million and $28.3
million, respectively. The increase was due to a higher
percentage of the servicing portfolio being government loans
which earn a greater servicing fee. The servicing portfolio
totaled $10.7 billion at June 30, 1999, down 2.0% from a year
earlier and down 4.7% from December 31, 1998.
Mortgage servicing assets totaled $129.6 million at June
30, 1999, up 14.5% from December 31, 1998. The amortization and
impairment of servicing assets declined 48.1% in the second
quarter of 1999 to $4.0 million. Year to date amortization and
impairment totaled $4.7 million, down 67.7% from 1998. The
decline is the result of the rising interest rate environment
during the second quarter of 1999 that slowed prepayments in
underlying loans and reduced impairment levels of mortgage
servicing assets.
The improvement in mortgage servicing asset amortization
and impairment was partially offset by losses on hedging
activities. The mortgage bank uses options on treasury futures
to offset the interest rate risk associated with its mortgage
servicing assets. At June 30, 1999, these options were recorded
at their market value of $35.9 thousand, reflecting a market loss
of $0.8 million during the second quarter of 1999 and $10.8
million year to date. This compares with a market gain recorded
on the hedge position of $1.0 million in the second quarter and
year to date 1998. The mortgage bank currently does not attempt
to satisfy the criteria for "hedge accounting." As a result,
options are accounted for as trading assets, and changes in fair
value are adjusted through earnings as trading gains or losses.
Revenues from the sale of mortgage servicing were up 1.6%
from the second quarter of 1998 to $10.2 million. Year to date
servicing sale revenues totaled $22.3 million, up 11.6% from
1998.
As a result of the decrease in mortgage loan closings from
1998, net interest income was down in the second quarter and year
to date. Net interest income for the three months ended June 30,
1999 was $5.5 million, down 19.4% from the second quarter 1998.
Year to date, net interest income totaled $11.2 million, down
2.4% from 1998.
The provision for loan losses totaled $1.7 million in the
second quarter of 1999, up from $0.1 million a year earlier.
Year to date, the provision totaled $2.2 million compared with
$0.4 million in 1998. The increased provision reflects an
increase in nonperforming assets at the mortgage bank in recent
periods and the sale of certain distressed assets. See further
discussion of this subject in the section on credit risk.
Salaries and employee benefits decreased 1.5% to $23.2
million for the second quarter of 1999. The reduction was due to
the decline in loan production in the second quarter of 1999.
Year to date, they totaled $47.3 million, up 4.8% from a year
earlier. Other operating expenses increased 15.7% and 16.2% for
the quarter and year to date, respectively.
Commercial Banking
Selected Financial Data (shown in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Selected Income Statement
Data:
Net interest revenue $7,605 $6,068 $14,680 $12,072
Provision for loan losses (550) (480) (1,002) (1,050)
Other income 2,990 2,704 6,132 5,482
Operating expenses (7,075) (5,863) (14,156) (11,601)
Income before taxes 2,970 2,429 5,654 4,903
Income taxes (1,119) (919) (2,138) (1,847)
Net income $1,851 $1,510 $3,516 $3,056
Return on average equity 14.50% 14.88% 14.27% 15.40%
June 30, December 31,
Selected Balance Sheet 1999 1998
Data:
Securities and short-term
investments $29,194 $62,411
Loans 586,728 514,950
Allowance for loan losses 7,168 6,680
Deposits $574,202 $567,526
Commercial banking activities are conducted by Irwin Union
Bank through locations in nine counties in Indiana as well as
offices in St. Louis, Missouri and Kalamazoo, Michigan. Net
income was up in the second quarter to $1.9 million from $1.5
million a year earlier. Year to date, net income was $3.5
million, up from $3.1 million in 1998.
Net interest income improved 25.3% to $7.6 million in the
second quarter of 1999. Year to date, it was up 21.6% to $14.7
million. The increase reflects the commercial bank's continued
growth in new markets. The provision for loan losses increased
14.6% to $550.0 thousand in the second quarter compared with a
provision of $480.0 thousand a year earlier. However, year to
date, it decreased 4.6% to $1.0 million.
Following is an analysis of net interest income and net
interest margin computed on a tax equivalent basis:
For the Three Months
Ended June 30, 1999 1998
Average Yield/ Average Yield/
(In thousands) Balance Interest Rate Balance Interest Rate
Interest -
Earning assets $616,675 $13,005 8.46% $526,967 $11,415 8.69%
Interest -
Bearing liabilities 533,817 5,331 4.01% $412,975 5,305 5.15%
Net interest income * $7,674 * * $6,110 *
Net interest margin * * 4.99% * * 4.65%
For the Six Months
Ended June 30, 1999 1998
Average Yield/ Average Yield/
(In thousands) Balance Interest Rate Balance Interest Rate
Interest -
Earning assets $597,625 $25,036 8.45% $520,580 $22,539 8.73%
Interest -
Bearing liabilities 512,041 10,228 4.03% 407,505 10,350 5.12%
Net interest income * $14,808 * * $12,189 *
Net interest margin * * 5.00% * * 4.72%
Other income in the second quarter was up 10.6% to $3.0
million from $2.7 million in 1998. For the year to date, other
income increased 11.9% to $6.1 million. Operating expenses
increased 20.7% from the second quarter of 1998 to $7.1 million.
For the year, these expenses were up 22.0% to $14.2 million. The
continued expansion of operations in new markets led to the
increases in both other income and operating expenses.
Home Equity Lending
Selected Financial Data (shown in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Selected Income Statement
Data:
Net interest revenue $4,377 $1,490 $9,334 $1,971
Gain from sale of loans 5,645 5,578 10,508 10,759
Loan servicing fees, net of
amortization of servicing 891 611 1,543 1,239
assets
Trading gains (losses) 152 (2,001) 387 (636)
Other revenue 768 96 1,106 218
Total net revenues 11,833 5,774 22,878 13,551
Operating expenses 8,533 7,916 16,546 14,897
Pre-tax income (loss) $3,300 $(2,142) $6,332 $(1,346)
Other Selected Financial Data: June 30, December
31,
1999 1998
Home equity loans (in
portfolio and held for sale) $185,237 $247,445
Interest-only strips 46,644 26,761
Servicing portfolio 685,003 581,241
The home equity lending business markets home equity loans
through direct mail and telemarketing in 30 states. The home
equity lending business recorded pre-tax income of $3.3 million
during the second quarter of 1999 and $6.3 million year to date.
These results are compared to 1998 quarterly and year to date pre-
tax losses of $2.1 million and $1.3 million, respectively.
Net interest revenue was $2.9 million higher in the second
quarter of 1999 than 1998, and $7.4 million higher year to date.
The increase was due to increased loans outstanding during 1999.
During the second quarter of 1999, the home equity lending
business originated $99.2 million of loans, compared with $99.6
million in 1998. Year to date, loan originations totaled $194.2
million, up from $154.8 million a year earlier. Gains from the
securitization of loans totaled $5.6 million in the second
quarter of 1999 and $10.5 million year to date, up 1.2% and down
2.3%, respectively.
The home equity lending business services the loans it has
securitized and collects an annual fee equal to 1% of the
outstanding principal balance of the securitized loans. Net
servicing fee income totaled $0.9 million in the second quarter
of 1999, up 45.8% from the same period in 1998. Year to date,
servicing fees totaled $1.5 million, up 24.5% from 1998. The
increase is due to growth in the servicing portfolio combined
with a decline in the prepayments of underlying loans and
resulting impairment of servicing assets caused by the rising
interest rate environment.
Interest-only strips are carried at their market values
determined using assumptions about the duration and performance
of the securitized loans. At June 30, 1999, the assumed annual
loss rates ranged from 0.25% to 2.00%, prepayment speeds ranged
from 8% to 41% CPR (constant prepayment rate) per year, and the
discount rate was 15.0%. To mitigate the interest rate risk
associated with interest-only strips, the home equity lending
business uses interest rate caps which are also carried at their
market values.
Included in income during the second quarter of 1999 was an
unrealized trading gain of $0.2 million recorded to adjust the
carrying value of interest-only strips and interest rate caps to
their market values. This gain compares with a $2.0 million loss
recorded in the second quarter of 1998. Year to date, trading
gains totaled $0.4 million, compared with a $0.6 million trading
loss in 1998. The improvement in 1999 is due to the rising
interest rate environment combined with efforts made to shift a
substantial portion of the home equity loan portfolio into
product with less prepayment sensitivity.
Operating expenses were $8.5 million in the second quarter
of 1999, up 7.8% from 1998. Year to date, they increased 11.1%
to $16.5 million.
Parent Company (Including Consolidating Entries)
For the quarter ended June 30, 1999, the parent company
recorded a net loss of $3.2 million compared with net income of
$0.1 million a year earlier. Year to date, the parent company's
net loss totaled $4.8 million compared with net loss of $0.8
million in 1998. The parent company records the income tax
expense or benefit generated at the home equity business until
such time that all net operating losses carried forward are fully
used. In the second quarter and year to date 1999, the parent
recorded $1.3 million and $2.5 million, respectively, of income
tax expense related to this line of business. This compares with
$0.9 million and $0.5 million of income tax benefits recorded in
the second quarter and year to date, respectively, in 1998.
Consolidated Income Statement Analysis
Net interest income for the second quarter of 1999 totaled
$17.8 million, up 6.5% from the second quarter of 1998. For the
year, it increased 15.9% to $35.7 million. The increase was
primarily the result of the increased loans outstanding at the
community bank and home equity business which offset declines at
the mortgage bank resulting from the rising interest rate
environment.
The loan and lease loss provision was $2.3 million for the
second quarter of 1999, as compared with $1.1 million for the
same period in 1998. For the year, it totaled $3.5 million, up
from $2.7 million a year earlier. See the section on credit
risk for additional information on this subject.
Noninterest income was up 6.8% to $53.5 million in the
second quarter of 1999. Year to date noninterest income
increased 8.2% to $108.2 million. This increase was driven by
improvements in loan servicing fee income of $2.3 million or
17.0% for the quarter and $3.9 million or 14.1% year to date.
Additionally, the amortization and impairment of servicing assets
improved $3.4 million or 42.5% for the quarter and $9.3 million
or 62.3% year to date as a result of the rising interest rate
environment and resultant decrease in loan prepayment activity.
These improvements were partially offset by declines in gains on
trading assets, the majority of which related to options at the
mortgage bank that are used to offset fluctuations in the value
of mortgage servicing assets. Trading losses totaled $0.6
million in the second quarter of 1999 compared with $1.0 million
in 1998. Year to date, trading losses totaled $10.4 million
compared with trading gains of $0.4 million a year earlier. Also
offsetting the aforementioned improvements were declines in loan
origination fees as a result of decreased mortgage production
activity. Loan origination fees declined $1.4 million or 10.2%
during the second quarter of 1999 and $1.0 million or 3.6% year
to date.
Other expenses increased moderately in the second quarter
of 1999, up $1.9 million or 3.7% from 1998. For the year, other
expenses increased $7.8 million or 7.7%.
The effective income tax rate for the Corporation was 41.3%
in the second quarter of 1999 and 40.9% year to date. This is
compared with 39.6% in the second quarter of 1998 and 40.3% year
to date 1998.
Consolidated Balance Sheet Analysis
Total assets of the Corporation at June 30, 1999, were $1.6
billion, down from December 31, 1998 total assets of $1.9
billion. The decrease was due to a decline in loans held for
sale which totaled $0.6 billion at June 30, 1999, down from $0.9
billion at December 31, 1998. The decrease in assets was
accompanied by a decrease in deposits of $0.1 billion and a
decrease in short-term borrowings of $0.2 billion. A portion of
noninterest bearing deposits is associated with escrow accounts
held on loans in the servicing portfolio of Irwin Mortgage.
These escrow accounts totaled $354.8 million at June 30, 1999,
down from $399.6 million at December 31, 1998.
Shareholders' equity grew to $152.8 million or $7.09 per
share, an increase over the $145.2 million or $6.70 per share at
the end of 1998. The Corporation's equity to assets ratio ended
the quarter at 9.42% compared to 7.46% at the end of 1998.
Prior to the adoption of new mortgage banking accounting
standards in the second quarter of 1995, authoritative accounting
guidance precluded recognition of the full value of mortgage
servicing assets to be reflected on the balance sheet. Since a
significant portion of the Corporation's mortgage servicing
portfolio was generated prior to the adoption of the new
accounting standards, it represents substantial economic value
which is not recorded on the balance sheet. Management estimated
this value to be approximately $56.6 million or $2.63 per share
at June 30, 1999. The estimate was based on the market value of
servicing assets related to loans with similar interest rates and
servicing fees. With the implementation of the new accounting
standard in 1995, this off-balance sheet value will decline over
future years and eventually be reduced to zero as the underlying
loans pay off.
Credit Risk
The assumption of credit risk is a key source of earnings
for the commercial banking and home equity lending businesses.
In addition, the mortgage banking business assumes some credit
risk despite the fact that the mortgages are typically insured.
An allowance for loan losses is established as an estimate
of the probable credit losses on the loans held by the
Corporation. It is based on management's judgement combined with
a quantitative process of evaluation and analysis. A specific
allowance is determined by evaluating those loans which are
either substandard or have the potential to become substandard.
In general, commercial loans and mortgage loans are evaluated
individually to determine the appropriate allowance. Consumer
loans are evaluated as a group. A specific allowance is set at a
level which management considers sufficient to cover probable
losses on these specific loans. A general allowance is
determined by analyzing historical loss experience by loan type
and then adjusting these loss factors for current conditions not
reflected in prior experience.
Loans that are determined by management to be uncollectible
are charged against the allowance. The allowance is increased by
provisions against income and recoveries of loans previously
charged off.
As of June 30, 1999, the allowance for loan and lease
losses as a percentage of total loans and leases was 1.60%
compared to 1.78% at December 31, 1998. For the three months
ended June 30, 1999, the provision for loan and lease losses
totaled $2.3 million, a 120.7% increase from the amount recorded
in the second quarter of 1998. Year to date, the provision
totaled $3.5 million, up 32.1% from a year earlier. The increase
occurred primarily at the mortgage bank in connection with
nonperforming loans on its balance sheet. See further discussion
of this matter below. Net charge-offs for the quarter were $0.3
million as compared to $0.6 million in 1998. Year to date net
charge-offs totaled $0.7 million, down from $1.1 million a year
earlier.
Nonperforming assets (loans 90 days past due, nonaccrual,
and owned real estate) were $9.6 million or 0.59% of total assets
at June 30, 1999, down from $15.4 million or 0.79% at December
31, 1998 and $9.5 million or 0.64% at December 31, 1997. The
decline resulted from the sale of nonperforming mortgage loans
during the second quarter of 1999.
Although most mortgages are either government-insured or
conform to the underwriting guidelines of the government-
sponsored agencies that support the secondary mortgage market,
the mortgage bank has credit risk on those loans that are not
eligible for government insurance or that must be repurchased
from agencies or other investors due to lack of conformity to
underwriting guidelines. In recent years, the government-
sponsored agencies that provide credit enhancement on the loans
underwritten by the mortgage bank have become more stringent in
their adherence to their right to seek recourse from the
originator of loans. In addition, during periods of high
origination volume, due to delays in gathering required
documentation for submission to the insuring agencies, the
mortgage bank experiences an increase in the number of new loans
that do not qualify for insurance prior to the borrower's first
30-day delinquency. As such, the mortgage bank has had an
increase in the number of loans it has repurchased from or been
unable to submit to the agencies and other investors. This has
resulted in an increase in the nonperforming loans and other real
estate owned at the mortgage bank. The mortgage bank seeks to
cure the underwriting defect in these loans and resell them to
the agencies or sell them to alternative investors.
Nonperforming Assets June 30, December 31, December 31,
(In Thousands) 1999 1998 1997
Accruing loans past
due 90 days or more:
Real Estate $- $291 $534
Commercial 132 252 382
Consumer 242 86 86
Subtotal 374 632 1,002
Nonaccrual loans:
Real Estate 6,585 9,570 5,333
Commercial 840 1,052 777
Leasing 116 426 506
Consumer 111 174 63
Subtotal 7,652 11,222 6,679
Total nonperforming loans 8,026 11,854 7,681
Other real estate 1,564 3,506 1,828
owned
Total nonperforming
assets $9,590 $15,360 $9,509
Nonperforming assets
to total assest 0.59% 0.79% 0.64%
Liquidity
Liquidity is the availability of funds to meet the daily
requirements of the business. For financial institutions, demand
for funds comes principally from extensions of credit and
withdrawal of deposits. Liquidity is provided by asset
maturities, sales of investment securities, or short-term
borrowings. Seasonal fluctuations in deposit levels and loan
demand require differing levels of liquidity at various times
during the year. Liquidity measures are formally reviewed by
management monthly, and they continue to show adequate liquidity
in all areas of the organization.
Interest Rate Risk
Interest rate risk refers to the potential for changes in
market rates of interest to cause changes in net interest income
and in the market value of assets and liabilities.
The Asset-Liability Management Committee of the commercial
bank monitors the repricing structure of both assets and
liabilities over various time horizons. Exposure to changes in
interest rates is evaluated by modeling the repricing
characteristics of the commercial bank's portfolio under multiple
rate scenarios. Rate sensitivity at the commercial bank can
typically be managed by controlling the maturity of loans,
securities, and deposits. The commercial bank may also use
financial futures or interest rate swaps from time to time.
Formal policies approved by the commercial bank's Board of
Directors ensure that exposure to changes in net interest
revenues is maintained within acceptable levels.
The mortgage banking business assumes a form of interest
rate risk by entering into commitments to extend loans to
borrowers at a fixed price for a limited period of time. Loans
are also held temporarily until a pool is formed. The mortgage
bank buys commitments to deliver loans at a fixed price to manage
risk. The policy at the home equity lending business is to match-
fund all loan assets. The mortgage bank and the home equity
business are also exposed to interest rate risk through their
ownership of servicing assets and other retained interests
resulting from securitization. The companies manage their risk
using a variety of techniques including: maintaining a strong
production operation which offsets the interest rate risk,
selective sales of servicing rights, and the use of financial
hedges. In some cases, the Corporation uses internal hedges to
allow for risk characteristics of one line of business to offset
those of another line.
Through the use of simulations using regression modeling,
option-adjusted valuation techniques for estimating expected
customer behavior, and Monte-Carlo based cash flow simulation,
the Corporation attempts to analyze and mitigate total interest
rate risk, that associated with both net interest income and non-
interest income. For example, if interest rates decline,
management expects an increase in mortgage loan origination
income and a decline in the value of mortgage servicing assets.
Management attempts to monitor this exposure to traditional
interest rate risk as well as interest rate influences on
production and servicing value in a comprehensive manner.
The following table shows management's estimate of the
present value of interest-sensitive assets and liabilities, as
well as off-balance sheet financial contracts as of June 30,
1999, at then current interest rates as well as simulated rates
1.0% and 2.0% above and below those interest rates. It does not
take into account the book values of the Corporation's non-
interest sensitive assets and liabilities, such as cash, accounts
receivable, and fixed assets, the value of which is not directly
determined by interest rates, nor does it address the market
value of certain off balance sheet interests not recognized under
GAAP (e.g., principally mortgage servicing rights acquired prior
to the adoption of FAS 122 in 1995) or attempt to make any
estimate of the value changes resulting from increases or
decreases in production fees as interest rates change.
As noted above, the analysis is based on discounted cash
flows over the remaining estimated lives of the financial
instruments. The total measurement of the Corporation's exposure
to interest rate risk as presented in the following table may not
be representative of the actual values which might result from a
higher or lower rate environment. Such environments would likely
result in different lending and borrowing strategies by the
Corporation, designed in part to further mitigate the effect on
the value of, and the net earnings generated from the
Corporation's net assets from any change in interest rates.
The figures suggest, based on balance sheet and off balance
sheet financial assets, that the present value of the
Corporation's interest-sensitive assets and liabilities would
decline in a falling rate environment and increase in a rising
rate environment. The magnitude and direction of the present
value rate sensitivity is largely unchanged from year-end 1998.
The Corporation's book value of servicing assets was capped below
estimated market value as of June 30, 1999, due to the accounting
principle which requires servicing assets to be carried at the
lower of their cost or market value. The following table shows
these assets uncapped (i.e. at estimated market value rather than
book value.)
As previously noted, this present value sensitivity
analysis does not account for potential earnings the Corporation
would recognize due to strategic initiatives it would undertake
if the interest rate scenarios modeled occurred, nor does it
reflect value from activities not traditionally measured in terms
of financial assets or liabilities. Principal among these
activities for the Corporation would be the change in mortgage
loan production and the earnings stream the Corporation derives
therefrom.
