43
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter:
September 30, 1997
Commission File Number 0-13358
CAPITAL CITY BANK GROUP, INC.
(Exact name of registrant as specified in its charter)
Florida 59-2273542
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
217 North Monroe Street, Tallahassee, Florida 32301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(850) 671-0610
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 such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirement for the past 90 days.
Yes X No
At October 31, 1997, there were 5,835,141 shares of the Registrant's
Common Stock, $.01 par value, outstanding.
<TABLE>
CAPITAL CITY BANK GROUP, INC.
FORM 10-Q I N D E X
<CAPTION>
ITEM PART I. FINANCIAL INFORMATION PAGE NUMBER
<C> <S> <C>
1. Financial Statements 3
2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
3. Qualitative and Quantitative Disclosure of
Market Risk Not Applicable
ITEM PART II. OTHER INFORMATION
1. Legal Proceedings Not Applicable
2. Changes in Securities and Use of Proceeds Not Applicable
3. Defaults Upon Senior Securities Not Applicable
4. Submission of Matters to a Vote of
Security Holders Not Applicable
5. Other Information 16
6. Exhibits and Reports on Form 8-K 16
Signatures 16
</TABLE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF CONDITION (1)
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
September 30, 1997 December 31, 1996
(Unaudited) (Audited)
ASSETS
<S> <C> <C>
Cash and Due From Banks $ 51,520 $ 62,863
Funds Sold 18,769 26,043
Investment Securities Available-for-Sale 167,839 207,189
Loans 705,627 674,675
Unearned Interest (1,766) (2,479)
Allowance for Loan Losses (8,505) (8,179)
Loans, Net 695,356 664,017
Premises and Equipment 31,677 34,006
Accrued Interest Receivable 6,996 6,877
Intangibles 7,684 8,398
Other Assets 12,231 12,006
Total Assets $ 992,072 $1,021,399
LIABILITIES
Deposits:
Noninterest Bearing Deposits $ 187,287 $ 196,486
Interest Bearing Deposits 638,560 670,210
Total Deposits 825,847 866,696
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 31,028 28,697
Other Short-Term Borrowings 6,427 7,260
Long-Term Debt 16,440 18,072
Other Liabilities 14,048 11,174
Total Liabilities 893,790 931,899
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 par value,
3,000,000 shares authorized, no
shares outstanding - -
Common Stock, $.01 par value; 60,000,000
shares authorized; 5,835,138 shares
outstanding at September 30,1997
and 5,778,366 outstanding at
December 31, 1996 58 58
Additional Paid In Capital 6,335 4,934
Retained Earnings 91,397 84,426
Net Unrealized Gain (Loss) on
Available-for-Sale Securities,
Net of Taxes 492 82
Total Shareholders' Equity 98,282 89,500
Total Liabilities and
Shareholders' Equity $ 992,072 $1,021,399
Book Value Per Share $ 16.84 $ 15.49
</TABLE>
(1) Prior period share and per share data have been restated to
reflect a 2-for-1 stock split effective April 1, 1997.
The accompanying notes to Consolidated Financial Statements are an
integral part of these statements.