PRESENT
VALUE
($000)
AT JUNE 30,
1999
-2% -1% CURRENT +1% +2%
Interest Sensitive
Assets
Interest-bearing 26,341 26,338 26,335 26,332 26,330
deposits with banks
Federal Funds Sold (57,334) (57,341) (57,347) (57,353) (57,360)
Taxable investment 107,190 108,607 110,855 113,495 116,164
securities
Tax - exempt 4,967 4,774 4,591 4,416 4,249
investment securities
Mortgages held for 410,042 407,619 405,114 402,506 399,773
sale
Mortgage Servicing 117,035 158,115 191,922 214,335 228,254
Rights
Loans, net of 676,367 667,873 659,309 650,751 642,115
unearned discount
Total Interest
Sensitive Assets 1,284,608 1,315,985 1,340,779 1,354,482 1,359,525
Interest Sensitive
Liabilities
Non-Interest Bearing 390,608 390,448 390,299 390,160 390,031
Deposits
Money Market Checking 116,029 115,937 115,845 115,754 115,663
Money Market Savings 6,379 6,374 6,369 6,364 6,359
Regular Savings 113,912 113,822 113,732 113,642 113,553
Time Deposits 287,476 285,279 283,137 281,059 279,050
Short term borrowings 244,433 244,465 244,498 244,530 244,561
Long Term Debt 63,451 59,029 55,654 53,070 51,056
Total Interest
Sensitive Liabilities 1,222,288 1,215,354 1,209,534 1,204,579 1,200,273
Interest Sensitive
Off Balance Sheet 7,314 625 697 977 1,330
Items
Net Sensitivity as of $69,634 $101,256 $131,942 $150,880 $160,582
June 30, 1999
Potential Change ($62,308) ($30,686) $- $18,938 $28,640
Net Sensitivity as of $50,666 $78,781 $103,290 $126,155 $140,238
December 31, 1998
Potential Change ($52,624) ($24,509) $- $22,865 $36,948
Derivative Financial Instruments
The Corporation hedges its interest rate risk on mortgage
loans held for sale using mandatory commitments to sell the loans
at a future date. The economic value of mortgage servicing
assets is hedged using options on treasury futures. At June 30,
1999, these options had a fair value of $35.9 thousand and a net
notional amount (which does not represent the amount at risk) of
$337.5 million. Interest-only strips are hedged using interest
rate caps that had a fair value of $661.2 thousand at June 30,
1999, and a notional amount of $57.3 million. Options on
treasury futures and interest rate caps are classified as trading
assets on the balance sheet and carried at their market values.
Adjustments to market values are recorded as net trading gains or
losses on the income statement. The Corporation recorded $0.3
million of trading losses related to these derivative products in
the second quarter of 1999 and $10.3 million year to date. This
compares with a $1.0 million trading gain recorded in the second
quarter and year to date 1998.
Capital Adequacy
The Corporation is subject to various regulatory capital
requirements administered by federal banking agencies.
Quantitative measures established by regulation to ensure capital
adequacy require the Corporation to maintain minimum amounts and
ratios (set forth in the table below) of total and Tier I capital
(as defined in the regulations) to risk-weighted assets (as
defined), and of Tier I capital to average assets (as defined).
Equity and risk-based capital ratios for the Corporation are as
follows:
Ratio
required to June December December
be considered 30, 31, 31,
well- 1999 1998 1997
capitalized
Equity to Assets n/a 9.42% 7.46% 8.55%
Risk-Based Capital 10.0% 12.70% 12.25% 14.85%
Tier I Capital 6.0% 12.11% 11.63% 13.56%
Tier I Leverage 5.0% 12.34% 10.51% 12.06%
Year 2000 Readiness
Beginning in 1997, the Corporation developed a seven-stage
project plan to achieve effective Year 2000 readiness by June 30,
1999, that included: (i) an awareness campaign throughout the
Corporation to raise the level of importance and attention beyond
that of a typical "information technology" issue; (ii) assessment
of the Corporation's Year 2000 problem, including contract
review, a technical audit and an estimation of remediation costs;
(iii) remediation of non-compliant systems through repairs,
upgrades or replacements of computer programs and chips; (iv)
testing of the Corporation's systems for Year 2000 compliance;
(v) development of contingency plans to continue processes in the
event of Year 2000 readiness failure by the Corporation or
parties on whom it is dependent; (vi) implementation of the
remediated systems; and (vii) auditing after January 1, 2000, of
the completed processes for post-year 2000 compliance. The
Corporation has engaged a leading technology-consulting firm to
increase its level of confidence that the methods and standards
it employs to address the Year 2000 issue are appropriate and
comprehensive. The entire project is overseen by a Year 2000
Steering Committee which includes the Corporation's Chairman,
President, and those in charge of Information Technology (IT) at
each entity.
As of June 30, 1999, the Corporation has substantially completed
phases (i) through (vi).
Scope
The Corporation has developed a technology strategy that
primarily uses systems developed by third parties and has very
few internally developed applications. Consequently, the
Corporation's principal focus has been on assuring Year 2000
compliance from its commercial application vendors and other
third-party service providers. The project plan has addressed
computer hardware and software as well as environmental systems
used in the Corporation's work places to address readiness of
both direct and indirect process support systems (i.e., IT and
non-IT systems).
Progress
The Corporation is currently finishing application testing and
the development of contingency planning processes for mission
critical applications. These steps were substantially complete
by June 30, 1999. However, as noted in the graphs below which
illustrate current project progress against the work plan for
each of the Corporation's principal entities, there have been
minor delays in the testing and contingency planning phases of
the project. In all cases, these phases will be caught-up early
in the third quarter and none of the processes for which testing
and/or contingency planning are behind the Corporation's original
schedule are material or "mission critical". A certain number of
these delays were the result of delays by third-party vendors.
When this has occurred, the Corporation has accelerated progress
on other areas of the project.
Costs
The Year 2000 project has required a reallocation of business
resources from other areas of the Corporation. However, to date,
the consolidated cost of the project has not been material to the
overall financial results of operations, liquidity, or capital,
nor does the Corporation believe it will be material throughout
the duration of the project. Additionally, the Corporation does
not believe that the reallocation of resources necessary to
address the Year 2000 issue has resulted in a material adverse
change in the Corporation's ability to address other information
technology projects critical to the Corporation's growth. The
Corporation has incurred and expensed approximately $2.3 million
on the Year 2000 project since its inception. These costs have
been funded through operating cash flows. The total cost of the
project over the period 1997 to 2000 is anticipated to be
approximately $3.3 million, excluding incentive stock-based
compensation valued at approximately $0.3 million at the time of
grant. The Corporation cannot guarantee that the current
estimate of $3.3 million will be adequate to complete the
project. If the costs increase significantly beyond the current
estimate, it could have a material adverse affect on the
Corporation's financial results. The graph below illustrates the
amounts expensed on the project to date (excluding the cost of
options which are not expensed under GAAP) and on a pro forma
basis through 1999 and contain forward-looking estimates.
Year 2000 Project-Irwin Financial Consolidated
As of June 30, 1999
Pre-tax Costs in $000
1997--Actual $119
1998--Actual 1317
1999--YTD 889
1999 * 1,887
* Estimate as of June 30, 1999.
Risks
Financial services require exact calculations and prompt
delivery. If the Corporation's products are not accurate and
timely, it increases its exposure to risks such as client service
failure, regulatory compliance problems and disruption of third
party operations when it interacts with others. The Corporation
believes it has substantially implemented the necessary changes
to ensure that its internal operations are Year 2000 compliant
prior to December 31, 1999, and expects to complete those which
are not currently finished well before December 31. However, to
achieve this goal, the Corporation has relied heavily upon its
information system vendors, supplemented by the Corporation's own
internal testing. The Corporation cannot guarantee that all of
its efforts will have succeeded. In addition, if the Year 2000
issue adversely affects the Corporation's customers, this in turn
could have a material adverse effect on the Corporation's ability
to collect and service outstanding loans. Finally, even if the
Corporation's internal operations and customers are Year 2000
compliant, the Corporation's operations can be materially
adversely affected if agencies and third parties with which the
Corporation interacts fail to address the Year 2000 issue
successfully.
Contingency Plans
Each of the Corporation's entity's has developed contingency
plans, the majority of which are complete in design of the plan
and testing procedures. Those which are not yet complete are
targeted to be finished and tested by September 30, 1999. Each
of those plans will include procedures for addressing application
or third-party vendor failure as well as the financial impact of
any such failure.
Irwin Financial Corporation (parent company)
The operations of the parent company largely are intended to
further the Corporation's strategic development, allocation of
capital, planning for entering or exiting lines of business,
certain support services for its operating companies, and
external relations. There are few direct, ongoing revenue-
producing interactions with end customers of the Corporation.
Nonetheless, the services of the parent company are of sufficient
size and importance to the overall condition of the Corporation
that a separate project team is in place to assure Year 2000
readiness of its systems and operating environment.
Scope
As with the Corporation's overall project plan, the parent
company's plan included an assessment of computer hardware and
software as well as environmental systems. The principal risk of
failure to be Year 2000 compliant at the parent company lies in
the failure or delay in providing its services to its
constituents in a timely manner. In most cases, this will lead
to increases in expenses, rather than in ultimate failure to
deliver the service.
Like the other units of the Corporation, the parent company has
developed a technology strategy that primarily uses systems
developed by third parties and has very few internally developed
applications. Consequently, the parent company's principal focus
is on assuring Year 2000 compliance from its commercial
application vendors and other third-party service providers.
Progress
The progress of this team in meeting the seven-stage requirements
of its project plan to achieve Year 2000 readiness by June 30,
1999, is shown below.
Year 2000 Project-Irwin Financial (parent only)
As of June 30, 1999
Percent Completed
Target Actual Projected
Completion * Completion Actual
Completion
Date
Post-2000 Audit 0 0 During 2000
and 2001
Implementation 95 95 3Q99
Contingency
Planning 95 95 On-going
Testing 100 100 Done
Remediation 100 100 Done
Assessment 100 100 Done
Awareness 100 100 Done
* Target is original plan to achieve Year 2000 Readiness by June
30, 1999.
Contingency planning is complete except for the on-going review
of the plans as the end of the year approaches. Implementation
is complete except for the completion of an upgrade of the
company's general ledger system. The team has tested the
upgraded version and plans to move it into production in the
third quarter.
Costs
The parent company has spent approximately $196 thousand since
inception of the Year 2000 project. The graph below indicates
the amounts expensed on the project to date and on a pro forma
basis through 1999.
Year 2000 Project-Irwin Financial (parent only)
As of June 30, 1999
Pre-tax Costs in $000
1997--Actual $33
1998--Actual 103
1999--YTD 60
1999 * 115
* Estimate as of June 30, 1999.
Risks
The consequence of failure to achieve Year 2000 compliance at the
parent company is likely to be increased labor expense as certain
automated procedures are performed with additional human
intervention. If such failures cause the parent company to miss
deadlines for required filings, the company could face fines or
penalties for late reporting of regulatory items. The company
does not believe these risks pose a material monetary risk.
Contingency Plans
Contingency plans and testing procedures for all the parent
company's mission critical processes are complete. As part of
the process, plans have been made as to the exact manner in which
the company would address likely worst case scenarios, including
the financial and operational impact of such scenarios.
Irwin Mortgage Corporation
Irwin Mortgage Corporation (IMC) is principally engaged in the
business of originating, selling, and servicing mortgage loans.
Its net income is dependent on information technology and support
systems which allow the efficient production and servicing of
loans.
Scope
IMC has had teams addressing Year 2000 readiness since August of
1997 and it has adopted the same seven phase plan to achieve
readiness used by the Corporation as discussed above. IMC
participates with the Corporation's Steering Committee and has
specific internal personnel whose time is dedicated solely to the
Year 2000 project. In addition, IMC has partnered with the local
office of a national IT consulting firm that has assisted with
staff augmentation and technical expertise in the areas of code
renovation and testing applications. IMC has kept abreast of
Year 2000 issues by participating in local Year 2000 user groups
and national Year 2000 seminars.
IMC is dependent on third parties in three principal areas.
1. IMC has developed a technology strategy that primarily uses
systems developed by third parties and has very few internally
developed applications.
2. IMC depends on several key business partners to successfully
conduct operations (e.g., Government Sponsored Enterprises [GNMA,
FNMA, and FHLMC], private investors, title companies, mortgage
brokers).
3. IMC needs a properly operating infrastructure (i.e. power,
communications, transportation) in order to effectively conduct
business.
Consequently, IMC has focused its Year 2000 readiness efforts on
working with each of these groups.
As with the Corporation's overall project plan, IMC's plan
includes computer hardware, software, and environmental systems.
IMC owns none of the properties in which it conducts business, so
the principal focus of the environmental systems review has been
to work with the management companies of the facilities it
leases. Additionally, the company has worked with various user
groups to address the Year 2000 issue with public service
providers on which it depends.
Progress
IMC has substantially met its internal plan to achieve Year 2000
readiness by June 30, 1999. The first three phases of the plan
(awareness, assessment, and remediation) have been completed.
The testing phase is nearing completion as all critical
applications have completed testing with the exception of the
loan servicing and production systems, which are 90% through
their processes. Testing has involved internal application
validation in the IMC Y2K test laboratory as well as
participation in the Mortgage Bankers Association Year 2000 Inter-
Industry Test. IMC has participated in the mandatory test
transactions set forth by FNMA, FHLMC, and GNMA. Overall, the
testing process for critical applications has been successful in
that there are no outstanding Year 2000 issues pending. All
testing of critical applications is projected to be completed by
July 31, 1999. Although the testing phase was scheduled to be
completed by June 30th, the risk associated with the delay is not
considered material since the remaining applications are in the
final stages of testing. The implementation phase of this
initiative has been completed as all business critical
applications in production are claimed compliant and have
undergone, or are in the process of validation.
Year 2000 Project-Irwin Mortgage
As of June 30, 1999
Percent Completed
Target Actual Projected
Completion* Completion Actual
Completion Date
Post-2000 Audit 0 0 During 2000 and
2001
Implementation 100 100 Done
Contingency
Planning 75 85 On-going
Testing 100 90 3Q99
Remediation 100 100 Done
Assessment 100 100 Done
Awareness 100 100 Done
* Target is original plan to achieve Year 2000 readiness by June
30, 1999.
Costs
IMC has spent approximately $1.75 million since inception on the
Year 2000 project. The graph below indicates the amounts
expensed in the project to date and on a pro forma basis through
1999.
Year 2000 Project-Irwin Mortgage
As of June 30, 1999
Pre-tax Costs in $000
1997--Actual $40
1998--Actual 1,046
1999--YTD 663
1999 * 1,441
* Estimate as of June 30, 1999.
Failure to be Year 2000 compliant could cause the malfunctioning
of the loan origination or servicing systems.
If there were a failure within the loan origination system that
prevented IMC from closing mortgage loans, the company could be
adversely affected through delayed or failed loan closings. This
would reduce current revenues and/or would increase the cost to
originate loans as more processes are performed with alternative,
less efficient processes. The company has developed contingency
plans which should allow a certain amount of production to
continue, thus mitigating the loss of revenues.
Another risk to the company could involve a failure of one or
more components in the loan servicing system. The loan servicing
system is a high-volume, transactional system that makes logic
decisions based on dates (both current and future). For example,
if the payment posting module of the system fails, the company
may be unable to remit payments and information to IMC's
investors. The cost associated with this problem includes fines
(for late reporting) that could range from a few hundred dollars
to cease and desist orders that could cost IMC all revenue
related to an individual investor's servicing portfolio.
Contingency Plans
The company has made significant progress toward completing its
contingency planning efforts. Its approach is to review the most
important business processes that were identified in the
assessment phase and work with the key personnel to develop
alternative plans in case a Year 2000 issue is encountered. IMC
has completed contingency plans for 14 of 16 areas that were
identified as most critical. Plans for the loan production
process and voice communications are in the final stages of
development. All plans are anticipated to be completed and
tested by the middle of August. Although June 30, 1999, was the
original target to have all plans completed, the risk exposure
associated with this delay is not considered to be material,
based on management's assessment of its ability to complete the
development and testing of these two additional contingency plans
well before the millenium change.
Irwin Union Bank
Irwin Union Bank & Trust (the Bank) is engaged in providing
consumer and commercial banking, trust, insurance and brokerage
services primarily in central and south central Indiana. The
Year 2000 technology compliance issue poses a significant
challenge to the organization as technology has been integrated
with all major business processes. The methodology is based on
the Corporation's seven-stage implementation plan.
Scope
Recognizing the impact of non-compliance, the Bank began a
formalized compliance program in 1997. The Bank has adopted the
same seven phase plan to achieve readiness used by the
Corporation as discussed above. The Bank participates with the
Corporation's Steering Committee. The Bank's plan includes
computer hardware, software, and environmental systems.
The Bank's applications are primarily commercial off-the-shelf
applications, including its core banking technologies, facility
controls and desktop applications. In addition, the Bank
utilizes third party providers for retail brokerage and
trust/employee benefits account processing. Finally, the Bank
has two internally developed technologies, those for certificate
of deposit servicing and insurance originations that required
remediation due to non-compliance.
Progress
The Bank involved over 25 staff members to participate in Year
2000 technology discussions, vendor appraisals and compliance
testing. A multi-level testing strategy has been deployed within
the Bank. Depending on the level of vendor and third party
testing, the Bank has determined whether additional testing is
warranted. For those applications that were certified by either
a third party or vendor, the Bank has requested and reviewed the
test results and scripts. An exception to this policy of
reviewing the testing procedures of others was deemed necessary
for those applications that were critical to the Bank's continued
operation. These "Hot List" technologies were tested by bank
staff throughout the second quarter using proxy testing, vendor
scripts and/or actual date scenario testing with internally
developed scripts.
The testing procedures for third party providers are more
challenging for the Bank to assess Year 2000 compliance. The
Bank has three critical technologies that are provided through a
service bureau environment: retail brokerage, trust and employee
benefits account processing. The providers of these services are
all industry-leading firms who have committed significant
resources to ensure Year 2000 compliance. They have documented
their efforts to the Bank through ongoing disclosure of testing
plans and results. All of the third-party providers have
furnished statements of their compliance and have committed to
providing uninterrupted service before and after January 1, 2000.
The Bank has completed all Year 2000 technology testing as of
June 30, 1999.
The Bank's progress against each stage of its plan is shown
below.
Year 2000 Project-Irwin Union Bank
As of June 30, 1999
Percent Completed
Target Actual Projected
Completion* Completion Actual
Completion Date
Post-2000 Audit 0 0 During 2000 and
2001
Implementation 100 100 Done
Contingency
Planning 95 95 On-going
Testing 100 100 Done
Remediation 100 100 Done
Assessment 100 100 Done
Awareness 100 100 Done
* Target is original plan to achieve Year 2000 readiness by June
30, 1999.
Costs
The focus on commercial off-the-shelf applications has allowed
the Bank to avoid major programming costs that are required with
proprietary systems. However, the impact of testing existing
systems has added significant time requirements to the Bank's IT
department. In 1998, the Bank added a fifth IT professional to
allow the department to support its 350 users while conducting
Year 2000 activities. In addition, the Bank has incurred expense
in the replacement and repair of specific non-compliant systems.
To date, expenditures for the Year 2000 effort have totaled $233
thousand. The graph below illustrates the estimated total cost
of the project for the Bank.
Year 2000 Project-Irwin Union Bank
As of June 30, 1999
Pre-tax Costs in $000
1997--Actual $46
1998--Actual 96
1999--YTD 91
1999 * 165
* Estimate as of June 30, 1999.
Risks
The impact of specific technologies utilized by the Bank not
being Year 2000 compliant could be significant. The inability to
process, reconcile and report customer account information could
create concern for the safety and security of the customer funds.
To focus on those technologies that have the highest operational
and customer impact, the bank has conducted a risk analysis on
each technology and, based on the results, devoted adequate
resources to test, remediate and monitor.
Contingency Planning
The Bank's contingency planning approach identifies core
processes, and corresponding critical activities, to develop
alternative approaches to accomplishing the desired outputs. The
bank has formed teams composed of the department managers and
members of the IT department to evaluate the impact of technology
non-compliance for each critical process. Each team is then
responsible for preparing a contingency plan that provides
alternative operating procedures in the case of technology non-
compliance. The IT manager of the Bank is responsible for
collecting the contingency plans and ensuring completeness.
Completion of all contingency plans occurred in June 1999. The
bank will continue to review the plans to address modifications
and duties.
Irwin Home Equity
The primary products of Irwin Home Equity (IHE) are second
mortgage and line of credit loans secured by real estate. Since
IHE relies on third party processors and off-the-shelf software,
its efforts are mainly directed to the testing of these
applications. Principal remediation efforts, therefore, have
been the responsibility of its vendors.
Scope
The Company's Year 2000 project plan was developed within the
guidelines set forth by the Corporation to achieve Year 2000
readiness by June 30, 1999.