<TABLE>
CAPITAL CITY BANK GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (1)
FOR THE PERIODS ENDED SEPTEMBER 30
(UNAUDITED)
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
THREE MONTHS ENDED SEPTEMBER
1997 1996
INTEREST INCOME
<S> <C> <C>
Interest and Fees on Loans $16,542 $15,127
Investment Securities:
U.S. Treasury 904 1,153
U.S. Gov. Agencies/Corp. 684 1,070
States and Political Subdivisions 784 857
Other Securities 82 96
Funds Sold 366 716
Total Interest Income 19,362 19,019
INTEREST EXPENSE
Deposits 6,597 7,025
Federal Funds Purchased & Securities
Sold Under Repurchase Agreements 416 325
Long-Term Debt 291 299
Other Short-Term Borrowings 98 136
Total Interest Expense 7,402 7,785
Net Interest Income 11,960 11,234
Provision for Loan Losses 449 334
Net Interest Income After
Provision for Loan Losses 11,511 10,900
NONINTEREST INCOME
Service Charges on Deposit Accounts 2,021 2,347
Data Processing 724 716
Income from Fiduciary Activities 269 245
Securities Transactions (3) 7
Other 1,383 1,120
Total Noninterest Income 4,394 4,435
NONINTEREST EXPENSE
Salaries and Employee Benefits 5,903 5,876
Occupancy, Net 771 745
Furniture and Equipment 1,241 1,098
Other 3,059 3,166
Total Noninterest Expense 10,974 10,885
Income Before Income Tax 4,931 4,450
Income Tax Expense 1,664 1,405
NET INCOME $ 3,267 $3,045
Net Income Per Share $ .56 $ .53
Cash Dividends Per Share $ .15 $ .135
Average Shares Outstanding 5,830,421 5,742,910
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER
1997 1996
INTEREST INCOME
<S> <C> <C>
Interest and Fees on Loans $47,746 $36,586
Investment Securities:
U.S. Treasury 2,943 3,182
U.S. Gov. Agencies/Corp. 2,286 3,074
States and Political Subdivisions 2,432 2,639
Other Securities 267 236
Funds Sold 982 1,604
Total Interest Income 56,656 47,321
INTEREST EXPENSE
Deposits 19,545 16,388
Federal Funds Purchased & Securities
Sold Under Repurchase Agreements 1,166 865
Long-Term Debt 893 358
Other Short-Term Borrowings 234 157
Total Interest Expense 21,838 17,768
Net Interest Income 34,818 29,553
Provision for Loan Losses 1,351 857
Net Interest Income After
Provision for Loan Losses 33,467 28,696
NONINTEREST INCOME
Service Charges on Deposit Accounts 6,075 5,496
Data Processing 2,461 2,228
Income from Fiduciary Activities 797 785
Securities Transactions (5) 23
Other 4,368 3,287
Total Noninterest Income 13,696 11,819
NONINTEREST EXPENSE
Salaries and Employee Benefits 17,587 15,407
Occupancy, Net 2,252 1,971
Furniture and Equipment 3,665 2,961
Other 9,249 8,176
Total Noninterest Expense 32,753 28,515
Income Before Income Tax 14,410 12,000
Income Tax Expense 4,825 3,606
NET INCOME $ 9,585 $8,394
Net Income Per Share $ 1.65 $ 1.47
Cash Dividends Per Share $ .45 $ .405
Average Shares Outstanding 5,806,473 5,729,202
</TABLE>
(1) Prior period share and per share information have been restated to
reflect a 2-for-1 stock split effective April 1, 1997.
The accompanying notes to Consolidated Financial Statements are an
integral part of these statements.
<TABLE>
CAPITAL CITY BANK GROUP, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30
(UNAUDITED)
<CAPTION>
(Dollars In Thousands) 1997 1996
<S> <C> <C>
NET INCOME $ 9,585 $ 8,394
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Provision for Loan Losses 1,351 857
Depreciation 2,441 2,008
Net Amortization (Accretion) 501 747
Amortization of Intangible Assets 714 332
Gain on Sale of Real Estate Loans (500) (90)
Gain on Sale of Bank Property (275) -
Non-Cash Compensation 185 90
Net (Increase) Decrease in Interest
Receivable (119) 270
Net (Increase) Decrease in Other Assets 2,528 876
Net Increase (Decrease) in Other
Liabilities (341) (1,261)
Net Cash From Operating Activities 16,070 12,223
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Payments/Maturities of
Investment Securities-Available for Sale 43,420 69,756
Purchase of Investment Securities-
Available for Sale (2,925) (28,206)
Net (Increase) Decrease in Loans (32,691) (28,968)
Purchase of Premises & Equipment (1,270) (1,792)
Sales of Premises & Equipment 1,157 1,237
Cash Used to Fund Acquisition - (20,666)
Cash Acquired in Acquisition - 4,499
Net Cash from Investing Activities 7,691 (4,140)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase (Decrease) in Deposits (40,849) (37,358)
Net Increase (Decrease) in Federal
Funds Purchased 2,332 (25)
Net Increase (Decrease) in Other Borrowed
Funds (833) 3,508
Addition of Long-Term Debt - 15,000
Repayment of Long-Term Debt (1,632) (82)
Dividends Paid (2,613) (4,860)
Issuance of Common Stock 1,217 461
Net Cash From Financing Activities (42,378) (23,356)
Net Increase (Decrease) in Cash and
Cash Equivalents (18,617) (15,273)
Cash and Cash Equivalents at Beginning of
Period 88,906 103,063
Cash and Cash Equivalents at End of Period $ 70,289 $ 87,790
Supplemental Disclosure:
Interest Paid $ 19,926 $ 18,421
Taxes Paid $ 5,159 $ 2,712
</TABLE>
The accompanying notes to Consolidated Financial Statements are an
integral part of these statements.