When compiling the plan, all functions of the organization were
considered, including computer software, hardware, data
communications, environmental facilities, third party vendors,
and other companies with whom data is exchanged. IHE's team to
manage the Year 2000 effort consists of individuals representing
Senior Management, Information Systems, Networks, Loan
Origination, Loan Servicing, Accounting, and Finance. In
addition, Telecommunications, Building, and Office Services are
involved in various phases of the project. A full time project
manager oversees the effort and IHE participates on the
Corporation's Steering Committee.
Progress
The company identified its mission critical applications and
tested those modules first. Applications were considered mission
critical if they have an impact on customers or could have a
negative impact on the continued operation of the company.
Testing has been completed on all mission critical applications
with the exception of credit bureaus.
Testing with credit bureaus was still in progress as of June 30,
1999. IHE recently changed vendors for the ordering of credit
reports. Testing is progressing with both the old and new
repositories as a contingency should one bureau be unavailable.
Completion is scheduled for late July. The company believes that
since both vendors have completed internal testing and provided
notification of Year 2000 readiness that there is little risk
associated with the delay in completing IHE confirmation of those
results.
The company has completed the installation of the remediated
versions of software for all of its mission critical
applications. Conversion to a new Loan Servicing System was
completed in late March 1999. Since this application is housed
at the vendor's service bureau, the company relied on proxy test
results to validate Year 2000 readiness. Results of a third
party audit of the vendor have also been requested as supporting
documentation. The vendor for the Loan Servicing system is an
industry-leading provider who has committed significant resources
to Year 2000 compliance.
The progress of the IHE Year 2000 team in meeting the
requirements of its project plan to achieve Year 2000 readiness
by June 30, 1999, is shown below.
Year 2000 Project-Irwin Home Equity
As of June 30, 1999
Percent Completed
Target Actual Projected
Completion* Completion Actual
Completion Date
Post-2000 Audit 0 0 During 2000 and
2001
Implementation 100 100 Done
Contingency
Planning 75 55 On-going
Testing 100 98 3Q99
Remediation 100 100 Done
Assessment 100 100 Done
Awareness 100 100 Done
* Target is original plan to achieve Year 2000 readiness by June
30, 1999.
Costs
Year 2000 costs have largely been limited to internal staff time
since all software and hardware upgrades were planned as part of
the company's normal business plan. Costs directly associated
with the Year 2000 remediation have thus far totaled $147
thousand. Those costs and anticipated future costs for the
project are displayed below.
Year 2000 Project-Irwin Home Equity
As of June 30, 1999
Pre-tax Costs in $000
1997--Actual
1998--Actual $72
1999--YTD 75
1999 * 166
* Estimate as of June 30, 1999.
Risks
As a result of IHE's dependence on third party providers and
despite the company's testing, there is no assurance that all
vendors will have achieved Year 2000 compliance. However, the
company believes its contingency plans should provide sufficient
backup to normal operations. For instance, should the loan
origination system be unavailable due to software problems or
environmental outages, this would slow the closing and funding
process. The loan servicing system could be unavailable,
requiring manual payment or billing methods to be implemented,
thereby incurring increased expenses. The company anticipates
that any Year 2000 failure would lead principally to increased
expenses rather than failure to perform the origination,
servicing, and support functions of the company.
Contingency Plans
IHE has established a contingency planning team, identified core
business processes, and has developed contingency plans for the
majority of its mission critical applications. The company has
determined that the most likely worst case scenario would be
environmental in nature (lack of power, telephone, data center
communications). The company is completing a detailed plan
addressing the potential impact a Year 2000 compliance failure by
it or its service providers could have on the company.
The company's contingency planning process is running slightly
behind schedule; approximately 50% complete whereas its original
plan was to be 75% complete as of June 30, 1999. However, plans
for the majority of IHE's core business processes have been
developed and are ready for testing. Certain processes, mostly
related to internal support issues, are in development with
completion scheduled by late July. All plans will be tested in
the third quarter. Plans for all areas include tasks to be
completed in late December 1999 as advance preparation should
contingency plans need to be invoked.
PART II
Item 1. Legal Proceedings
The following litigation, previously reported, was no longer
pending as of June 30, 1999:
Banda et al. v. City of Houston et al. On June 4, 1999, the 80th
Judicial District Court of Harris County, Texas, entered a final
judgement reflecting the parties' agreement to settle the lawsuit
involving Irwin Mortgage Corporation's participation in a housing
opportunity program. Irwin Mortgage had been served as a
defendant in March of 1998.
PART II
Other Information
Item 4. Submission of Matters to a Vote of Security Holders
a. The Annual Meeting of Shareholders of Registrant was held on
April 29, 1999.
b. The following directors were elected at the meeting:
Affirmative Negative Votes Votes
Votes Votes Withheld Abstained
Sally A. Dean 18,775,870 134,125 73,218 165,789
David W. Goodrich 18,833,381 134,125 15,707 165,789
John T. Hackett 18,846,928 134,125 2,160 165,789
William H. Kling 18,848,424 134,125 664 165,789
Brenda J. Lauderback 18,752,003 134,125 97,085 165,789
John C. McGinty 18,745,799 134,125 103,289 165,789
Irwin Miller 17,874,239 134,125 974,849 165,789
William I. Miller 18,848,426 134,125 662 165,789
John A. Nash 18,848,024 134,125 1,064 165,789
Lance R. Odden 18,750,870 134,125 98,218 165,789
Theodore M. Solso 18,774,726 134,125 74,362 165,789
c. Other matters voted on during the meeting were as follows:
Confirmation of independent auditors,PricewaterhouseCoopers,
of the Registrant: 18,922,908 affirmative, 115,629 negative,
110,447 abstained
Approval of the Irwin Financial Corporation Employees' Stock
Purchase Plan III: 18,691,300 affirmative, 395,685 negative,
62,017 abstained
Approval of the Irwin Financial Corporation 1999 Outside
Director Restricted Stock Compensation Plan: 18,597,603
affirmative, 468,289 negative, 83,110 abstained
Amendment of the Articles of Incorporation to increase the
total number of authorized preferred shares of the Corporation:
15,586,607 affirmative, 2,023,197 negative, 1,539,198 abstained
Amendment of the Articles of Incorporation to delete an
outdated section of Article V: 18,987,492 affirmative, 81,949
negative, 79,561 abstained
PART II
Item 6
(a) Exhibits to Form 10-Q
Number Assigned Sequential Numbering
In Regulation S-K System Page Number
Item 601 Description of Exhibit
(2) No Exhibit
(3) Articles of Incorporation
(4) No Exhibit
(10) (a) Employee Stock Purchase Plan III
(b) 1999 Outside Director Restricted
Stock Compensation Plan
(11) Computation of earnings per
share is included in the
footnotes to the financial
statements
(15) No Exhibit
(18) No Exhibit
(19) No Exhibit
(22) No Exhibit
(23) No Exhibit
(24) No Exhibit
(27) Financial Data Schedule
(99) No Exhibit
(b) Reports on Form 8-K
None
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.
IRWIN FINANCIAL CORPORATION
By: /c/ Thomas D. Washburn
________________________
Thomas D. Washburn
Chief Financial Officer
By: /c/ Marie S. Ameis
_________________________
Marie S. Ameis
Corporate Controller
(Chief Accounting Officer)
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF
IRWIN UNION CORPORATION
I, LARRY A. CONRAD, Secretary of State of the State of Indiana,
hereby certify that Articles of Incorporation of the above
Corporation, in the form prescribed by my office, prepared and
signed in duplicate by the incorporator(s), and acknowledged and
verified by the same before a Notary Public, have been presented
to me at my office accompanied by the fees prescribed by law;
that I have found such Articles conform to law; that I have
endorsed my approval upon the duplicate copies of such Articles;
that all fees have been paid as required by law; that one copy of
such Articles has been filed in my office; and that the remaining
copy of such Articles bearing the endorsement of my approval and
filing has been returned by me to the incorporator(s) or his
(their) representatives; all as prescribed by the provisions of
the Indiana General Corporation Act, as amended.
Wherefore, I hereby issue to such Corporation this Certificate of
Incorporation, and further certify that its corporate existence
has begun.
In Witness Whereof, I have hereunto set any hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
31st day of May, 1972
Larry A. Conrad, Secretary of State
ARTICLES OF INCORPORATION
OF
IRWIN UNION CORPORATION
The undersigned incorporator or incorporators, desiring to form a
corporation (hereinafter referred to as the "Corporation")
pursuant to the provisions of the Indiana General Corporation
Act, as amended (herein. after referred to as the "Act,") execute
the following Articles of Incorporation.
ARTICLE I
Name
The name of the Corporation is Irwin Union Corporation.
ARTICLE II
Purposes
The purposes for which the Corporation is formed are:
The transaction of any and all lawful business for which
corporations May be incorporated under the Act, including by way
of illustration and not of limitation, the following:
Irwin Union Corporation
ARTICLE II
Purposes
2.01. To Act as Holding Company. To purchase or otherwise
acquire, own and hold the stock of other corporations and equity
interests in other business entities and to direct the operations
of other corporations through the ownership of stock therein and
to direct the operation: of other business entities through the
ownership of equity interests therein.
2.02. Capacity to Act. To have the capacity to act
possessed by natural persons, but to have authority to perform
only such acts as are necessary, convenient or expedient to
accomplish the purposes for which it is formed and such as are
not repugnant to law.
2.03. To Deal in Securities. To acquire, by purchase,
subscription or otherwise and to receive, hold, own, guarantee,
sell, assign, exchange, transfer, mortgage, pledge or otherwise
dispose of or deal in and with any and all securities (as
hereinafter defined) issued or created by any corporation, firm,
organization, association or other entity, public or private,
whether formed under the laws of the United States of America or
any state or commonwealth thereof, or any foreign country, or by
any agency, subdivision, territory, dependency, possession or
municipality of any of the foregoing, and as owner thereof to
possess and exercise all of the rights, powers and privileges of
ownership, including the right to execute consents and vote
thereon. The term "securities" as used herein shall mean any and
all notes, stocks, treasury stocks, bonds, debentures, evidences
of indebtedness, certificates of interest or participation in any
profit-sharing agreement, collateral trust certificates, pre-
organization certificates or subscriptions, transferable shares,
investment contracts voting trust certificates, certificates of
deposit for a security, fractional undivided interests in oil,
gas or other mineral rights or, in general, any interests or
instruments commonly known as securities or any and all
certificates of interest or participation in temporary or interim
certificates for, receipts for, guarantees of, or warrants or
rights to subscribe to or purchase any of the foregoing.
2.04. Investment Management. To make, establish and maintain
investments in securities, funds or properties of any nature
whatsoever and manage such funds; to do any and all acts and
things for the preservation, protection, improvement and
enhancement of the value of such property or securities or
designed to accomplish any such purposes. To make investigations
as to the business affairs and property of corporations,
partnerships and various forms of business enterprises and to
make appraisals and valuations of all kinds and investigate and
render opinions as to the advisability from a financial
standpoint of creating, merging, combining or otherwise dealing
in business enterprise.
Article II, Page One
Irwin Union Corporation
2.05. Creation of Corporations and Other Entities. To cause
to be organized under the laws of the United States of America or
of any state, commonwealth, territory, dependency or possession
thereof, or of any foreign country, or of any political
subdivision, territory, dependency, possession or municipality
thereof, one or more corporations, firms, organizations,
associations or other entities, and to cause the same to be
dissolved, wound up, liquidated, merged or consolidated.
2.06. To Deal in Good Will. To acquire by purchase or
exchange, or by transfer, or by merger or consolidation with, the
Corporation of any corporation, firm, organization, association
or other entity owned or controlled, directly or indirectly, by
the Corporation, or otherwise to acquire the whole or any part of
the business, good will, rights or other assets of any
corporation, firm, organization, association or other entity and
to undertake or assume in connection therewith the whole or any
part of the liabilities and obligations thereof and to effect any
such acquisition in whole or in part by delivery of cash or other
property, including securities issued by the Corporation or by
any other lawful means.
2.07. To Engage in Lending. To make loans and give other
forms of credit including, but not limited to, financing,
factoring and leasing, with or without security, and to negotiate
and make contracts and agreements in connection therewith and to
sell and underwrite credit insurance and life, property and
liability insurance, directly or through subsidiaries.
2.08. To Aid Subsidiaries. To aid by loans, subsidy, guaranty
or in any other lawful manner any corporation, firm,
organization, association or other entity of which any securities
(as that term is defined in section 2.03 hereof) are in any
manner, directly or indirectly, held by the Corporation or in
which the Corporation or any such corporation, firm,
organization, association or entity may be or become otherwise
interested; to guarantee the payment of dividends on any stock
issued by any such corporation, firm, organization, association
or entity; to guarantee or, to assume, with or without recourse
against any such correlation, firm, organization, association or
entity, to do any and all other acts and things for the
enhancement, protection or preservation of any securities which
are in any manner, directly or indirectly, held , guaranteed or
assumed by the Corporation, and to do any and all acts and things
designed to accomplish any such purpose.
2.09. To Provide Services. To render service, assistance,
counsel and advice to and act as representative or agent in any
capacity, (whether managing, operating, financial, purchasing,
selling, advertising or otherwise) for any corporation, firm,
organization, association or other entity and to gather, compile
and disseminate information, data and advice in respect to
matters of commercial, financial, statistical and business nature
and to act as consultants, counselors and advisors.
Article II, Page Two
Irwin Union Corporation
2.10. To Deal in Real Estate. To acquire by purchase, exchange,
lease as lessee, let as lessor, sell, convey, or mortgage,
whether alone or in conjunction with others, real estate of every
kind, including, without limiting the generality of the
foregoing, the design, development, management, acquisition, and
operation of commercial, mercantile and service structures and
facilities of every character, recreational structures and
facilities, residential properties and structures, and mobile
home parks.
2.11. To Deal in Personal Property. To acquire (by purchase,
exchange, lease, hire or otherwise), hold, mortgage, pledge,
hypothecate, exchange, sell, deal in and dispose of, at wholesale
or retail, alone or in syndicates or otherwise in conjunction
with others, commodities or other personal property of every
kind, character and description and wherever situated, and any
interest therein.
2.12. To Deal in its Own Securities. To acquire (by
purchase, exchange, lease, hire or otherwise), hold, sell,
transfer, reissue, or cancel its own shares, or any securities or
other obligations of the Corporation, in the manner and to the
extent now or hereafter permitted by the laws of Indiana, except
that the Corporation shall not use its funds or other assets for
the purchase of its own shares if such use would cause any
impairment of the capital of the Corporation, and except that its
own shares beneficially owned by the Corporation shall not be
voted directly or indirectly.
2.13. To Make Contracts. To enter into, make, perform and
carry out, or cancel and rescind, contracts for any lawful
purposes to its business.
12.14. To Enter into Partnerships. To enter into any lawful
arrangement for sharing profits, union of interest, reciprocal
association or cooperative association with any corporation,
association, partnership individual or other entity, for the
carrying on of any business, transaction, or venture, which the
Corporation is authorized to carry on or any business,
transaction, or venture deemed necessary, convenient or
incidental to carrying out of any of the purposes of the
Corporation.
2.15. To Engage in Business Generally. To engage in any
commercial, financial, mercantile, industrial, manufacturing,
marine, exploration, mining, agricultural, research, licensing,
servicing or agency business not prohibited by law and any, some
or all of the foregoing.
2.16. To-Borrow Money. To borrow money for any business
object or purpose of the Corporation from time to time without
limit as to amount, to issue any kind of indebtedness, whether or
not in connection with borrowing money, including evidences of
indebtedness convertible into stock of the Corporation, to secure
the payment of any evidence of indebtedness by the creation of
any interest in any of the property or rights of the Corporation,
whether at that time owned or thereafter acquired.
Article-II, Page Three
Irwin Union
Corporation
2.17. To Execute Guarantees. To make any guarantee
respecting stocks, dividends, securities, indebtedness, interest,
contracts or other obligations.
2.18. Stated Capital; Consideration for Shares. To determine
the amount of the stated capital and increase or reduce stated
capital and determine the consideration to be received for shares
issued from time to time.
2.19. Rights, Privileges and Powers. Subject to any limitations
or restrictions imposed by law or by these Articles of
Incorporation, to have and exercise all the rights, privileges
and powers specified in or permitted under the Indiana General
Corporation Act.
2.20. General Powers. To do everything necessary, proper,
advisable or convenient for the accomplishment of any of the
purposes or the attainment of any of the objects of the
furtherance of any of the powers herein set forth and to do every
other act and thing incident thereto or connected therewith which
is not forbidden by the laws of the State of Indiana or by the
provisions of these Articles of Incorporation
2.21. Construction. The foregoing sections shall be construe as
purposes as well as powers and the matters expressed in each
section shall, unless otherwise expressly provided, be in no way
limited by reference to or inference from the terms of any other
section, each of such sections being regarded as creating
independent purposes and powers The enumeration shall not be
construed as limiting or restricting in any manner either the
meaning or general terms used in any of the sections or the scope
of the general powers of the Corporation created thereby. The
enumeration herein of any specific purposes or powers shall not
be held to limit or restrict in any manner the exercise by the
Corporation of the general powers now or hereafter conferred by
the laws of the state of Indiana nor shall the expression of one
thing be deemed to exclude another not expressed, whether or not
it be of like nature. The titles contained herein are solely for
convenience and are not to be considered in construing the
various sections.
2.22. Limiting Clause. Nothing in this article shall be
construed to authorize the conduct by the Corporation, directly
or indirectly, of a rural loan and savings association, credit
union or a banking, railroad, insurance, surety, trust, safe
deposit, mortgage guarantee or building and loan business or
receiving deposits or money, bullion or foreign coins or of
issuing bills, notes, or other evidences of debt or circulation
as money; provided, however, that the Corporation may own, create
or otherwise acquire all or part of the issued and outstanding
stock of corporations lawfully engaged in any of such activities.
Article II, Page Four
ARTICLE III
Period of Existence
The period during which the Corporation shall continue is
perpetual.
ARTICLE IV
Resident Agent and Principal Office
Section 1. Resident Agent. The name and address of the Resident
Agent in charge of the Corporation's principal office is John A.
Nash, 500 Washington Street, Columbus, Indiana 47201.
Section 2. Principal Office. The post office address of the
principal office of the Corporation is 500 Washington Street,
Columbus, Indiana 47201
ARTICLE V
Shares
Section 1. Number. The total number of shares which the
Corporation has authority to issue is 1,000 shares consisting of
500 common shares with the par value of $10.00 per shares, and
500 preferred shares without par value.
Section 2. Terms.
(see attached)
Section 3. Voting Rights.
(sec attached)
Irwin Union Corporation
ARTICLE V
2. Terms Shares
5.20. Classes. The authorized shares of the Corporation (the
"Shares")shall be divided into two classes consisting of 500
common shares par value $10, (the "Common Shares") and 500
preferred shares without par value (the "Preferred Shares").
5.21. Rights.
5.211. Common Shares. All Common Shares shall have the same
rights and privileges. Common Shareholders shall have no
preemptive rights.
5.212. Preferred Shares. The Board of Directors is expressly
authorized at any time, and from time to time, by resolution, to
determine and state the designations, relative rights,
preferences, limitations and restrictions of any class or classes
of Preferred Shares, or of any series of any class or classes
thereof, and to authorize the issuance of such Preferred Shares
upon compliance prior to the issuance of any such Preferred
Shares with the applicable provisions of the Act.
5.22. Dividends. Dividends or distributions may be declared
and paid upon outstanding Shares at the discretion of the Board
of Directors from time to time out of earned surplus or capital
surplus of the Corporation. Dividends payable on the Shares of
any class of Shares or series thereof may be paid to the holders
of Shares of that or any other class of Shares or series thereof.
5.23. Issuance of and Consideration for Shares. Shares may
be issued for such consideration as may be fixed from time to
time by the Board of Directors, which consideration may be equal
to, less than or more than the par value thereof. The judgment
of the Board of Directors as to (i) the value of any property or
services received in full or partial payment for Shares, and (ii)
as to the value of the corporate assets in the event of a Share
dividend, shall be conclusive. When Shares are issued upon
payment of the consideration fixed by the Board of Directors,
such Shares shall be taken to be fully paid stock and shall be
nonassessable.
5.24. Partial Distributions. The Board of Directors may make
distributions to Shareholders out of capital surplus from time to
time to the extent permitted by law.
5.25. Facsimile Signatures. Facsimile signatures may be used
in lieu of the manual signature of an officer or director of the
Corporation. In case any officer of director who has signed or
whose facsimile signature has been placed upon any share
certificate or other document issued by this Corporation shall
have ceased to be such an officer or director before such
certificate or other document is used , such certificate or other
document may be issued by the Corporation with the same effect as
if such person were an officer at the date of its issue.
Article V, Page One
Irwin Union Corporation
5.26. Transfer of Shares. Transfer of shares shall be
governed by the By-Laws of the Corporation subject to applicable
law.
3. Voting Rights.
5.30. Voting Rights.
5.301. Common Shares. Every holder of the Common Shares of the
Corporation shall have the right at every Shareholders' meeting,
to one vote for each Common Share standing in his name on the
books of the Corporation.
5.302. Preferred Shares. Holders of Preferred Shares shall have
no right to vote upon any question except as shall be
affirmatively provided in the Act, or in the remaining sections
of this article.
5.31. No Greater Requirements. Nothing in these Articles
shall be deemed to require any greater portion of the Shares to
concur in any action taken by the Shareholders than is required
by law.
5.32. Record Date. The By-Laws may provide for a record date
for determining Shareholders entitled to receive payment of
dividend or for determining Shareholders for any other purpose.
5.33. Mergers and Consolidations. Any class of Shares of
this Corporation shall be entitled to vote as a class if the
agreement of merger or consolidation contains any provision
which, if contained in a proposed amendment to the Articles of
Incorporation of the Corporation, would entitle such class of
Shares to vote as a class.
5.34. Voting on Special Corporate Transactions. In voting on
adoption of any proposal for a special corporate transaction or
for dissolution of the Corporation, all Shares shall vote as a
single class and no Shares shall be entitled to vote as a
separate class.
5.35. Mergers With Subsidiaries. Nothing herein contained
shall limit the power of the Corporation or prescribe the
procedures to be followed in any merger or consolidation of any
subsidiary of this Corporation, ninety-five percent (95%) (or
such lesser percentage as may hereafter be prescribed by law) or
more of the outstanding Shares of which subsidiary are owned by
this Corporation and any such merger or consolidation of any such
subsidiary may be accomplished by the Board of Directors of this
Corporation in the manner prescribed by law.
5.36. Class Voting. If the holders of any class of Shares are
entitled to vote as a class, the proposal shall be adopted upon
receiving the affirmative vote of the holders of at least a
majority (or such greater proportion as these Articles of
Incorporation may require) of the Shares of each class of Shares
entitled to vote thereon as a class and of the total Shares
entitled to vote thereon.
Article V, Page Two
ARTICLE VI
Requirements Prior To Doing Business
The Corporation will not commence business until consideration of
the value of at least $1,000.00 (one thousand dollars) has been
received for the issuance of shares.
ARTICLE VII
Director(s)
Section 1. Number of Directors. The initial Board of Directors
is composed 3 member(s). The number of directors may be from
time to time fixed by the By-Laws of the Corporation at any
number. In the absence of a By-Law fixing the number of
directors, the number shall be three.
Section 2. Names and Post Office Addresses of the Director(s).
The name(s) and post office addressees) of the initial Board of
Director(s) of the Corporation is (are):
Name Number and Street or Building City
State ZipCode
Paul N. Dinkins 500 Washington Street Columbus,
Indiana 47201
John A. Nash 500 Washington Street Columbus, Indiana47201
Greg W. Rush 500 Washington Street Columbus, Indiana
47201
Section 3. Qualifications of Directors. (If Any)
No qualifications are prescribed by these Articles.
ARTICLE VIII
Incorporator(s)
The name(s) and post office addressees) of the incorporator(s) of
the Corporation is (are):
Name Number and Street or Building City State Zip
Code
Irwin Miller 301 Washington Street Columbus, Indiana 47201
Paul N. Dinkins 500 Washington Street
Columbus, Indiana 47201
John A. Nash 500 Washington Street Columbus, Indiana 47201
ARTICLE IX
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
(see attached)
Irwin Union
Corporation
ARTICLE IX
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
9.01. Code of By-Laws. The Board of Directors of the
Corporation shall have power, without the assent of the
Shareholders, to make, alter, amend or repeal the Code of By-Laws
of the Corporation, but the affirmative vote of a majority of the
members of the Board of Directors for the time being shall be
necessary to make such Code or to effect any alteration,
amendment or repeal thereof. All provisions for the regulation
of business and management of the affairs of the Corporation
shall be stated in the By-Laws.
9.02. Meetings of Shareholders. Meetings of the Shareholders
of the Corporation shall be held at such place within or without
the State of Indiana as may be specified in the respective
notices or waiver: of notice thereof or as specified in the By-
Laws.
9.03. Meetings of Directors. Meetings of the Board of
Directors and committees thereof of the Corporation shall be held
at such place within or without the State of Indiana as may be
specified in the respective notices or waivers of notice thereof
or as specified in the By-Laws. The By-Laws shall prescribe the
manner in which notice of such meetings may be given and the time
before such meeting in which such notice shall be given, unless
waived.
9.04. Interest of Directors in Contracts. Any contract or
other transaction between the Corporation and any corporation in
which this Corporation owns all or a part of the capital stock
shall be valid and binding notwithstanding the fact that the
officers and/or directors executing the contract on behalf of
this Corporation are the same or a majority of them are the same
or the participating directors or officers are the same. With
the exception provided above, any contract or other transaction
between the Corporation and any one or more of its directors or
between the Corporation and any firm of which one or more of its
directors are members or employees or in which they are
interested or between the Corporation and any corporation or
association in which one or more of its directors are
stockholders, members, directors, officers or employees or in
which they are interested, shall be valid for all purposes
notwithstanding the presence of such director or directors at the
meeting of the Board of Directors which acts upon or in reference
to such contract or transaction and notwithstanding his or their
participate in such action if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of
Directors shall authorize, approve and ratify such contract or
transaction by a vote of the majority of the directors present,
such interested director or directors to be counted in
determining whether a quorum is present but not to be counted in
calculating the majority of such quorum necessary to carry such
vote. This section shall not be construed to invalidate any
contract or other transaction which would otherwise be valid
under the common and statutory law applicable thereto.
Article IX, Page One
Irwin Union Corporation
9.05. Indemnification of Directors, Officers and Employees.
9.051. "Liability" "Expense." As used in this section 9.05 the
terms "liability" and "expense" shall include but shall not be
limited to attorneys' fees and disbursements and amounts of
judgment, fines or penalties against and amounts paid in
settlement by the directors, officers or employees.
9.052. "Claim." As used in this section 9.05, the term "claim"
'shall include: (i) any claim, action, suit or proceeding,
whether actual or threatened, brought by or in the right of this
Corporation or another corporation or otherwise, civil, criminal
or administrative or in connection with an investigation or
appeal relating thereto, (ii) against a person who is or was a
director, officer or employee of this Corporation or a person who
was serving as a director, officer or employee of any other
corporation at the request of this Corporation, and (iii) which
is asserted against or threatened against him, as a party or
otherwise, by reason of his having been a director, officer or
employee of this Corporation or such other corporation or by
reason of any past or future action taken or not taken in his
capacity as such director, officer or employee, whether or not he
continues to be such at the time the claim is asserted or
threatened.
9.053. Indemnity. Any such director, officer or employee who
has been wholly successful on the merits or otherwise with
respect to any claim of the character described herein shall be
entitled to indemnification as of right. Except as provided in
the preceding sentence, any indemnification hereunder shall be
made at the discretion of the Corporation but only if (i) the
Board of Directors acting by a quorum consisting of directors who
are not parties to or who have been wholly successful with
respect to such claim, action, suit or proceeding shall find that
the person to be indemnified acted in good faith in what he
reasonably believed to be the best interests of this Corporation
or such other corporation, as the case may be, and, in addition,
in any criminal action or proceeding (which shall not be deemed
to include civil, administrative or investigative actions or
proceedings in which conduct which violates a criminal statute is
alleged) he had no reasonable cause to believe that his conduct
was unlawful, or (ii) independent legal counsel (who may be
regular counsel of the Corporation) shall deliver to it its
written opinion that the person to be indemnified so acted.
Article IX, Page Two
Irwin Union
Corporation
9.054. No Presumption. The termination of any claim by
judgment, settlement (whether with or without court approval)or
conviction or upon a plea of guilty or of nolo contendere or its
equivalent shall not create a prescription that the person to be
indemnified did not meet the standard of conduct set forth in
section 9.053.
9.055. Several Claims. If several claims, issues or matters of
ac ion are involved, any such person may be entitled to
indemnification as to some matters even though he ! is not
entitled as to other matters.
9.056. Advances. The Corporation may advance expenses @to or,
where appropriate, may at its expense undertake the ,defense of
any such director, officer or employee upon receipt of an
undertaking by or on behalf of such person to repay such expenses
if it should ultimately be determined that he is not entitled to
indemnification under this section 9.05.
9.057. Applicability. The provisions of this section 9.05shall
be applicable to claims, actions, suits or proceedings made or
commenced after the adoption hereof, whether arising from acts or
omissions to act during, before or after the adoption hereof.
9.058. Extent of Rights. The rights of indemnification provided
hereunder shall be in addition to any rights to which any person
concerned may otherwise be entitled by contract or as a matter of
law and shall inure to the benefit of the heirs, executors and
administrators of any such person.
9.59. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or is or was
serving at the request of the-Corporation as a director, officer,
employee or agent of another corporation against any liability
asserted against him and incurred by him in any capacity or
arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability
under the provisions of this section 9.05 or otherwise
9.06. Abandoned Property. After it remains unclaimed for a
period of six years, any stock or other certificate of ownership,
or any dividend, profit, distribution, interest, payment or
principal or other property held by this Corporation or owing by
this Corporation for the six consecutive years last passed shall
revert to and become the property of this Corporation. The
secretary shall prepare a written claim of the Corporation to
such fund, claim, income or property before the end of the
seventh year after its appropriate due date,, distribution date
or delivery date.
Article IX, Page Three
Irwin union Corporation
9.07. Partnerships. The Board of Directors shall have the
power to authorize the Corporation to enter into partnerships or
any other lawful arrangement for the sharing of profits, union of
interest, reciprocal association, cooperative association,
partnership, joint venture or syndicate with any corporation,
association, partnership, individual, firm or other legal entity
for the purpose of carrying on any lawful business.
9.08. Committees. The By-Laws may provide for an executive
committee and other committees, which shall have the fullest
authority to act for the Board of Directors permitted under the
laws of Indiana.
9.09. Removal of Directors. The Shareholders shall have no
power to remove directors during their terms of office. Any
director may be removed for specific cause found and determined
by a vote of not less than two-thirds (2/3) of the entire Board
of Directors at any time.
9.10. Term of Directors. When the Board of Directors consist of
nine (9) or more directors, the By-Laws may specify that the
director shall be apportioned into two or more classes whose
terms of office shall expire at different times, but no term
shall continue longer than three (3) years.
9.ll. Amendment of Articles of Incorporation. The Corporation
reserves the right to alter, amend and repeal any provisions
contained in these Articles of Incorporation in the manner now or
hereafter prescribed by the provisions of the Act or any other
pertinent enactment of the General Assembly of the State of
Indiana and all rights and powers conferred hereby on
Shareholders, directors and officers of the Corporation are
subject to such reserved right.
Article IX, Page Four
IN WITNESS WHEREOF, the undersigned, being the incorporator(s)
designated in Article VIII, execute these Articles of
Incorporation and certify to the truth of the facts herein
stated, this 30th day of May, 1972.
/s/ Irwin Miller /s/Paul N. Dinkins
- ------------------------- -----------------------
Irwin Miller Paul N. Dinkins
- ------------------------- -----------------------
/s/ John A. Nash
-----------------------
STATE OF INDIANA
ss:
COUNTY OF Bartholomew
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in State of Indiana, certify
that John A. Nash in the I being one
of the incorporator(s) referred to in Article VTII of the
foregoing Articles of Incorporation, personally appeared before
me; acknowledged the execution thereof; and swore to the truth of
the facts therein stated.
Witness my hand and Notarial Seal this 30 day of May, 1972
/s/ Antoinette Frenzer
-----------------------------
Antoinette Frenzer
------------------------------
- --
(Printed Signature)
My Commission Expires: Notary Public
December 23, 1972
This instrument was prepared by Donald W. Buttrey, Stephen J.
Dutton, Attorneys at Law,
McHALE, COOK & WELCH, 906 Chamber of Commerce Building,
Indianapolis, Indiana 46204
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDED ARTICLES OF INCORPORATION
OF
IRWIN UNION CORPORATION
I, Larry A. Conrad, Secretary of the State of Indiana, hereby
certify that Amended Articles of Incorporation for the above
Corporation, in the form prescribed bv my office, prepared and
signed in duplicate in accordance with "An Act concerning
domestic and foreign corporations for profit, providing
penalties for the violation hereof, and repealing all laws or
parts of laws in conflict herewith," approved March 16, 1929,
and Acts supplemental thereto.
Whereas, upon due examination, I find that the Amended Articles
of Incorporation conform to law, and have endorsed my approval
upon the duplicate copies of such Articles; that all fees have
been paid as required by law; that one copy of such Articles
bearing the endorsement of my approval and filing has been
returned by me to the Corporation.
In Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana at the City of Indianapolis, this
29th day of December, 1972.
Larry A. Conrad, Secretary of State
AMENDED ARTICLES OF INCORPORATION
OF
Irwin Union Corporation
The undersigned officers of Irwin Union Corporation (hereinafter
referred to as the "Corporation") existing pursuant to the
provisions of The Indiana General Corporation Act, as amended
(hereinafter referred to as the "Act"), desiring to give notice
of corporate action effectuating certain Amendments of its
Articles of Incorporation by the adoption of new Amended Articles
of Incorporation to supersede and take the place of its
heretofore existing Articles of Incorporation, certify the
following facts:
ARTICLE I
Text of the Amended Articles
The exact text of the entire Articles of Incorporation of the
Corporation, as amended (hereinafter referred to as the "Amended
Articles"), now is as follows:
See Exhibit A attached.
ARTICLE III
Period of Existence
The period during which the Corporation shall continue is
Perpetual.
ARTICLE IV
Resident Agent and Principal Office
Section 1. Resident Agent. The name and address of the Resident
Agent in charge of the Corporation's principal office is John A.
Nash, 500 Washington Street, Columbus, Indiana 47201
Section 2. Principal Office. Me post office address of the
principal office of the Corporation is 500 Washington Street,
Columbus, Indiana 47201
ARTICLE V
Shares
Section 1. Number. The total number of shares which the
Corporation has authority to issue consisting of 500,000 common
shares with the par value of $10.00 per shares, and 50,000
preferred shares without par value.
Section 2. Terms.
(see attached)
Section 3. Voting Rights.
(see attached)
Irwin Union Corporation
ARTICLE V
2. Terms Shares
5.20. Classes. The authorized shares of the Corporation (the
"Shares")shall be divided into two classes consisting of 500,000
common shares, par value $10, (the "Common Shares") and 50,000
preferred, shares without par value (the "Preferred Shares").
5.21. Rights.
5.211. Common Shares. All Common Shares shall have the same
rights and privileges. Common Shareholders shall have no
preemptive rights.
5.212. Preferred Shares. The Board of Directors is expressly
authorized at any time, and from time to time, by resolution, to
determine and state the designations, relative rights,
preferences, limitations and restrictions of any class or classes
of Preferred Shares, or of any series of any class or classes
thereof, and to authorize the issuance of such Preferred Shares
upon compliance prior to the issuance of any such Preferred
Shares with the applicable provisions of the Act.
5.22. Dividends. Dividends or distributions may be declared
and paid upon outstanding Shares at the discretion of the Board
of Directors from time to time out of earned surplus or capital
surplus of the Corporation. Dividends payable on the Shares of
any class of Shares or series thereof may be paid to the holders
of Shares of that or any other class of Shares or series thereof.
5.23. Issuance of and Consideration for Shares. Shares may
be issued for such consideration as may be fixed from time to
time by the Board of Directors, which consideration may be eaual
to, less than or more than the par value thereof. The judgment
of the Board of Directors as to (i) the value of any property or
services received in full or partial payment for Shares, and (ii)
as to the value of the corporate assets in the event of a Share
dividend, shall be conclusive. When Shares are issued upon
payment of the consideration fixed by the Board of Directors,
such Shares shall be taken to be fully paid stock and shall be
nonassessable.
5.24. Partial Distributions. The Board of Directors may make
distributions to Shareholders out of capital surplus from time to
time to the extent permitted by law.
5.25. Facsimile Signatures. Facsimile signatures may be
used in lieu of the manual signature of an officer or director of
the
Corporation. In case any officer or director who has signed or
whose
facsimile signature has been placed upon any share certificate or
other document issued by this Corporation shall have ceased to be
such an officer or director before such certificate or other
document is used, such certificate or other document may be
issued by the Corporation with the same effect as if such person
were an officer at the date of its issue.
Article V, Page One
Irwin Union Corporation
5.26. Transfer of Shares. Transfer of Shares shall be
governed by the By-Laws of the Corporation subject to applicable
law.
3. Voting Rights
5.30. Voting Rights.
5.301. Common Shares. Every holder of the Common Shares of
the Corporation shall have the right at every Shareholders'
meeting, to one vote for each Common Share standing in his name
on the books of the Corporation.
5.302. Preferred Shares. Holders of Preferred Shares shall
have no right to vote upon any question except as shall be
affirmatively provided in the Act, or in the remaining sections
of this article.
5.31. No Greater Requirements. Nothing in these Articles
shall be deemed to require any greater portion of the Shares to
concur in any action taken by the Shareholders than is required
by law.
5.32. Record Date. The By-Laws may provide for a record date
for determining Shareholders entitled to receive payment of any
dividend or for determining Shareholders for any other purpose.
5.33. Mergers and Consolidations. Any class of Shares of
this Corporation shall be entitled to vote as a class if the
agreement of merger or consolidation contains any provision
which, if contained in a proposed amendment to the Articles of
Incorporation of the Corporation, would entitle such class of
Shares to vote as a class.
5.34. Voting on Special Corporate Transactions. In voting on
adoption of any proposal for a special corporate transaction or
for dissolution of the Corporation, all Shares shall vote as a
single class and no Shares shall be entitled to vote as a
separate class.
5.35. Mergers With Subsidiaries. Nothing herein contained
shall limit the power of the Corporation or prescribe the
procedures to be followed in any merger or consolidation of any
subsidiary of this Corporation, ninety-five percent (95%) (or
such lesser percentage as may hereafter be prescribed by law) or
more of the outstanding Shares of which subsidiary are owned by
this Corporation and any such merger or consolidation of any such
subsidiary may be accomplished by the Board of Directors of this
Corporation in the manner prescribed by law.
5.36. Class Voting. If the holders of any class of Shares
are entitled to vote as a class, the proposal shall be adopted
upon receiving the affirmative vote of the holders of at least a
majority (or such greater proportion as these Articles of
Incorporation may require) of the Shares of each class of Shares
entitled to vote thereon as a class and of the total Shares
entitled to vote thereon.
Article V, Page Two
ARTICLE VI
Requirements Prior To Doing Business
The stated capital of the Corporation is at least $1000.00.
ARTICLE VII
Director(s)
Section 1. Number of Directors. The Board of Directors is
composed of 16 member(s) The number of directors may be from time
to time fixed by the By-Laws of the Corporation at any number.
In the absence of a By-Law fixing the number of directors, the
number shall be sixteen.
Section 2. Names and Post Office Addresses of the Director(s).
The name(s) and post office addressees) Of the Board of
Director(s) of the Corporation (are):
Name Number and Street or Building city State Zip Code
Eugene I. Anderson 500 Washington Street, Columbus, Indiana
47201
Paul N. Dinkins 500 Washington Street, Columbus,
Indiana 47201
George Doup 500 Washington Street, Columbus,
Indiana 47201
Edward E. Edwards 500 Washington Street, Columbus,
Indiana 47201
Harry J. Embry 500 Washington Street, Columbus, Indiana
47201
Lowell E. Engelking 500 Washington Street, Columbus, Indiana
47201
Frank C. Forster 500 Washington Street, Columbus, Indiana
47201
Clarence 0. Hamilton 500 Washington Street, Columbus, Indiana
47201
William R. Laws, Jr. 500 Washington Street, Columbus, Indiana
47201
Irwin Miller 301 Washington Street, Columbus, Indiana
47201
John A. Nash 500 Washington Street, Columbus, Indiana
47201
Paul H. Pardieck 500 Washington Street, Columbus, Indiana
47201
Charles A. Rau 500 Washington Street, Columbus, Indiana
47201
Carl M. Reeves 500 Washington Street, Columbus, Indiana
47201
Albert H. Schumaker 500 Washington Street, Columbus, Indiana
47201
E. Don Tull 500 Washington Street, Columbus, Indiana
47201
Section 3. Qualifications of Directors. (If Any)
No qualifications are prescribed by these Articles.
ARTICLE VIII
Incorporators
The name(s) and post office addressees) of the of the
Corporation (are): President and Executive Vice President,
Secretary
Name Number and Street or Building City
State Zip Code
Paul N. Dinkins 500 Washington Street, Columbus,
Indiana 47201
(President)
John A. Nash 500 Washington Street, Columbus,
Indiana 47201
(Executive Vice President, Secretary)
ARTICLE IX
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
(See attached)
Irwin Union Corporation
ARTICLE IX
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
9.01. Code of By-Laws. The Board of Directors of the
Corporation shall have power, without the assent of the
Shareholders, to make, alter, amend or repeal the Code of By-Laws
of the Corporation, but the affirmative vote of a majority of the
members of the Board of Directors for the time being shall be
necessary to make such Code or to effect any alteration,
amendment or repeal thereof. All provisions for the regulation
of business and management of the affairs of the Corporation
shall be stated in the By-Laws.