CAPITAL CITY BANK GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) MANAGEMENT'S OPINION AND ACCOUNTING POLICIES
The consolidated financial statements, included herein, have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. Prior year financial statements have been reformatted
and/or amounts reclassified, as necessary, to conform with the current
presentation, including the restatement of share and per share data to
reflect a 2-for-1 stock split effective April 1, 1997.
In the opinion of management, the consolidated financial statements
contain all adjustments, which are those of a recurring nature, and
disclosures necessary to present fairly the financial position of the
Company as of September 30, 1997 and December 31, 1996, the results of
operations for the three and nine month periods ended September 30,
1997 and 1996, and cash flows for the nine month periods ended
September 30, 1997 and 1996.
The Company and its subsidiaries follow generally accepted accounting
principles and reporting practices applicable to the banking industry.
The principles which materially affect its financial position, results
of operations and cash flows are set forth in Notes to Financial
Statements which are included in the Company's 1996 Annual Report and
Form 10-K. There have been no significant changes in the accounting
policies of the Company since December 31, 1996.
(2) INVESTMENT SECURITIES
The carrying value and related market value of investment securities
at September 30, 1997 and December 31, 1996 were as follows (dollars
in thousands):
<TABLE>
<CAPTION>
September 30, 1997
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury $ 29,384 $ 55 $ 4 $ 29,435
U.S. Government Agencies
and Corporations 41,058 76 60 41,074
States and Political
Subdivisions 66,783 462 74 67,171
Mortgage Backed Securities 25,181 388 68 25,501
Other Securities 4,657 1 - 4,658
Total $167,063 $982 $206 $167,839
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
Amortized Unrealized Unrealized Market
Available-For-Sale Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury $ 40,766 $ 75 $ 9 $ 40,832
U.S. Government Agencies
and Corporations 57,381 32 376 57,037
States and Political
Subdivisions 74,196 620 117 74,699
Mortgage Backed Securities 29,266 160 257 29,169
Other Securities 5,448 4 - 5,452
Total $207,057 $891 $759 $207,189
</TABLE>
(3) LOANS
The composition of the Company's loan portfolio at September 30, 1997
and December 31, 1996 was as follows (dollars in thousands):
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
<S> <C> <C>
Commercial, Financial
and Agricultural $ 55,871 $ 57,023
Real Estate-Construction 51,539 41,389
Real Estate-Mortgage 455,620 432,110
Consumer 142,597 137,153
Gross Loans $705,627 $674,675
</TABLE>
(4) ALLOWANCE FOR LOAN LOSSES
An analysis of the changes in the allowance for loan losses for the
nine month period ended September 30, 1997 and 1996, is as follows
(dollars in thousands):
<TABLE>
<CAPTION>
September 30, 1997 September 30, 1996
<S> <C> <C>
Balance, Beginning of the Period $8,179 $6,474
Acquired Reserves - 1,846
Provision for Loan Losses 1,351 857
Recoveries on Loans Previously
Charged-Off 523 498
Loans Charged-Off (1,548) (1,383)
Balance, End of Period $8,505 $8,292
</TABLE>
Impaired loans are primarily defined as all nonaccruing loans for the
loan categories which are included within the scope of SFAS 114.
Nonaccruing loans at September 30, 1997 were $2.4 million compared to
$3.4 million at September 30, 1996 and $3.0 million at December 31,
1996.
The Company recognizes income on nonaccrual loans primarily on the
cash basis. Any change in the present value of expected cash flows is
recognized through the allowance for loan losses.