9.02. Meetings of Shareholders. Meetings of the Shareholders
of the Corporation shall e held at such place within or without
the State of Indiana as may be specified in the respective
notices or waivers of notice thereof or as specified in the By-
Laws.
9.03. Meetings of Directors. Meetings of the Board of
Directors and committees thereof of the Corporation shall be held
at such place within or without the State of Indiana as may be
specified in the respective notices or waivers of notice thereof
or as specified in the By-Laws. The By-Laws shall prescribe the
manner in which notice of such meetings may be given and the time
before such meeting in which such notice shall be given, unless
waived.
9.04. Interest of Directors in Contracts. Any contract or
other transaction between the Corporation and any corporation in
which this Corporation owns all or a part of the capital stock
shall be valid and binding notwithstanding the fact that the
officers and/or directors executing the contract on behalf of
this Corporation are the same or a majority of them are the same
or the participating directors or officers are the same. With
the exception provided above, any contract or other transaction
between the Corporation and any one or more of its directors or
between the Corporation and any firm of which one or more of its
directors are members or employees or in which they are
interested or between the Corporation and any corporation or
association in which one or more of its directors are
stockholders, members, directors, officers or employees or in
which they are interested, shall be valid for all purposes
notwithstanding the presence of such director or directors at the
meeting of the Board of Directors which acts upon or in reference
to such contract or transaction and notwithstanding his or their
participation such action if the fact of such interest shall be
disclosed or known to the Board of Directors and the Board of
Directors shall authorize, approve and ratify such contract or
transaction by a vote of the majority, of the directors present,
such interested director or directors to be counted in
determining whether a quorum is present but not to be counted in
calculating the majority of such quorum necessary to carry such
vote. This section shall not be construed to invalidate any
contract or other transaction-which would otherwise be valid
under the common and statutory, law applicable thereto.
Article IX, Page One
Irwin Union Corporation
9.05. Indemnification of Directors, Officers and
Employees.
9.051. "Liability;" "Expense;" As used in this section 9.05
The terms "liability" and "expense" shall include but shall not
be limited to attorneys' fees and disbursements and amounts of
judgment, fines or penalties against and amounts paid in
settlement by the directors, officers or employees.
9.052. "Claim." As used in this section 9.05, the term "claim"
shall include: (i) any claim, action, suit or proceeding, whether
actual or threatened, brought by or in the right of this
Corporation or another corporation or otherwise, civil, criminal
or administrative or in connection with an investigation or
appeal relating thereto, (ii) against a person who is or was a
director, officer or employee of this Corporation or a person who
was serving as a director, officer or employee of any other
corporation at the request of this Corporation, and (iii) which
is asserted against or threatened against him, as a party or
otherwise, by reason of his having been a director, officer or
employee of this Corporation or such other corporation or by
reason of any past or future action taken or not taken in his
capacity as such director, officer or employee, whether or not he
continues to be such at the time the claim is asserted or
threatened.
9.053. Indemnity. Any such director, officer or employee who
has been wholly successful on the merits or otherwise with
respect to any claim of the character described herein shall be
entitled to indemnification as of right. Except as provided in
the preceding sentence, any indemnification hereunder shall be
made at the discretion of the Corporation but only if (i) the
Board of Directors acting by a quorum consisting of directors who
are not parties to or who have been wholly successful with
respect to such claim, action, suit or proceeding shall find that
the person to be indemnified acted in good faith in what he
reasonably believed to be the best interests of this Corporation
or such other corporation, as the case may be, and, in addition,
in any criminal action or proceeding (which shall not be deemed
to include civil, administrative or investigative actions or
proceedings in which conduct which violates a criminal statute is
alleged) he had no reasonable cause to believe that his conduct
was unlawful, or (ii) independent legal counsel (who may be
regular counsel of the Corporation) shall deliver to it its
written opinion that the person to be indemnified so acted..
Article IX, Page Two
Irwin Union Corporation
9.054. No Presumption. The termination of any claim by
judgment, settlement (whether with or without court approval)or
conviction or upon a plea of guilty or of nolo contendere or its
equivalent shall not create 8L prescription that the person to be
indemnified did not meet the standard of conduct set forth in
section 9.053.
9.055. Several Claims. If several claims, issues or matters
of ac ion are involved, any such person may be entitled to
indemnification as to some matters even though he is not entitled
as to other matters.
9.056. Advances. The Corporation may advance expenses to or,
where appropriate, may at its expense und4rtake the defense of
any such director, officer or employee upon receipt of an
undertaking by or on behalf of such person to repay such expenses
if it should ultimately be determined that he is not entitled to
indemnification under this section 9.05.
9.057. Applicability. The provisions of this section
9.05 shall be applicable to claims, actions, suits or proceedings
made or commenced after the adoption hereof, whether arising from
acts or omissions to act during, before or after the adoption
hereof.
9.058. Extent of Rights The rights of indemnification
provided hereunder shall be in addition to any rights to which
any person concerned Pay otherwise be entitled by contract or as
a matter of law and shall inure to the benefit of the heirs,
executors and administrators of any such person.
9.059. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation against any liability
asserted against him and incurred by him in any capacity or
arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability
under the provisions of this section 9.05 or otherwise.
Article IX, Page Three
Irwin Union Corporation
9.06. Partnerships. The Board of Directors shall have the power
to authorize the Corporation to enter into partnerships or any
other lawful arrangement for the sharing of profits, union of
interest, reciprocal association, cooperative association,
partnership, joint venture or syndicate with any corporation,
association, partnership, individual, firm or other legal entity
for the purpose of carrying on any lawful business.
9.07. Committees. The By-Laws may provide for an executive
committee and other committees, which shall have the fullest
authority to act for the Board of Directors permitted under the
laws of Indiana.
9.08. Removal of Directors. The Shareholders shall have no
power to remove directors during their terms of office. Any
director may be removed for specific cause found and determined
by a vote of not less than two-thirds (2/3) of the entire Board
of Directors at any time.
9.09. Term of Directors. When the Board of Directors consists
of nine (9) or more directors, the By-Laws may specify that the
director shall be apportioned into two or more classes whose
terms of office shall expire at different times, but no term
shall continue longer than three (3) years.
9.10. Amendment of Articles of Incorporation. The Corporation
reserves the right to alter, amend and repeal any provisions
contained in these Articles of Incorporation in the manner now or
hereafter prescribed by the provisions of the Act or any other
pertinent enactment of the General Assembly of the State of
Indiana and all rights and powers conferred hereby on
Shareholders, directors and officers of the Corporation are
subject to such reserved right.
Article IX, Page Four
ARTICLE 11
Manner of Adoption and Vote
(b) By written consent executed on December 18, 1972 signed by
all of the members of the Board of Directors of the Corporation
entitled to vote in respect of the Amended Articles, that the
provisions and terms of Articles V & IX of its Articles of
Incorporation be amended so as to read as set forth in the
amended Articles, and a meeting of such Shareholders was called
to be held January 2, 1973, to adopt or reject the Amended
Articles unless the same were so approved prior to such date by
unanimous written consent.
Section 2. Action by Shareholders (select appropriate paragraph)
(b) By written consent executed on December 18, 1972, signed by
the holders to 500 common shares of the Corporation, being all of
the shares of the Corporation entitled to vote in respect of the
Amendments, the Shareholders adopted the Amended Articles.
Section 3. Compliance With Legal Requirements
The manner of the adoption of the Amended Articles, and the vote
by which they were adopted, constitute full legal compliance with
the provisions of the Acts, the Articles of Incorporation, and
the By-Laws of the Corporation.
ARTICLE III
Statement of Changes Made With Respect
To the Number of Shares Heretofore Authorized
Section 1, of Article V of the Articles of Incorporation was
amended to increase the number of authorized shares from 1,000
authorized shares to 550,000 authorized shares, consisting of
500,000 common shares with the par value of $10 per share, and
50,000 preferred shares without par value.
IN WITNESS WHEREOF, the undersigned officers execute these
Amended Articles of Incorporation of the Corporation and certify
to the truth of the facts herein stated, this 18th day of
December, 1972,
/s/ Paul N. Dinkins /s/ John A. Nash
- ------------------- ----------------
(Written Signature) (Written Signature)
Paul N. Dinkins John A. Nash
- ---------------- --------------------
(Printed Signature) (Printed Signature)
President of Secretary of
Irwin Union Corporation Irwin Union Corporation
STATE OF INDIANA
SS:
COUNTY OF BARTHOLOMEW.
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana,
certify that Paul N. Dinkins ,the President and
John A. Nash, the Secretary of Irwin Union Corporation, the
officers executing the foregoing Amended Articles of
Incorporation, personally appeared before me, acknowledged the
execution thereof; and swore to the truth of the facts herein
stated.
Witness my hand and Notarial Seal this 18th day of December,
1972.
/s/ Antoinette Frenzer
- ------------------------
(written Signature)
Antoinette Frenzer
- ------------------------
(Printed Signature)
Notary Public
My Commission Expires:
December 23, 1976
This instrument was prepared by Donald W. Buttrey, Stephen J.
Dutton Randolph L. Seger Attorneys at Law, McHalle, Cook & Welch,
906 Chamber of Commerce Building, Indianapolis, Indiana 46204
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
IRWIN UNION CORPORATION
I, LARRY A. CONRAD, Secretary of State of the Slate of Indiana,
hereby certify that Articles of Amendment for the above
Corporation, in the form prescribed by my office, prepared and
signed in duplicate in accordance with "An Act concerning
domestic and foreign corporations for profit, providing penalties
for the violation hereof, and repealing all laws or parts of laws
in conflict herewith," approved March 16, 1929, and Acts
supplemental thereto.
The Amendment: The exact text of Article V, Section I and Section
5.20
Whereas, upon due examination, I find that the Articles of
Amendment conform to law, and have endorsed my approval upon the
duplicate copies of such Articles; that all fees have been paid
as required by law; that one copy of such Articles has been filed
in my office; and that the remaining copy of such Articles
bearing the endorsement of my approval and filing has been
returned by me to the Corporation.
In Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the Citv of Indianapolis, this
3rd day of March, 1973.
LARRY A. CONRAD, Secretary of State
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
IRWIN UNION CORPORATION
The undersigned officers of IRWIN UNION CORPORATION (hereinafter
referred to as the "Corporation") existing pursuant to the
provisions of the Indiana General Corporation Act, as amended
(hereinafter referred to as the "Act"), desiring to give notice
of corporate action effectuating amendment of certain provisions
of its Articles of Incorporation, certify the following facts:
ARTICLE I
Text of the Amendment
The exact text of Article(s).V Section and Section 5.20 of the
Articles of Incorporation of the Corporation, as amended
(hereinafter referred to as the "Amendments"), now is as follows:
Section 1. Number. The number of shares which the Corporation
has the authority to issue is 1,050,000 shares consisting of
1,000,000 common shares with a par value of $5 per share, and
50,000 preferred shares without par value.
Section 5.20. Classes. The authorized shares of the Corporation
(the "Shares") shall be divided into two classes consisting of
1,000,000 common shares, par value $5, (the "Common Shares") and
50,000 preferred shares without par value (the "Preferred
Shares").
ARTICLE II
Manner of Adoption and Vote
Section 1. Action by Directors (select appropriate paragraph).
(a) The Board of Directors of the Corporation, at a meeting
thereof, duly called, constituted and held on at which a quorum
of such Board of Directors was present, duly adopted a resolution
proposing to the Shareholders of the Corporation entitled to vote
in respect the Amendments that the provisions and terms of
Article V of its Articles of Incorporation be amended so as to
read as set forth in the Amendments; and called a meeting of such
shareholders, to be held March 20, 1973, to adopt or reject the
Amendments, unless the same were so approved prior to such date
by unanimous written consent.
Section 2. Action by Shareholders (select appropriate paragraph)
(a) The Shareholders of the Corporation entitled to vote in
respect of the Amendments, at a meeting thereof, duly called,
constituted and held on March 20 1973, the holders at which
common shares were present in person or by proxy, adopted the
Amendments.
The holders of the following classes of shares were entitled to
vote as a class in respect of the Amendments:
(1) Common shares
(2)
(3)
The number of shares entitled to vote in respect of the
Amendments, the number of shares voted in favor of the adoption
of the Amendments, and the number of shares voted against such
adoption are as follows:
Total Shares Entitled to Vote as a Class (as listed immediately
above)
Total (1) (2) (3)
Shares entitled to vote: 282,984 282,984
Shares voted in favor: 238,314 238,314
---------------------
Shares voted against: 85 85
Section 3. Compliance with Legal Requirements.
The manner of the adoption of the Amendments, and the vote by
which they were adopted, constitute full legal compliance with
the provisions of the Act, the Articles of Incorporation, and the
By-Laws of the Corporation.
ARTICLE III
Statement of Changes Made With Respect to Any Increase
In The Number of Shares Heretofore Authorized
Aggregate Number of Shares
Previously Authorized 550,O00
Increase 500,000
Aggregate Number of Shares To Be Authorized After Effect of This
Amendment 1,050,000
IN WITNESS WHEREOF, the undersigned officers execute these
Articles of Amendment of the Articles of Incorporation of the
Corporation, and certify to the truth of the facts herein stated,
18th day of March, 1973.
/s/ John A. Nash /s/ Robert E. Kirk
- ------------------- -------------------
(Written Signature Written Signature
John A. Nash Robert E. Kirk
(Printed Signature) (Printed
Signature)
Executive Vice President Secretary of
of Irwin Union Corporation Irwin Union Corporation
STATE OF INDIANA
SS:
COUNTY OF Bartholomew
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana,
certify that John A. Nash, the Executive Vice President, and
Robert E. Kirk, the Secretary of Irwin Union Corporation the
officers executing the foregoing Articles of Amendment of the
Articles of Incorporation, personally appeared before me,
acknowledged the execution thereof, and swore to the truth of the
facts therein stated.
Witness my hand and Notarial Seal this 27th day of March, 1973.
/s/ Gloria Harbaugh
(Written Signature)
Gloria Harbaugh
(Printed Signature)
Notary Public
My Commission Expires: April 22, 1974
Stephen J. Dutton
This instrument was prepared by Stephen J. Dutton, Attorney at
Law,
McHALE, COOK & WELCH, 906 Chamber of Commerce Building,
Indianapolis, 46204
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office a
Resolution of the Board of Directors electing to be governed by
the provisions of the Indiana Business Corporation Law prior to
August 1, 1987 of
IRWIN UNION CORPORATION
and said Resolution has been prepared and signed in accordance
with the provisions of the Indiana Business Corporation Law.
WHEREAS., upon due examination,, I find that it satisfies the
requirements of I.C. 23-1-17-3(b) and I.C. 23-1-13-1:
NOW, THEREFORE, I EDWIN J. SIMCOX, Secretary of State of Indiana,
hereby certify that I have this day filed the Resolution of the
Board of Directors in this office.
Effective date the provisions will apply is JUNE 24th, 1986.
In Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
23rd day of June, 1986
/s/ Edwin J. Simcox
Secretary of State,
CERTIFICATE REGARDING
ELECTION OF APPLICATION OF
INDIANA BUSINESS CORPORATION LAW
The undersigned, the duly elected and acting Secretary of
Irwin Union Corporation ("Corporation), respectively hereby
certify, verify and affirm, subject to the penalties for perjury,
that the attached resolutions were adopted by the Board of
Directors of the Corporation at a meeting thereof, duly
constituted, and held on May 20, 1986; and that the effective
date of the election to have the Indiana Business Corporation Law
apply to the Corporation, as set forth in such resolutions is
June 24, 1986.
Dated this 20th day of May 1986.
/s/ Matthew F. Souza
- ----------------------------------
[Name], [Office] of [Corporation]
Matthew F. Souza, Secretary
Irwin Union Corporation
ATTEST:
/s/Thomas D. Washburn
- -----------------------
Senior Vice President
Irwin Union Corporation
RESOLUTIONS REGARDING
ELECTION TO BE GOVERNED BY
THE NEW INDIANA BUSINESS CORPORATION LAW
WHEREAS, the Indiana General Assembly has recently adopted new
statutory provisions governing business corporations, known as
the Indiana Business Corporation Law ("New Statute"); and
WHEREAS, the New Statute generally applies to all Indiana
corporations after July 31, 1987; although a corporation's board
of directors may elect to have the New Statute apply earlier by
adopting and filing a resolution electing to have the New Statute
apply to that corporation; and
WHEREAS, the Board of Directors has carefully considered a
summary and presentation of significant provisions of the New
Statute prepared by counsel to the Corporation; and
WHEREAS, the Board of Directors has determined that it is in the
best interests of the Corporation to cause the New Statute to
apply to the Corporation prior to August 1, 1987, for the
following reasons, among others;
(1) The New Statute provides greater flexibility in corporate
governance and thereby reduces the time and expense required to
ensure compliance with state law;
(2) The New Statute provides the Corporation with an increased
opportunity to recruit and retain qualified directors by
providing them greater protection against potential liability;
(3) The New Statute provides the Corporation with greater
protection against vexatious or groundless derivative suits,
while protecting the rights of shareholders to pursue meritorious
derivative claims; and
(4) The New Statute provides the Corporation with greater
protection against the misuse of information obtained upon
inspection by shareholders of corporate records.
THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
elects
to have the New Statute (in particular, Ind. Code 23-1-18
through 23-1-54, excluding Ind. Code _23-1-18-3, 23-1-21 and 23-
1-53-3) apply to the Corporation on and after June 24, 1986;
RESOLVED FURTHER, that the President, any Vice President,
Secretary
and Treasurer, and each of them, be, and hereby are, authorized
and directed to (1) file the foregoing resolution in the Office
of the Secretary of State of Indiana and (2) take any and all
additional action as may be deemed necessary or desirable to
implement the foregoing resolution.
EXHIBIT A
ARTICLES OF INCORPORATION
OF
IRWIN UNION CORPORATION
The undersigned incorporator or incorporators, desiring to form a
corporation (hereinafter referred to as the "Corporation")
pursuant to the provisions of the Indiana General Corporation
Act, as amended (herein. after referred to as the "Act,") execute
the following Articles of Incorporation.
ARTICLE I
Name
The name of the Corporation is Irwin Union Corporation
ARTICLE II
Purposes
The purposes for which the Corporation is formed are:
The transaction of any and all lawful business for which
corporations may be incorporated under the Act, including by way
of illustration and not of limitation, the following:
Irwin Union Corporation
ARTICLE II
Purposes
2.01. To Act as Holding Company. To purchase or otherwise
acquire, own and old the stock of other corporations and equity
interest in other business entities and to direct the operations
of other corporations through the ownership of stock therein and
to direct the operations of other business entities through the
ownership of equity interests therein.
2.02. Capacity to Act. To have the capacity to-act possessed
by natural persons, but to have authority to perform only such
acts as are necessary, convenient or expedient to accomplish the
purposes for which it is formed and such as are not repugnant to
law.
2.03. To Deal in Securities. To acquire, by purchase,
subscription or otherwise and to receive, hold, own, guarantee,
sell, assign, exchange, transfer, mortgage, pledge or otherwise
dispose of or deal in and with any and all securities (as
hereinafter defined) issued or created by any corporation, firm,
organization, association or other entity, public or private,
whether formed under the laws of the United States of America or
any state or commonwealth thereof, or any foreign country, or by
any agency, subdivision, territory, dependency, possession or
municipality of any of the foregoing, and as owner thereof to
possess and exercise all of the rights, powers and privileges of
ownership, including the right to execute consents and vote
thereon. The term "securities" as used herein shall mean any and
all notes, stocks, treasury stocks, bonds, debentures, evidences
of indebtedness, certificates of interest or participation in any
profit sharing agreement, collateral trust certificates, pre-
organization certificates or subscriptions, transferable shares,
investment contracts, voting trust certificates, certificates of
deposit for a security, fractional undivided interests in oil,
gas or other mineral rights or, in general, any interests or
instruments commonly known as securities or any and all
certificates of interest or participation in temporary or interim
certificates for, receipts for, guarantees of, or warrants or
rights to subscribe to or purchase any of the foregoing.
2.04. Investment Management. To make, establish and maintain
investments in securities, funds or properties of any nature
whatsoever and to manage such funds; to do any and all acts and
things for the preservation, protection, improvement and
enhancement of the value of such property or securities or
designed to accomplish any such purposes. To make investigations
as to the business affairs and property of corporations,
partnerships and various forms of business enterprises and to
make appraisals and valuations of all kinds and investigate and
render opinions as to the advisability from a financial
standpoint of creating, merging, combining or otherwise dealing
in business enterprises
Article II, Page One
Irwin Union Corporation
2.05. Creation of Corporations and Other Entities. To cause
to be organized under the laws of the United States of America or
of any state, commonwealth, territory, dependency or possession
thereof, or of any foreign country, or of any political
subdivision, territory, dependency, possession or municipality
thereof, one or more corporations, firms, organizations,
associations or other entities, and to cause the same to be
dissolved, wound up, liquidated, merged or consolidated.
2.06. To Deal in Good Will. To acquire by purchase or
exchange, or by transfer, or by merger or consolidation with, the
Corporation of any corporation, firm, organization, association
or other entity owned or controlled, directly or indirectly, by
the Corporation, or otherwise to acquire the whole or any part of
the business, good will, rights or other assets of any
corporation, firm, organization, association or other entity and
to undertake or assume in connection therewith the whole or any
part of the liabilities and obligations thereof and to effect any
such acquisition in whole or in part by delivery of cash or other
property, including securities issued by the Corporation or by
any other lawful means.
2.07. To Engage in Lending. To make loans and give other
forms of credit including, but not limited to, financing,
factoring and leasing, with or without security, and to negotiate
and make contracts and agreements in connection therewith and to
sell and underwrite credit insurance and life, property and
liability insurance, directly or throuc.1 subsidiaries.
2.08. To Aid Subsidiaries. To aid by loans, subsidy,
guaranty or in any other lawful manner any corporation, firm,
organization, association or other entity of which any securities
(as that term is defined in section 2.03 hereof) are in any
manner, directly or indirectly, held by the Corporation or in
which the Corporation or any such corporation, firm,
organization, association or entity may be or become otherwise
interested; to guarantee the payment of dividends on any stock
issued by any such corporation, firm, organization, association
or entity; to guarantee or, to assume, with or without recourse
against any such corporation, firm, organization, association or
entity, the payment of the principal of, and/or the interest and
premium, if any, on any obligations issued or incurred by such
corporation, firm, organization ( association or entity; to do
any and all other acts and things for the enhancement, protection
or preservation of any securities which are in any manner,
directly or indirectly, held, guaranteed or assumed by the
Corporation, and to do any and all acts and things designed to
accomplish, any such purpose.
2.09. To Provide Services. To render service, assistance,
counsel and advice to and act as representative or agent in any
capacity (whether managing, operating, financial, purchasing,
selling, advertising or otherwise) for any corporation, firm,
organization, association or other entity and to gather, compile
and disseminate information, data and advice in respect to
matters of a commercial, financial, statistical and business
nature and to act as consultants, counselors and advisors.
Article II, Page Two
Irwin Union Corporation
2.10. To Deal in Real Estate. To acquire by purchase,
exchange, lease or otherwise, and to hold, own, improve, operate,
manage, lease as lessee, let as lessor, sell, convey or mortgage,
whether alone or in conjunction with others, real estate of every
kind, character and description, and wherever situated, or any
interest therein including, without limiting the generality of
the foregoing, the design, development, management, acquisition,
and operation of commercial, mercantile and service structures
and facilities of every character, recreational structures and
facilities, residential properties and structures, and mobile
home parks.
2.11. To Deal in Personal Property. To acquire (by purchase,
exchange, lease, hire or otherwise), hold, mortgage, pledge,
hypothecate, exchange, sell, deal in and dispose of, at wholesale
or retail, alone or in syndicates or otherwise in conjunction
with others, commodities or other personal property of every
kind, character and description and wherever situated, and any
interest therein.
2.12. To Deal in its Own Securities. To acquire (by
purchase, exchange, lease, hire or otherwise), hold, sell,
transfer, reissue, or cancel its own shares, or any securities or
other obligations of the Corporation, in the manner and to the
extent now or hereafter permitted by the laws of Indiana, except
that the Corporation shall not use its funds or other assets for
the purchase of its own shares if such use would cause any
impairment of the capital of the Corporation, and except that its
own shares beneficially owned by the Corporation shall not be
voted directly or indirectly.
2.13.To Make Contracts. To enter into, make, perform and carry
out, or cancel and rescind, contracts for any lawful purposes to
its business.
2.14. To Enter into Partnerships. To enter into any lawful
arrangement for sharing profits, union of interest, reciprocal
association or cooperative association with any corporation,
association, partnership individual or other entity, for the
carrying on of any business, transaction, or venture, which the
Corporation is authorized to carry on or any business,
transaction, or venture deemed necessary, convenient or
incidental to carrying out of any of the purposes of the
Corporation.
2.15. To Engage in Business Generally. To engage in any
commercial, financial, mercantile, industrial, manufacturing,
marine, exploration, mining, agricultural, research, licensing,
servicing or agency business not prohibited by law and any, some
or all of the foregoing.
2.16. To Borrow Money. To borrow money for any business object
or purpose of the Corporation from time to time without limit as
to amount, to issue any kind of indebtedness, whether or not in
connection with borrowing money, including evidences of
indebtedness convertible into stock of the Corporation, to secure
the payment of any evidence of indebtedness by the creation of
any interest in any of the property or rights of the Corporation,
whether at that time owned or thereafter acquired.
Article II, Page Three
Irwin union Corporation
2.17. To Execute Guarantees. To make any guarantee
respecting stocks, dividends, securities, indebtedness, interest,
contracts or other obligations.
2.18. Stated Capital; Consideration for Shares. To determine
the amount of the stated capital and increase or reduce stated
capital and determine the consideration to be received for shares
issued from time to time.
2.19. Rights, Privileges and Powers. Subject to any
limitations or restrictions imposed by law or by the-se Articles
of Incorporation, to have and exercise all the rights, privileges
and powers specified in or permitted under the Indiana General
Corporation Act.
2.20. General Powers. To do everything necessary, proper,
advisable or convenient for the accomplishment of any of the
purposes or the attainment of any of the objects of the
furtherance of any of the powers herein set forth and to do every
other act and thing incidental thereto or connected therewith
which is not forbidden by the laws of the State of Indiana or by
the provisions of these Articles of Incorporation.
2.21. Construction. The foregoing sections shall be
construed as purposes as well as powers and the matters expressed
in each section shall, unless otherwise expressly provided, be in
no way limited by reference to or inference from the terms of any
other section, each of such sections being regarded as creating
independent purposes and powers. The enumeration shall not be
construed as limiting or restricting in any manner either the
meaning or general terms used in any of the sections or the scope
of the general powers of the Corporation created thereby. The
enumeration herein of any specific purposes or powers shall not
be held to limit or restrict in any manner the exercise by the
Corporation of the general powers now or hereafter conferred by
the laws of the state of Indiana nor shall the expression of one
thing be deemed to exclude another not expressed, whether or not
it be of like nature. The titles contained herein are solely for
convenience and are not to be considered in construing the
various sections.
2.22. Limiting Clause. Nothing in this article shall be
construed to authorize the conduct by the Corporation, directly
or indirectly, of a rural loan and savings association, credit
union or a banking, railroad, insurance, surety, trust, safe
deposit, mortgage guarantee or building and loan business or
receiving deposits of money, bullion or foreign coins or of
issuing bills, notes, or other evidences of debt or circulation
as money; provided, however, that the Corporation may own, create
or otherwise acquire all or part of the issued and outstanding
stock of corporations lawfully engaged in any of such activities.
Article II, Page Four
CERTIFICATE OF CONSENT TO USE OF NAME
Irwin Union Bank and Trust Company, an Indiana bank, on its own
behalf and on behalf of its wholly-owned subsidiary, Irwin Union
Realty Corporation, hereby consents to incorporation under the
Indiana General Corporation Act of a incorporation on having the
name Irwin Union Corporation; consents that said corporation be
authorized to transact business in Indiana; and grants permission
to use, and consents to the use of, the name Irwin Union
Corporation by said Indiana corporation as is provided by the
Indiana General Corporation Act (IC 1971, 23-1-2-4).
IN WITNESS WHEREOF said Irwin Union Bank and Trust Company, an
Indiana bank, has caused this Certificate of Consent to be
executed in its proper corporate name by the officers below this
day of May 1972.
IRWIN UNION BANK AND TRUST COMPANY
An Indiana Bank
By: /s/ Paul. N. Dinkins
- -------------------------
Paul N. Dinkins
Attest:
/s/ John A. Nash
- ------------------
John A. Nash, Secretary
STATE OF INDIANA
) SS:
COUNTY OF BARTHOLOMEW )
Subscribed and sworn to by Paul N. Dinkins and John A. Nash, to
me known to be the President and Secretary of Irwin Union Bank
and Trust Company- upon their several oaths before me, a notarv
public, this 30 day of May 1972.
/s/ Antoinette Frenzer
- ------------------------------
Antoinette Frenzer
Notary Public
My commission expires:
December 23, 1972
This instrument prepared by Stephen J. Dutton, attorney at law.
CERTIFICATE OF CONSENT TO USE OF NAME
Irwin Union Foundation, an Indiana foundation hereby consents to
the incorporation under the Indiana General Corporation Act of a
corporation having the Irwin Union Corporation; consents that
said corporation be authorized to transact business in Indiana;
and grants permission to use, and consents to the use of, the
name Irwin Union Corporation by said Indiana corporation as is
provided by the Indiana General Corporation Act (IC 1971, 23-1-2-
4).
IN WITNESS WHEREOF said Irwin Union Foundation, an Indiana
foundation, has caused this Certificate of Consent to be executed
in its proper corporate name by the officers below this day of
May, 1972.
IRWIN UNION FOUNDATION
An Indiana Foundation
By /s/ Paul N. Dinkins
- ---------------------
Paul N. Dinkins President
ATTEST:
/s/ James A. Joseph
- ----------------------------
James A. Joseph, Secretary
STATE OF INDIANA
SS:
COUNTY OF BARTHOLOMEW
Subscribed and sworn to by Paul N. Dinkins and James A. Joseph,
to me known to be the President and Secretary of Irwin Union
Foundation upon their several oaths before me, a Notary Public,
this, day of May, 1972.
/s/ Antoinette Frenzer
- ----------------------
Antoinette Frenzer
My Commission Expires:
December 23, 1972
This instrument prepared by Stephen J. Dutton, attorney at law.
ARTICLES OF INCORPORATION
IND. SECRETARY OF STATEOF
IRWIN UNION CORPORATION
Irwin Union Corporation (hereinafter referred to as the
"Corporation") existing pursuant to the Indiana Business
Corporation Law, desiring to give notice of corporate action
effectuating amendment of certain provisions of its Articles of
Incorporation, sets forth the following facts:
ARTICLE I
AMENDMENT
Section 1. The date of incorporation of the Corporation is May
31, 1972.
Section 2. The name of the Corporation following this amendment
is Irwin Union Corporation.
Section 3. The exact text of Article V, Section 1 and Section
5.20 of the Articles of Incorporation is now as follows:
Section 1. Number. The number of shares which the Corporation
has the authority to issue is 1,550,000 shares consisting of
1,500,000 Common Shares with a par due of $5 par share, and
50,000 preferred shares without par value.
Section 5.20. Classes. The authorized shares of the Corporation
(the "Shares") shall be divided into two classes consisting of
1,500,000 Common Shares, par value $5, (the "Common Shares") and
50,000 preferred shares without par value (the "Preferred
Shares").
Section 4. The Amendment was adopted by the shareholders of the
Corporation on March 22, 1989, and are to be effective upon the
filing of these Articles of Amendment.
ARTICLE II
MANNER OF ADOPTION AND VOTE
The designation (i.e. common, preferred and any classification
where different classes of stock exists), number of outstanding
shares, number of votes entitled to be -cast by each voting group
entitled to vote separately on the amendment and the number of
votes of each voting group represented at the meeting is set
forth below:
Designation of Voting Group Common
Number of Outstanding Shares 630,007
Number of Votes Entitled to be Cast 630,007
Number of Votes Represented at Meeting 522,899
Shares Voted in Favor 512,798
--------
Shares Voted Against 9,238
IN WITNESS WHEREOF, the undersigned officer executes these
Articles of Amendment of the Articles of Incorporation of the
Corporation, and verifies subject to the penalties of perjury
that the facts contained herein are true, this 10 day of May,
1989.
IRWIN UNION CORPORATION
/s/ Matthew F. Souza
- ---------------------------
Matthew F. Souza, Secretary
This instrument was prepared by Stephen J. Hackman, Attorney at
Law, ICE MILLER DONADIO & RYAN, One American Square, Box 82001,
Indianapolis, Indiana 46282-0002.
Exhibit 3(d)
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
Irwin Union Corporation
The above corporation (hereinafter referred to as the
Corporation existing pursuant to the Indiana Business Corporation
Law. desiring to give notice of corporate action effectuating
amendment of certain provisions of its Articles of Incorporation,
sets forth the following facts:
ARTICLE I - AMENDMENT(S)
Section 1: Date of Incorporation: May 31, 1972
Section 2: The name of the Corporation following this amendment:
Irwin Financial Corporation
Section 3: The exact text of Article(s) see attached of the
Articles of Incorporation is now as follows (attach additional
pages it necessary).
Date of each Amendment's Adoption: August 21, 1990
Section 4: (Complete this section only if amendments provides
for an exchange, reclassification or cancellation of issued
shares and provisions for implementing the amendment are not
contained in the amendment itself.
Provisions for implementing the exchange, reclassification or
cancellation of issued shares are set forth below (Attach
additional sheets if necessary):
N/A
ARTICLE 11 - MANNER OF ADOPTION AND VOTE
SECTION 1: Shareholder vote not required.
The amendment(s) was/were adopted by the incorporators or board
of directors without shareholder action and shareholder action
was not required.
SECTION 2: Vote of Shareholders.
The designation (i.e. common, preferred and any classification
were different classes of stock exists). number of outstanding
shares. number of votes entitled to be Cast by each voting group)
entitled to vote separately on the amendment and the number of
votes of each voting group represented at the meeting is set
forth below: see attached.
DESIGNATION OF EACH VOTING GROUP.
NUMBER OF OUTSTANDING SHARES:
NUMBER OF VOTES ENTITLED TO BE CAST:
NUMBER OF VOTES REPRESENTED AT THE MEETING:
SHARES VOTED IN FAVOR.
SHARES VOTED AGAINST:
In Witness Whereof, the undersigned being Vice President and
Secretary of said Corporation executes these Articles of
Amendments of the Articles of Incorporation and verifies.
subject to penalties of perjury that the statements contained
herein are true, this 4th day of September, 1990.
/s/ Matthew F. Souza Matthew F. Souza
Signature Printed
ARTICLE I
AMENDMENT
Section 1. The date of incorporation of the Corporation is May
31, 1972.
Section 2. The name of the Corporation following this amendment
is Irwin Financial Corporation.
Section 3. The exact text of Article I of the Articles of
Incorporation is now as follows:
Name. The name of the Corporation is Irwin Financial
Corporation.
Section 4. The Amendment was adopted by the shareholders of the
Corporation on August 21, 1990, and are to be effective upon the
filing of these Articles of Amendment.
ARTICLE II
MANNER OF ADOPTION AND VOTE
The designation (i.e. common,, preferred and any classification
where different classes of stock exists), number of outstanding
shares, number of votes entitled to be cast by each voting group
entitled to vote separately on the amendment and the number of
votes of each voting group represented at the meeting is set
forth below:
Designation of voting Group Common
Number of outstanding shares: 934,780
Number of votes entitled to be cast: 934,780
Number of votes represented at the
meeting: 713,402
Shares voted in favor: 701,376
Shares voted against: 10,175
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to em at this office, Articles
of Amendment for:
Irwin Financial Corporation
and said Articles of Amendment have been prepared and signed in
accordance with the provisions of the Indiana Business
Corporation Law, as amended.
NOW, THEREFORE, I JOSEPH H. HOGSETT, Secretary of State of
Indiana, hereby certify that I have this day filed said articles
in this office.
The effective date of these Articles of Amendment is April 30,
1992.
IN Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
Thirtieth day of April, 1992.
JOSEPH H. HOGSETT, Secretary of State
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
The undersigned officers of Irwin Financial Corporation
(hereinafter referred to as the "Corporation") existing pursuant
to the provisions of: Indiana Business Corporation Law
as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment of certain
provisions of Articles of Incorporation, certify the following
facts:
ARTICLE I Amendment(s)
SECTION I The date of incorporation of the corporation is: May
31, 1972
SECTION 2 The name of the corporation following this amendment to
the Articles of Incorporation is: same as above
SECTION 3
The exact text of Article(s): V Section 1 Number of the Articles
of Incorporation now as follows:
The number of shares which the Corporation has the authority to
issue is 7,550,000 shares consisting of common shares with a par
value of $5 per share, and 50,000 preferred shares without par
value.
SECTION 4 Date of each amendment's adoption:
April 21, 1992
ARTICLE 11
Manner of Adoption and Vote
SECTION 1 Action by Directors:
The Board of Directors of the Corporation duly adopted a
resolution proposing to amend the terms and provisions of
Article(s) of the Articles of Incorporation directing a meeting
of the Shareholders, to be held on allowing such Shareholders to-
vote on the proposed amendment.
The resolution was adopted by (Select appropriate paragraph)
(a)Vote of the Board of Directors at a meeting held on ______ at
which a quorum of such Board was present.
(b) Written consent executed on --------, and signed by all
member of the Board of Directors.
SECTION 2 Action by Shareholders:
The Shareholders of the Corporation entitled to vote in respect
of the Articles of Amendment adopted the proposed amendment.
The amendment was adopted by: (Select appropriate paragraph)
(a) Vote of such Shareholders during the meeting called by the
Board of Directors. The result of such vote is as follows:
TOTAL
SHAREHOLDERS ENTITLED TO VOTE. 1,417,891
SHAREHOLDERS VOTED IN FAVOR: 1,211,029
SHAREHOLDERS VOTED AGAINST. 10,668
(b) Written consent executed on __________19 and signed by all
such Shareholders
SECTION 3 Compliance with Legal requirements.
The manner of the adoption of the Articles of Amendment and the
vote by which they were adopted constitute full legal compliance
the provisions of the Act. the Articles of Incorporation, and the
By-Laws of the Corporation.
I hereby verify subject to the Penalties of perjury that the
statements contained are true this
/s/ Matthew F. Souza
- -------------------------
Vice President and Secretary
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to them at this office,
Articles of Amendment for:
Irwin Financial Corporation
and said Articles of Amendment have been prepared and signed in
accordance with the provisions of the Indiana Business
Corporation Law, as amended.
NOW, THEREFORE, I JOSEPH H. HOGSETT, Secretary of State of
Indiana, hereby certify that I have this day filed said articles
in this office.
The effective date of these Articles of Amendment is April 28,
1994.
IN Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
Twenty-eighth day of April, 1994.
/s/ JOSEPH H. HOGSETT
- -------------------------------
JOSEPH H. HOGSETT, Secretary of State
By /s/ Peggy Runes
- ----------------------------
Peggy Runes, Deputy
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
The undersigned officers of IRWIN FINANCIAL CORPORATION
(hereinafter referred to as the "Corporation") existing pursuant
to the provisions of:
(Indicate appropriate act)
Indiana Business Corporation Law
as amended (hereinafter referred to as the "Act"), desiring to
give notice of corporate action effectuating amendment certain
provisions of Articles of Incorporation, certify the following
facts:
ARTICLE I Amendment(s)
SECTION 1 The date of incorporation of the corporation is: May 31, 1972
SECTION 2 The name of the corporation following this amendment to the
Articles of Incorporation is:
same as above
SECTION 3
The exact text of Article(s) V., Section 1. Number of the
Articles of Incorporation
now as follows:
The number of shares which the Corporation has the authority to
issue is 7,550,000 shares consisting of 7,500,000 common shares
without par value, and 50,000 preferred shares without par value.
SECTION 4 Date of each amendment's adoption:
April 26, 1994
ARTICLE II Manner of Adoption and Vote
Section 1 Action by Directors:
The Board of Directors of the Corporation duly adopt a resolution
proposing to amend the terms and provisions of Articles ---------
- - of the Articles of Incorporation such Shareholders to vote on
the proposed amendment.
The resolution was adopted by: (Select appropriate paragraph)
(a) Vote of the Board of Directors at a meeting held on ---------
- ---- 19--
at which a quorum of such Board was present.
(b) Written consent executed on ------------------ 19-- and
signed by ail members
the Board of Directors.
The Shareholders of the Corporation entitled to vote in respect
of the Articles of Amendment adopted the Proposed amendment.
The amendment was adopted by: (Select appropriate paragraph)
(a)
(a) Vote of such Shareholders during the meeting called by the
Board of Directors. The result of such vote is as follows:
SHAREHOLDERS ENTITLED TO VOTE: 5,833,135
SHAREHOLDERS VOTED IN FAVOR: 4,986,081
SHAREHOLDERS VOTED AGAINST: 27,183
(b) Written consent executed on -------------- and signed by all
such Shareholder of the adoption of the Articles of Amendment and
the vote by which they were adopted constitute full legal
Compliance of the Act, the Articles of Incorporation, and the By-
Laws of the Corporation.