(5) DEPOSITS
The composition of the Company's interest bearing deposits at
September 30, 1997 and December 31, 1996 was as follows (dollars in
thousands):
<TABLE>
<CAPTION>
September 30, 1997 December 31, 1996
<S> <C> <C>
NOW Accounts $ 98,257 $114,507
Money Market Accounts 79,338 79,352
Savings Deposits 81,634 91,986
Other Time Deposits 379,331 384,365
Total Interest Bearing
Deposits $638,560 $670,210
</TABLE>
(6) ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1997 Capital City Bank adopted Statements of
Financial Accounting Standards (SFAS) No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." This Statement establishes new rules for determining
whether a transfer of financial assets constitutes a sale and, if so,
the determination of any resulting gain or loss. This Statement
requires that an enterprise recognize only assets it controls and
liabilities it has incurred, to remove assets only when control has
been surrendered, and to remove liabilities only when they have been
extinguished. The adoption of the Statement did not have a material
impact on the Company's financial condition or results of operation.
In February 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 128, "Earnings
Per Share" which, when adopted, will replace the current methodology
for calculating and presenting earnings per share. Under SFAS No.
128, primary earnings per share will be replaced with a presentation
of basic earnings per share and fully diluted earnings per share will
be replaced with diluted earnings per share. Basic earnings per share
excludes dilution and is computed by dividing income available to
common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share is computed
similar to fully diluted earnings per share. This Statement will be
effective for the Company's December 31, 1997 financial statements and
is not anticipated to have a material impact on the Company's
financial condition or results of operation.
In February 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 129,
"Disclosure of Information About Capital Structure." This Statement
establishes standards for disclosing information about an entity's
capital structure. This Statement will be effective for the Company's
December 31, 1997 financial statements and will not have a material
impact on the Company's financial condition or results of operation.
In June 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income." This Statement establishes
standards for reporting and displaying comprehensive income and its
components in a full set of general-purpose financial statements. This
Statement will be effective for the Company's financial statements
for periods beginning after December 31, 1997 and will not have a
material impact on the Company's financial condition or results of
operation.
In June 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
This Statement establishes standards for the way public business
enterprises report information about operating segments in annual
financial statements and requires the enterprises to report selected
information about operating segments in interim financial reports
issued to shareholders. This Statement will be effective for the
Company's financial statements for periods beginning after December
31, 1997 and will not have a material impact on the Company's
financial condition or results of operation.
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion sets forth the major factors that have
affected the Company's financial condition and results of operations
and should be read in conjunction with the accompanying financial
statements. All prior period share and per share data have been
adjusted to reflect a 2-for-1 stock split effective April 1, 1997.
The year-to-date averages used in this report are based on daily
balances for each respective period.
On July 1, 1996, the Company completed its acquisition of First
Financial Bancorp, Inc. and its wholly-owned subsidiary, First Federal
Bank; (collectively referred to as "First Financial"). The
acquisition was accounted for under the purchase method of accounting.
Financial comparisons to prior year periods are not necessarily
comparable due to the impact of the acquisition.
RESULTS OF OPERATIONS
Net Income
Net income was $3.3 million, or $.56 per share for the third quarter
of 1997, a per share increase of 5.7% over the $3.0 million, or $.53
per share for the comparable period in 1996. Net income was $9.6
million, or $1.65 per share for the nine months ended September 30,
1997, a per share increase of 12.2% over the $8.4 million, or $1.47
per share for comparable period in 1996. Operating revenue, which
includes net interest income and noninterest income, increased $6.6
million, or 16.4%, over the comparable nine month period of 1996, and
was the most significant factor contributing to the increase in
earnings.