I hereby verify subject to the penalties of perjury that the
statements contained are true the 27th day of April, 1994.
/s/ Matthew F. Souza Matthew F. Souza
Signature Printed Name
Officer's Title: Vice President and Secretary
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles
of Amendment for:
IRWIN FINANCIAL CORPORATION
and said Articles of Amendment have been prepared and signed in
accordance with the provisions of the Indiana Business
Corporation Law, as amended.
NOW, THEREFORE, I, SUE ANNE GILROY, Secretary of State of
Indiana, hereby certify that I have this day filed said articles
in this office.
The effective date of these Articles of Amendment is May 02,
1996.
In Witness Whereof, I have hereunto set my hand and affixed the
seal of the State of Indiana, at the City of Indianapolis, this
Second day of May, 1996.
/s/ Sue Anne Gilroy
- --------------------------
SUE ANNE GILROY, Secretary of State
JB
- ---------------------------
Deputy
ARTICLES OF AMENDMENT OF THE ARTICLES OF INCORPORATION
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation
Irwin Financial Corporation
The undersigned officers of: Irwin Financial Corporation
(hereinafter referred to as the "Corporation") existing pursuant
to the provisions of: (indicate appropriate act) Indiana Business
Corporation Law as amended
(hereinafter referred to as the 'Act'), desiring to give notice
of corporate action effectuating amendment of certain provisions
of its Articles of Incorporation, certify the following facts:
Article I Amendment(s)
SECTION 1 The date of incorporation of the Corporation is: May
31, 1972
SECTION 2 The name of the Corporation following this amendment to
the Articles of Incorporation is: same as above
SECTION 3
The exact text of Article(s) V. Section 1. Number of
Incorporation is now as follows:
The number of shares which the Corporation has the authority to
issue is
of the Articles 40,050,000 shares consisting of 40,000,000 common
shares without par value, and 50,000 preferred shares without par
value.
SECTION 4 Date of each amendment's adoption: April 30, 1996
ARTICLE 11 Manner of Adoption and Vote
SECTION I This amendment was adopted by the Board of Directors or
incorporators and shareholder action was not required.
SECTION 2 The shareholders of the Corporation entitled to vote in
respect to the amendment adopted the proposed amendment. The
amendment was adopted by:
A. Vote of such shareholders during a meeting called by the
Board of Directors. The result of such vote is as follows:
Shares entitled to vote. 5,670,586
Number of shares represented at the meeting.5,296,068
Shares voted in favor. 4,928,818
Shares voted against. 344,339
B. Written consent executed on 19 and signed
by all such shareholders.
ARTICLE III Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and the
vote by which they were adopted constitute full legal compliance
with tne provisions of the Act, the Articles of Incorporation,
and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the
statements contained herein are true, this lst day of May, 1996
/s/ Matthew F. Souza
- ------------------------------
Matthew F. Souza
Vice President and Secretary
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation Irwin Financial Corporation
Date of Incorporation May 31, 1972
The undersigned officers above referenced Corporation
(hereinafter referred to as the 'Corporation") existing pursuant
to the provisions of. (Indicate appropriate act)
X Indiana Business Corporation Law as amended (hereinafter
referred to as the "Act"), desiring to give notice of corporate
action effectuating amendment of certain provisions of its
Article of Incorporation, certify the following facts:
ARTICLE I
The exact text of Article(s) V., Section I of the Articles
(NOTE. if amending the name of corporation, write Article
'I' in space above and write, "The name of the Corporation
is below.)
"Section 1. Number and Classes of Shares.' The total number
of shares, which the Corporation shall have the authority to
issue, is 44,000,000 shares. The total authorized shares of
the Corporation shall be divided into two classes: a class of
up to 40,000,000 Common Shares without par value (the 'Common
Shares") and a class of up to 4,000,000 Preferred Shares
without par value (the "Preferred Shares"). The Common
Shares and the Preferred Shares are collectively referred to
herein as the "Shares."
ARTICLE II
Date of each amendments adoption: April 29, 1999
ARTICLE III Manner of Adoption and Vote
Mark applicable section: NOTE - Only in limited situations does
Indiana law permit an Amendment without shareholder approval.
Because a name change requires shareholder approval, Section 2
must be marked and either A or B completed.
SECTION 1 This amendment was adopted by the Board of Directors or
incorporators and shareholder action was not required.
X SECTION 2 The shareholders of the Corporation entitled to vote
in respect to the amendment adopted the proposed
amendment. The amendment was adopted by: (Shareholder
approval may be by either A or B.)
A. Vote of such shareholders during a meeting called by
the Board of Directors. The result of such vote is as
follows:
21689574 Shares entitled to vote.
19149002 Number of shares represented at the meeting.
15586607 Shares voted in favor.
2023197 Shares voted against.
B. Unanimous written consent executed on _______ 19__
and signed by all shareholders entitled to vote.
ARTICLE IV Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and
the vote by which they were adopted constitute full legal
compliance with the provisions of the Act, the Articles of
Incorporation, and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the
statements contained herein are true, this 3rd day of May,
1999
Signature of current officer or chairman of the board
Printed name of officer or chairman of the board Matthew F.
Souza
Signature's title /s/ Matthew F. Souza
Secretary
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF:
Name of Corporation Irwin Financial Corporation
Date of Incorporation May 31, 1972
The undersigned officers above referenced Corporation
(hereinafter referred to as the 'Corporation") existing pursuant
to the provisions of. (Indicate appropriate act)
X Indiana Business Corporation Law as amended (hereinafter
referred to as the "Act"), desiring to give notice of corporate
action effectuating amendment of certain provisions of its
Article of Incorporation, certify the following facts:
ARTICLE I
The exact text of Article(s) V., Section 2, 5.20 of the Articles
(NOTE. if amending the name of corporation, write Article
'I' in space above and write, "The name of the Corporation
is below.)
Section Deleted.
ARTICLE II
Date of each amendments adoption: April 29, 1999
ARTICLE III Manner of Adoption and Vote
Mark applicable section: NOTE - Only in limited situations does
Indiana law permit an Amendment without shareholder approval.
Because a name change requires shareholder approval, Section 2
must be marked and either A or B completed.
SECTION 1 This amendment was adopted by the Board of Directors or
incorporators and shareholder action was not required.
X SECTION 2 The shareholders of the Corporation entitled to vote
in respect to the amendment adopted the proposed
amendment. The amendment was adopted by: (Shareholder
approval may be by either A or B.)
A. Vote of such shareholders during a meeting called by
the Board of Directors. The result of such vote is as
follows:
21689574 Shares entitled to vote.
19149002 Number of shares represented at the meeting.
18987492 Shares voted in favor.
81949 Shares voted against.
B. Unanimous written consent executed on _______ 19__
and signed by all shareholders entitled to vote.
ARTICLE IV Compliance with Legal Requirements
The manner of the adoption of the Articles of Amendment and
the vote by which they were adopted constitute full legal
compliance with the provisions of the Act, the Articles of
Incorporation, and the By-Laws of the Corporation.
I hereby verify, subject to the penalties of perjury, that the
statements contained herein are true, this 3rd day of May,
1999
Signature of current officer or chairman of the board
Printed name of officer or chairman of the board Matthew F.
Souza
Signature's title /s/ Matthew F. Souza
Secretary
IRWIN FINANCIAL CORPORATION
EMPLOYEES' STOCK PURCHASE PLAN III
WITNESSETH:
WHEREAS, Irwin Financial Corporation ("Corporation") desires
to provide eligible employees of the Corporation and certain
affiliated companies with an opportunity to acquire a proprietary
interest in the Corporation through the purchase of Common Shares
of the Corporation; and
WHEREAS, the Corporation desires to offer further inducement
to eligible employees to remain as employees by providing a form
of additional compensation, for services which the employees have
rendered or will hereafter render, through the purchase of Common
Shares at a discounted rate.
NOW, THEREFORE, the Corporation hereby establishes this
employee stock purchase plan pursuant to the provisions of
section 423 of the Internal Revenue Code of 1986, as amended, as
follows:
ARTICLE I
ESTABLISHMENT OF PLAN
The 1999 Irwin Financial Corporation Employees' Stock
Purchase Plan (the "Plan") is hereby established effective as of
the date the registration of the Common Shares to be issued
hereunder is declared effective by the Securities and Exchange
Commission, provided however, that this Plan shall not become
effective unless it has received the approval of the holders of a
majority of the issued and outstanding Common Shares of the
Corporation who are either present or represented and are
entitled to vote at a meeting of shareholders of the Corporation
duly held within twelve (12) months before or after the date the
Plan is adopted by the Board of Directors.
ARTICLE II
DEFINITIONS AND CONSTRUCTION
Section 2.01. Definitions. When the initial letter of
a word or phrase is capitalized, the meaning of such word or
phrase shall be as follows:
(a) "Account" means the record of a Participant's interest
in the Plan, as maintained by the Committee or its designee
pursuant to Section 7.01(c), consisting of the sum of the
Participant's payroll deductions under the Plan, the deduction of
the amounts expended on behalf of the Participant to exercise his
or her options under the Plan, the credit of the number of
Common Shares (including fractional shares) purchased under the
Plan for the Participant and held by the Custodian and the
amounts, if any, carried forward on behalf of the Participant
from one Date of Exercise to the next Date of Exercise.
(b) "Affiliate" means a corporation which is a parent or
subsidiary of the Corporation, or a corporation or a parent or
subsidiary corporation of such corporation issuing or assuming an
option in a transaction to which Code Section 425(a) applies.
(c) "Board of Directors" means the board of directors of
the Corporation as it shall exist from time to time.
(d) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Committee" means the committee appointed by the Board
of Directors under Section 7.01 to administer the Plan.
(f) "Common Shares" means the Common Shares of the Corporation.
(g) "Corporation" means Irwin Financial Corporation, an Indiana
corporation, and its successors and assigns.
(h) "Custodian" means any party designated by the Board of
Directors pursuant to Section 7.02 to act as custodian under the
Plan.
(i) "Date of Exercise" means the first business day
following a Payday and/or such other date or dates as may be
established by the Committee as a date upon which options granted
under the Plan are to be exercised.
(j) "Effective Date" means the effective date of this Plan,
which is the date the registration under the Securities Act of
1933, as amended, of Common Shares to be issued hereunder is
declared effective by the Securities and Exchange Commission.
(k) "Eligible Employee" means any person employed by the
Corporation as a common law employee or any of its Affiliates
except for:
(1) employees who have been employed less than six
months (other than former Participants re-employed by the
Company);
(2) employees who customary employment is less than
twenty (20) hours per week; and
(3) employees whose customary employment is for not
more than five (5) months in any calendar year.
(l) "Option Price" means the price to be paid by
Participants upon the exercise of options granted under this
Plan, determined as provided in Section 5.02.
(m) "Participant" means an Eligible Employee who (i)
authorizes the Corporation or an Affiliate to make payroll
deductions from Plan Compensation for the purpose of purchasing
Common Shares pursuant to the Plan, (ii) has commenced
participation in the Plan pursuant to Section 3.01, and (iii) has
not incurred a voluntary or involuntary withdrawal, pursuant to
Article VI or Section 7.04 since his or her most recent
commencement of participation pursuant to Section 3.01.
(n) "Payday" means the date on which an Eligible Employee
receives any Plan Compensation.
(o) "Plan" means the 1999 Irwin Financial Corporation
Employees' Stock Purchase Plan, as amended from time to time.
(p) "Plan Compensation" means all cash payments made by the
Corporation or any Affiliate to an Employee through its payroll
system for services as an employee including, without limitation,
wages, salary, incentive compensation, bonuses and profit sharing
payments.
(q) "Section," when not preceded by the word "Code," means
a section of this Plan.
Section 2.02. Construction and Governing Law
(a) This Plan shall be construed, enforced and administered
and the validity thereof determined in accordance with the Code
and the regulations thereunder, and in accordance with the laws
of the State of Indiana when such laws are not inconsistent with
the Code.
(b) This Plan is intended to qualify as an employee stock
purchase plan under Code Section 423 and the regulations
thereunder. The provisions of the Plan shall be construed so as
to fulfill this intention.
ARTICLE III
PARTICIPATION
Section 3.01. Participation.
(a) Any person who is an Eligible Employee on the Effective
Date may become a Participant in the Plan as of the first Payday
after the Effective Date, by completing and delivering to the
Committee such forms as the Committee shall require to authorize
payroll deductions and to request participation in the Plan,
within the time period established by the Committee.
(b) After the Effective Date, an Eligible Employee who is
not a participant may become a Participant in the Plan as of the
first day of a calendar quarter, by completing and returning to
the Committee at least thirty (30) days before such date such
forms as the Committee shall require to authorize payroll
deductions and request participation in the Plan.
Section 3.02. Payroll Deductions.
(a) Payroll deductions for a Participant shall commence on
the first Payday after an Eligible Employee becomes a Participant
and shall continue until the earlier of (i) the termination of
the Plan or (ii) the date the Participant suspends his or her
payroll deductions or ceases participation pursuant to subsection
(b) of this Section 3.02. Each Participant shall authorize his
or her employer to make deductions from his or her Plan
Compensation on each Payday during the time he or she is a
Participant in the Plan in a specified whole dollar amount;
provided, however, the minimum amount of the payroll deduction
authorized by the Participant must be at least $5.00 per Payday.
(b) A Participant may suspend or change his or her payroll
deduction in the Plan effective as of any Payday by filing
written notice with the Committee at least ten (10) days prior to
such Payday. A Participant's suspension of his or her payroll
deductions shall not automatically result in his or her
withdrawal from participation in the Plan.
Section 3.03. Participant's Account. On each Payday, the
Corporation or its Affiliate, as the case may be, shall deduct
the authorized amount from each Participant's Plan Compensation
and shall credit the Account of each Participant with the amount
of the Participant's payroll deduction under the Plan effective
as of the Payday on which it was deducted.
ARTICLE IV
COMMON SHARES
The shares subject to options granted under this Plan shall
be Common Shares. The total number of Common Shares on which
options may be granted under this Plan shall not exceed in the
aggregate Seven Hundred Fifty Thousand (750,000) Common Shares,
except as such number of Common Shares shall be adjusted in
accordance with Section 8.01 of this Plan. Common Shares
required to satisfy purchases pursuant to the Plan may be
provided out of the Corporation's treasury shares or its
authorized and unissued Common Shares.
ARTICLE V
GRANTING AND EXERCISE OF OPTIONS
Section 5.01. Grant of Options.
(a) On each Payday, there shall be granted automatically by
the Corporation to each Participant, except those identified in
subsection (b) of this Section 5.01, an option to purchase on the
next succeeding Date of Exercise at the Option Price such number
of the Common Shares, including fractional shares, reserved for
issuance pursuant to this Plan as the balance in such
Participant's Account on such Date of Exercise enables him or her
to purchase.
(b) Notwithstanding any provision in this Plan to the
contrary, no Participant shall be granted an option:
(1) if the Participant, immediately after the option
is granted, would own shares possessing five percent (5%) or more
of the total combined voting power or value of all classes of
shares of the Corporation or its Affiliates, provided that (i)
the rules of Code Section 425(d) shall apply in determining the
share ownership of an individual, and (ii) shares which the
Participant may purchase under outstanding options shall be
deemed to be owned by the Participant; or
(2) which permits his or her rights to purchase shares
under all employee stock purchase plans of the Corporation and
its Affiliates to accrue at a rate which exceeds Twenty-five
Thousand Dollars ($25,000) of fair market value of Common Shares
(determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
Section 5.02. Option Price. The option price for
Common Shares purchased as of each Date of Exercise shall be
eighty-five percent (85%) of the closing price of the Common
Shares as reported by the National Association of Securities
Dealers Automated Quotation/National Market System ("Nasdaq/NMS")
for the last trading day prior to such Date of Exercise or, if
not so reported, as reported by such other source as the
Committee shall designate.
Section 5.03. Exercise of Option; Limitations. As of each
Date of Exercise, each Participant's option to purchase Common
Shares shall be exercised automatically for his or her Account.
The Participant shall purchase the number of shares, including
fractional shares, which the amount of cash credited to his or
her Account on that Date of Exercise shall enable him or her to
purchase at the Option Price. As soon as administratively
reasonable after each Date of Exercise, the Corporation shall
notify the Custodian of the number of Common Shares purchased for
the Account of each Participant on such Date of Exercise.
Section 5.04. Interest in Shares. A Participant shall have
no interest in or rights as a shareholder with respect to Common
Shares subject to an option granted under this Plan until such
option has been exercised and the number of Common Shares
purchased has been credited to the Participant's Account. Upon
written request directed to the Committee, a Participant shall be
entitled to receive a certificate representing the number of
whole Common Shares and/or cash in lieu of any fractional shares
credited to the Participant's Account. Upon receipt of any such
request, the Committee shall promptly direct the Custodian to
distribute such certificates, if any, and the Corporation to pay
such cash, if any, to the Participant.
Section 5.05. Fractional Shares. A Participant shall be
entitled to participate in any dividend or other distribution
with respect to any fractional share credited to the
Participant's Account, but shall have no right to vote any
fractional share. No certificates will be issued representing
fractional shares purchased pursuant to the Plan. Upon a
Participant's withdrawal from the Plan under Article VI or
Section 7.04 or upon the Committee's receipt of a request to
issue certificates pursuant to Section 5.04, there shall be paid
in lieu of any fractional share held in a Participant's Account
an amount in cash equal to the product of (i) the amount of the
fraction, multiplied by (ii) the closing price of the Common
Shares as reported by the NASDAQ/NMS for the effective date of
the Participant's withdrawal from the Plan or the date on which
the Committee receives the request pursuant to Section 5.04,
whichever applies.
ARTICLE VI
WITHDRAWAL
Section 6.01. Voluntary Withdrawal. A Participant may
withdraw from participation in the Plan as of any Payday by
delivering written notice to the Committee at least ten (10) days
prior to such Payday. The Committee shall promptly notify the
Custodian of the withdrawal of any Participant. As soon as
administratively reasonable after the effective date of a
Participant's withdrawal from the Plan, the Corporation shall
cause the balance of the Participant's Account, including without
limitation certificates representing the number of whole Common
Shares therein and cash in lieu of any fractional shares, to be
paid to him or her. A Participant's withdrawal from
participation in the Plan shall not prevent his or her further
participation in the Plan. Any Eligible Employee who withdraws
from the Plan shall be entitled to resume payroll deductions and
become a Participant as of the next quarterly enrollment period,
as provided in Section 3.01(b).
Section 6.02. Involuntary Withdrawal. Upon termination of
a Participant's employment with the Corporation or its Affiliates
for any reason, including resignation, discharge, disability or
retirement, the balance of the Participant's Account, including
without limitation certificates representing the number of whole
Common Shares therein and cash in lieu of any fractional shares,
shall be paid to him or her, or, in the case of his or her death,
to his or her beneficiary as provided in Section 6.04. The
Corporation shall cause such amount to be paid as soon as
administratively reasonable after such termination of employment.
Section 6.03. Interest. No interest shall be payable in
amounts held in a Participant's Account, or on amounts payable to
a Participant or a beneficiary.
Section 6.04. Participant's Beneficiary
(a) A Participant may file with the Committee a written
designation of a beneficiary who is to receive any Common Shares
or cash credited to the Participant's Account under the Plan in
the event of the Participant's death. Such designation of
beneficiary may be changed by the Participant at any time by
written notice.
(b) On the death of a Participant, and on receipt by the
Committee of reasonable proof of the identity and existence of
the Participant's designated beneficiary, the Corporation shall
cause the shares or cash provided in Section 6.04(a), if any, to
be delivered to such beneficiary as soon as administratively
reasonable. If a Participant dies without a surviving designated
beneficiary, the Corporation shall cause such shares or cash to
be delivered to the estate or a representative of the estate of
the Participant.
(c) No designated beneficiary, and no heir or beneficiary
of the estate, of a deceased Participant shall acquire any
interest in the Common Shares or cash credited to the
Participant's Account under the Plan prior to the death of the
Participant.
ARTICLE VII
PLAN ADMINISTRATION
Section 7.01. Administrative Committee.
(a) The Plan shall be administered, at the expense of the
Corporation, by the Committee. The Committee shall consist of
not less than three (3) members, who shall be appointed by the
Board of Directors. Each member of the Committee shall be either
a director, officer or employee of the Corporation. Each member
of the Committee shall serve until removed by the Board of
Directors and such removal may be without cause and without
advance notice.
(b) The Committee shall be vested with full authority to
make, administer and interpret such rules and regulations as it
deems necessary to administer the Plan. Any determination,
decision or action of the Committee in connection with the
construction, interpretation, administration, or application of
the Plan shall be final, conclusive and binding on all
Participants, beneficiaries and any and all other persons
claiming under or through any Participant.
(c) The Committee shall keep or cause to be kept accurate
and detailed accounts of all contributions, receipts,
disbursements and purchases of Common Shares, and all accounts,
books and records relating thereto shall be open to inspection
and audit at all reasonable times by any person designated by the
Board of Directors or the Committee.
Section 7.2. Custodian
(a) The Board of Directors, in its sole discretion, shall
appoint a Custodian. The custodian may, but need not, be an
Affiliate of the Corporation. The Custodian may be removed by
the Board of Directors at any time with thirty (30) days prior
notice in writing to the Custodian.
(b) The Custodian shall maintain complete and accurate
records of the number of whole and fractional shares in each
Participant's Account and shall deliver certificates
representing such whole shares to the Participant upon receipt
of written direction from the Committee.
Section 7.03. Registration of Shares; Dividends
(a) Common Shares purchased for a Participant's Account
under this Plan may, in the discretion of the Custodian, be
registered in the name of its nominee. The certificates for
Common Shares to be delivered to Participants under the Plan
shall be registered in the name of the Participant or, if the
Participant so directs by written notice delivered to the
Committee at least ten (10) days prior to the Date of Exercise,
in the names of the Participant and one other person designated
by the participant, as joint tenants with rights of survivorship,
to the extent permitted by applicable law. The Committee shall
timely notify the Custodian of its receipt of any such written
notice.
(b) All dividends paid with respect to the whole and
fractional shares in a Participant's Account shall be credited to
his or her Account and used to purchase Common Shares on the next
Date of Exercise.
Section 7.04. Transferability. Neither payroll deductions
credited to a Participant's Account nor any rights with regard to
the exercise of an option or to receive Common Shares under the
Plan may be assigned, transferred, pledged, or otherwise disposed
of in any way by the Participant, except with respect to the
death of the Participant as provided in Sections 6.02 and 6.04 or
pursuant to a qualified domestic relations order as defined by
the Code, Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder. Any such attempted
assignment, transfer, pledge, or other disposition shall be
without effect, except that the Committee, in it sole discretion,
may treat such act as an election to withdraw from the Plan.
Section 7.05. Separate Accounting for Payroll Deductions.
No payroll deductions received or held by the Corporation or any
Affiliate under this Plan may be used by the Corporation or the
Affiliate for any corporate purpose, and the Corporation and the
Affiliate shall separately account for such payroll deductions.
Section 7.06. Only Employees Eligible to Participate.
Notwithstanding any other provision of this Plan, to be eligible
to exercise an option a Participant shall be an employee of the
Corporation or its Affiliates at all times during the period
beginning with the date the option is granted and ending on the
Date of Exercise.
Section 7.07. Equal Rights and Privileges. Notwithstanding
any other provision of the Plan, all Eligible Employees shall
have the same rights and privileges under the Plan, as required
by Code Section 423 and the regulations thereunder, and the
Committee shall administer the Plan and interpret and apply the
provisions of the Plan accordingly.
Section 7.08. Claims Procedures.
(a) Any person who believes that he or she is entitled to
any benefits under this Plan shall present such claim in writing
to the Committee. The Committee shall within sixty (60) days
provide adequate notice in writing to any claimant as to the
decision on any such claim. If such claim has been denied, in
whole or in part, such notice shall set forth: (i) the specific
reasons for such denial; (ii) specific reference to any pertinent
provisions of the Plan on which denial is based; (iii) a
description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why
such material or information is necessary; and (iv) an
explanation of the Plan's review procedure. Such notice shall be
written in a manner calculated to be understood by the claimant.
Within sixty (60) days after receipt by the claimant of
notification of denial, the claimant shall have the right to
present a written appeal to the Committee. If such appeal is not
filed within said sixty (60) day period, the decision of the
committee shall be final and binding. The Committee shall act as
a fiduciary in making a full and fair review of such denial. The
claimant or his or her duly authorized representative may review
any Plan documents, which are pertinent to the claim and may
submit issues and comments to the Committee in writing.
(b) A decision by the Committee shall be made promptly, and
in any event not later than sixty (60) days after its receipt of
the appeal, provided, however, if the Committee decides a hearing
at which the claimant or his or her duly authorized
representative may be present is necessary and such a hearing is
held, such decision shall be rendered as soon as possible, but no
later than one hundred twenty (120) days after its receipt of the
appeal. Any such decision of the Committee shall be in writing
and provide adequate notice to the claimant setting forth the
specific reasons for any denial and written in a manner
calculated to be understood by a Participant. Any such decision
by the Committee shall be final.
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.01. Recapitalization. The aggregate number of
Common Shares which may be issued hereunder shall be
proportionately adjusted for any increase or decrease in the
number of issued and outstanding Common Shares resulting from a
subdivision or consolidation of shares of the Corporation or any
other capital adjustment of the Corporation, the payment of a
share dividend, a share split or any other increase or decrease
in the Common Shares effected without receipt of consideration by
the Corporation. In the event that, prior to the purchase of all
of the Common Shares provided for herein, there shall be a
capital reorganization or reclassification of the capital of the
Corporation resulting in a substitution of other shares for the
common shares, there shall be substituted the number of
substitute shares which would have been issued pursuant to the
option in exchange for the Common Shares then subject to the
option as if such Common Shares had been then issued and
outstanding.
Section 8.02. Amendment and Termination.
(a) Except as provided in subsection (c) of this Section
8.02, the Board of Directors of the Corporation, except any
members participating in the Plan, may from time to time, alter,
amend, suspend or discontinue the Plan with respect to any Common
Shares for which an option has not been granted; provided,
however, that the Board of Directors may not, without further
approval by the holders of a majority of the issued and
outstanding Common Shares of the Corporation who are either
present or represented and are entitled to vote at a meeting of
shareholders of the Corporation:
(1) increase the maximum number of Common Shares that may be
issued under the Plan;
(2) change the class of shares, which may be issued
under the Plan;
(3) change the designation of the persons or
class of persons eligible to receive Common Shares under the
Plan; or
(4) change the provisions of Section 5.02 concerning the option
price.
(b) Unless earlier terminated by the Board of Directors
pursuant to subsection (a) of this Section 8.02, this Plan will
terminate on the Date of Exercise on which the remaining Common
Shares reserved for the grant of options under this Plan are not
sufficient to enable each Participant on such date to purchase at
least one share. No option may be granted after the termination
of the Plan.
(c) Notwithstanding the provisions of subsection (a) of
this Section 8.02, the provisions of Sections 2.01(k) defining
"Eligible Employee," Section 3.01 concerning participation in the
Plan, Section 5.01(a) concerning the timing and amount of the
options granted to Participants, and Section 5.02 concerning the
Option Price, shall not be amended more than once every six
months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Notices. All notices or other communications
by a Participant to the Committee under or in connection with the
Plan shall be deemed to have been duly given when received by the
Secretary of the Corporation, or when received in the form and at
the location or by the person specified by the Committee. Any
notices or other communications by the Committee to a Participant
under or in connection with the Plan shall be deemed to have been
duly given when mailed by the Committee to the address of the
Participant on the business records of the Corporation or its
Affiliates.
Section 9.02. No Right to Continued Employment. Neither
the establishment nor the maintenance of the Plan nor any
amendment thereof nor any act or omission under the Plan or
resulting from the operation of the Plan shall be construed as
giving any Eligible Employee the right to be retained in the
service of the Corporation or to interfere with the right of the
Corporation to discharge any Eligible Employee or any other
person at any time in its discretion.
IRWIN FINANCIAL CORPORATION
1999 OUTSIDE DIRECTOR RESTRICTED STOCK COMPENSATION PLAN
1. Purpose. The purpose of this Plan is to encourage ownership
of the Common Shares of Irwin Financial Corporation by Outside
Directors of the Corporation and its subsidiary companies in
order to provide Outside Directors with a more direct and
proprietary interest in the welfare and success of the Company
and to encourage their continuation as directors. The Plan is
further intended to increase the incentive to promote the welfare
of the Company by those who are primarily responsible for shaping
and carrying out the long-term plans and objectives of the
Company, thereby furthering and securing the Company's continued
growth and financial success.
2. Definitions. The following terms shall have the meanings
hereinafter set forth:
(a) "Affiliate" means a corporation that is a parent or
subsidiary corporation of the Company.
(b) "Board of Directors" means the board of directors of the
Company as it shall exist from time to time.
(c) "Common Shares" means the Common Shares of the Company.
(d) "Company" means Irwin Financial Corporation, an Indiana
corporation.
(e) "Director Fees" means the amounts payable to an Outside
Director for Retainer Fees and/or Meeting Fees.
(f) "Meeting Fees" means the amounts payable to an Outside
Director for his or her attendance at meetings of the Board of
Directors or of committees of the Board of Directors.
(g) "Election" means an election by an Outside Director to
receive Common Shares in payment for Meeting Fees and/or Retainer
Fees in accordance with the terms of this Plan.
(h) "Market Value" means the closing price of the Common Shares
on the last trading day prior to the effective date of an
Election, or on such other date as may be designated by the Plan
Committee, as reported by the National Association of Securities
Dealers, Inc. or, if not so reported, by such other source as the
Plan Committee shall designate.
(i) "Outside Director" means any director of the Company or an
Affiliate who is not employed by the Company or any Affiliate in
any capacity.
(j) "Plan" means this Irwin Financial Corporation 1999 Outside
Director Restricted Stock Compensation Plan.
(k) "Plan Committee" means the individual or group of
individuals appointed by the Board of Directors as the committee
responsible for administration of the Plan.
(l) "Plan Year" means the twelve month period commencing on
January 1 and ending on December 31 of each year or such other
dates as may be established by the Plan Committee from time to
time.
(m) "Retainer Fees" means the amount payable to an Outside
Director for service as a director of the Company for a fixed
period of time.
(n) "Secretary" means the Secretary of the Company.
3. Administration. The Plan shall be administered by the Plan
Committee. The Plan Committee shall have the power to interpret
and construe the provisions of the Plan, and its interpretations
and constructions shall be final and binding. The Plan Committee
may prescribe, amend and rescind rules and regulations relative
to the Plan or its construction or interpretation. The initial
Plan Committee shall have one member, who shall be the Secretary.
The Plan Committee shall not be liable for any action or
determination made in good faith.
4. Participation. All persons who are Outside Directors shall
be eligible to participate in the Plan.
5. Shares. The shares to be issued pursuant to the Plan shall
be the Company's authorized but unissued, or reacquired, Common
Shares. The total number of the Common Shares that may be issued
under the Plan shall not exceed one hundred thousand (100,000)
shares in the aggregate, subject to adjustment in accordance with
the provisions set forth in paragraph 6(e) hereof. In the event
any Common Shares represented by certificates held by the
Secretary pursuant to the Plan revert to the Company for any
reason during the term of this Plan, those Common Shares may
again be issued under the Plan. During the term of the Plan, the
Company shall reserve and keep available a sufficient number of
Common Shares to satisfy its obligations hereunder.
6. Operation of the Plan. The Plan shall operate in accordance
with and subject to the following terms and conditions:
(a) Election to Receive Common Shares. Unless an Election
is made, Director Fees shall be paid in United States
dollars. An Election may be made with respect to
Retainer Fees or Meeting Fees, or both. Except as
provided herein with respect to calendar year 1999 and
with respect to an Election relating to the calendar
year in which a person is first elected as an Outside
Director, each Election shall be effective for not less
than one calendar year but may be made for additional
calendar years subject to any limitation that may be
imposed by the Plan Committee at the time an Election
is made. In order to make an Election, an Outside
Director must deliver a written Election form to the
Plan Committee (i) within thirty (30) days following
the effective date of the Plan (to be effective as of
July 1, 1999) with respect to the Plan Year ending
December 31, 1999, (ii) within thirty (30) days
following the date of his or her first election as an
Outside Director, or (iii) at least thirty (30) days
prior to the first day of each Plan Year thereafter,
specifying the Plan Year(s) covered by the Election.
Elections, when made, are irrevocable.
(b) Determination of Number of Common Shares. The
number of Common Shares to be issued to an Outside
Director pursuant to an Election shall be the largest
number of whole shares resulting from the division of
(i) the dollar amount of the Director Fees covered by
the Election by (ii) the Market Value of one Common
Share. No fractional shares shall be issued under the
Plan and cash shall be paid in lieu thereof based upon
the Market Value of one Common Share. For purposes of
this paragraph, the dollar amount of Retainer Fees
subject to an Election covering more than one Plan Year
shall be an amount equal to the Retainer Fees
established for the first Plan Year to which the
Election applies, multiplied by the total number of
Plan Years covered by the Election. If Retainer Fees
are increased in subsequent Plan Years to which an
Election applies, the Company shall issue additional
Common Shares with respect to the increase in Retainer
Fees in accordance with the formula contained in the
paragraph, and based upon the Market Value of Common
Shares on the effective date of the increase in
Retainer Fees.
(c) Issuance of Certificates and Delivery to Outside
Director.
(i) As soon as practicable after the first day of the
first Plan Year covered by an Election with respect to
Retainer Fees, the Plan Committee shall cause the
Company to issue a share certificate, in the name of
each Outside Director making an Election with respect
to Retainer Fees, for that number of Common Shares,
determined in the manner provided in this Plan,
issuable with respect to all Plan Years covered by the
Election. The rights of the Outside Directors with
respect to Common Shares issued in payment for
Retainer Fees shall vest as of the last day of each
Plan Year covered by an Election.
(ii) As soon as practicable after the last day of each
calendar quarter of each Plan Year, the Plan Committee
shall cause the Company to issue, in the name of each
Outside Director making an Election with respect to
Meeting Fees payable for that calendar quarter, a share
certificate with respect to the number of Common Shares
determined in the manner provided in this Plan.
(iii) Each share certificate issued pursuant to
paragraph 6(c)(i) or (ii) shall be delivered to the
Secretary, who shall hold the share certificate(s) for
the benefit of the Outside Director until the
expiration of a period of one year following the last
date covered by the Election pursuant to which the
Common Shares were issued, or until such earlier date
as the Committee may determine in its discretion, at
which time the Secretary shall promptly deliver to the
Outside Director the certificate(s) representing the
Common Shares to which the Outside Director is
entitled.
(iv) If requested by an Outside Director at the time an
Election is made, share certificate(s) may be issued
jointly to the Outside Director and any other person or
persons.
(v) An Outside Director may elect to defer delivery of share
certificates until the expiration of the last Plan Year covered
by an Election. An election made pursuant to this subparagraph
shall be irrevocable.
(d) Forfeiture of Shares Issued in Payment for Retainer Fees. If
an Outside Director does not continue to serve as an Outside
Director for the entirety of each Plan Year covered by an
Election with respect to Retainer Fees, the Outside Director
shall forfeit that number of Common Shares to be issued with
respect to Retainer Fees for that Plan Year in the same
proportion that the number of full months of the Plan Year for
which the Outside Director did not serve bears to 12; for
example, if the Outside Director ceases to serve on August 15,
and there were 120 Common Shares to be issued to him or her with
respect to that Plan Year, he or she would forfeit 30 of those
Common Shares. In the event that the cessation of service is the
result of the death, disability or retirement of the Outside
Director, the Committee may waive the provisions of this
subsection, with the result that the Outside Director may receive
the Common Shares to be issued with respect to Retainer Fees for
the Plan Year in which the cessation of service occurs. Any
Common Shares forfeited in accordance with this paragraph shall
immediately revert to the Company. Any waiver of the provisions
of this subsection granted by the Committee shall not be
affected by the subsequent death or disability of the Outside
Director.
(e) Recapitalization. The aggregate number of Common Shares
which may be issued hereunder, and the number of Common Shares
subject to each outstanding Election, shall be proportionately
adjusted for any increase or decrease in the number of issued and
outstanding Common Shares resulting from a subdivision or
consolidation of shares of the Company or any other capital
adjustment of the Company, the payment of a share dividend, a
share split or any other increase or decrease in the Common
Shares effected without receipt of consideration by the Company.
(f) Nonassignability. No right to receive shares pursuant to an
Election shall be assignable or transferable except by will or
under the laws of descent and distribution.
(g) Issuance of Shares and Compliance with Securities Laws. The
Company may postpone the issuance and/or delivery of certificates
representing Common Shares until (i) the admission of such shares
to listing on any stock exchange on which shares of the Company
of the same class are then listed or the admission of such shares
for quotation in any automated inter-dealer quotation system in
which such shares are then quoted and (ii) the completion of such
registration or other qualification of such shares under any
state or Federal law, rule or regulation or the rules and
regulations of any exchange upon which the Common Shares are
traded as the Company shall determine to be necessary or
advisable, which registration or other qualification the Company
shall use its best efforts to complete. Any person acquiring
Common Shares pursuant to the Plan may be required to make such
representations and furnish such information as may, in the
opinion of counsel for the Company, be appropriate to permit the
Company, in light of the existence or non-existence with respect
to such shares of an effective registration under the Securities
Act of 1933, as amended, or any similar state statute, to issue
the shares in compliance with the provisions of those or any
comparable acts. Certificates representing Common Shares issued
pursuant to the Plan may bear such legends or other statements
concerning restrictions on the transferability of the shares as
the Company may determine to be necessary or advisable to comply
with applicable securities laws.
(h) Rights as a Shareholder.
(i) An Outside Director shall have no rights as a
shareholder with respect to Common Shares subject to an
Election until the date of issuance of a certificate
representing those shares. Upon the issuance of a
certificate, the shares represented thereby shall be fully
paid and nonassessable Common Shares of the Company, the
Outside Director shall have the power to vote those Common
Shares on all matters presented to a vote of the
shareholders of the Company and shall be entitled to receive
all dividends and other distributions declared or paid by
the Company with respect thereto. No adjustment will be made
for dividends or other rights for which the record date is
prior to the date such certificate is issued.
(ii) An Outside Director shall have no right to sell,
convey, transfer, mortgage, pledge, hypothecate, encumber or
otherwise dispose of any Common Shares issued pursuant to
the Plan during the time the certificates representing
Common Shares are held by the Secretary, other than for
transactions between the Outside Director and the Company or
any director of the Company or an Affiliate.
7. Term of Plan. If approved by the holders of majority of the
issued and outstanding Common Shares voting in person or by proxy
at the 1999 Annual Meeting of Shareholders of the Company, the
Plan shall become effective on July 1, 1999. The Plan shall
terminate on December 31, 2009, or on such earlier date as the
Board of Directors may determine. No Common Shares shall be
issued under the Plan after the termination date.
8. Amendment of the Plan. The Board of Directors, except any
members participating in the Plan, may from time to time, alter,
amend, suspend or discontinue the Plan with respect to any Common
Shares for which certificates have not been issued.
9. No Right to Reelection as a Director. Neither the adoption
of the Plan, the issuance of any Common Shares hereunder, nor any
other action taken relating to the Plan shall impose any
obligation on the Company or any Affiliate or the Board of
Directors thereof to nominate any Outside Director for reelection
as a director by the shareholders of the Company or any
Affiliate.
10. Withholdings. The Company shall have the right to require
an Outside Director to remit to the Company amounts sufficient to
satisfy any applicable withholding requirements set forth in the
Internal Revenue Code of 1986, as amended, or under state or
local law relating to Common Shares issued to that Outside
Director. The Company shall have the right, to the extent
permitted by law, to deduct from any payment of any kind
otherwise due to an Outside Director who receives Common Shares
under the Plan any federal, state or local taxes of any kind
required by law to be withheld with respect to the issuance of
those Common Shares. An Outside Director may elect to reduce the
number of Common Shares to be received by him under the Plan in
order to satisfy any federal, state or local withholding
obligation.
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000052617
<NAME> IRWIN FINANCIAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 56,960
<INT-BEARING-DEPOSITS> 28,444
<FED-FUNDS-SOLD> 1,900
<TRADING-ASSETS> 47,589
<INVESTMENTS-HELD-FOR-SALE> 26,235
<INVESTMENTS-CARRYING> 18,266
<INVESTMENTS-MARKET> 18,365
<LOANS> 613,087
<ALLOWANCE> 9,812
<TOTAL-ASSETS> 1,620,873
<DEPOSITS> 908,103
<SHORT-TERM> 384,123
<LIABILITIES-OTHER> 73,832
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48,035
0
<COMMON> 29,965
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<INTEREST-TOTAL> 62,064
<INTEREST-DEPOSIT> 11,413
<INTEREST-EXPENSE> 26,356
<INTEREST-INCOME-NET> 35,708
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<EXPENSE-OTHER> 109,934
<INCOME-PRETAX> 30,409
<INCOME-PRE-EXTRAORDINARY> 30,409
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,585
<EPS-BASIC> 0.77<F1>
<EPS-DILUTED> 0.76<F1>
<YIELD-ACTUAL> .05<F2>
<LOANS-NON> 7,652
<LOANS-PAST> 374
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<FN>
<F1>Information not in 1,000 and earnings per share reported in basic and
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<F2>Information not in 1,000.
</FN>
</TABLE>