<TABLE>
<CAPTION>
For The Three For The Nine
Months Ended Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest and Dividend Income $19,362 $19,019 $56,656 $47,321
Taxable Equivalent Adjustment(1) 406 404 1,257 1,274
19,768 19,423 57,913 48,595
Interest Expense 7,402 7,785 21,838 17,768
Net Interest Income (FTE) 12,366 11,638 36,075 30,827
Provision for Loan Losses 449 334 1,351 857
Taxable Equivalent Adjustment 406 404 1,257 1,274
Net Interest Income
After Provision 11,511 10,900 33,467 28,696
Noninterest Income 4,394 4,435 13,696 11,819
Noninterest Expense 10,974 10,885 32,753 28,515
Income Before Income Taxes 4,931 4,450 14,410 12,000
Income Taxes 1,664 1,405 4,825 3,606
Net Income $ 3,267 $ 3,045 $ 9,585 $ 8,394
Percent Change over comparable
prior year period 7.29% 12.15% 14.19% 18.83%
Return on Average Assets (2) 1.29% 1.18% 1.28% 1.29%
Return on Average Equity (2) 13.44% 14.20% 13.76% 13.49%
</TABLE>
(1) Computed using a statutory tax rate of 35%
(2) Annualized
Net Interest Income
Third quarter taxable equivalent net interest income increased
$728,000, or 6.3%, over the comparable quarter in 1996. Taxable
equivalent net interest income for the nine month period of 1997
increased $5.2 million, or 17.0%, over the same period of 1996. The
increase in both the three and nine month periods is attributable to
loan growth. Loans, on average through the first nine months,
increased 31.8%, reflecting the acquisition of First Financial and
internal loan growth. During 1997, loans averaged 76.6% of total
earning assets compared to 67.6% for the comparable nine month period
in 1996. Table I on page 16 provides a comparative analysis of the
Company's average balances and interest rates.
For the three and nine month periods ended September 30, 1997, taxable
equivalent interest income increased $345,000, or 1.8%, and $9.3
million, or 19.2%, respectively, over the comparable prior year
periods. Interest income has increased primarily due to the Company's
ability to grow the loan portfolio. Loans during the first nine
months of 1997 averaged $690.2 million, representing an increase of
$166.7 million, or 31.8%, over the comparable period in 1996, and
loans as a percent of average earning assets increased to 76.6% from
67.3%. This shift in mix contributed to a 25 basis point increase,
from 8.34% to 8.59%, in the yield on earning assets.
Interest expense for the three month period of 1997 decreased
$383,000, or 4.9%, from the comparable period of 1996. The decrease
in the three month period is primarily attributable to the contraction
of interest bearing deposits. For the third quarter of 1997, average
interest bearing deposits declined $48.2 million and represented 77.5%
of total deposits, compared to 79.9% for the third quarter of 1996.
During the third quarter of 1997, the average rate paid on interest
bearing liabilities rose to 4.18%, from 4.16% in the second quarter of
1997 and 4.13% in the third quarter of 1996. For the nine month
period ended September 30, interest expense increased $4.1 million, or
22.9%, over the comparable period of 1996. The year-to-date increase
in interest expense is attributable to higher levels of interest
bearing liabilities and a shift in the mix of deposits, both
reflecting the acquisition of First Federal.
The Company's interest rate spread (defined as the average taxable
equivalent yield on earning assets less the average rate paid on
interest bearing liabilities) for the three and nine month periods
ended September 30, 1997 was 4.48% and 4.47%, respectively, compared
to 4.24% and 4.43% for the comparable periods in 1996. The
improvement in spread is attributable to higher yields on earning
assets. The Company's net interest margin percentage (defined as
taxable-equivalent net interest income divided by average earning
assets) for the three and nine month periods ended September 30, 1997
was 5.42% and 5.35%, respectively, compared to 5.01% and 5.29% for the
comparable periods in 1996. The higher margin is due to higher yields
on earning assets and a reduction in the level of earning assets
funded with interest bearing liabilities.
Provision for Loan Losses
The provision for loan losses was $449,000 and $1.4 million,
respectively, for the three and nine month periods ended September 30,
1997, compared to $334,000 and $857,000 for the comparable periods in
1996. Net charge-offs, while up slightly from 1996, remain at
historically low levels relative to the size of the loan portfolio.
Nonperforming loans declined $600,000, or 20.0%, during the first nine
months of 1997. As compared to year-end, the allowance for loan
losses increased slightly to $8.5 million and represented 1.21% of
total loans versus 1.22% at year-end 1996.
Based on current economic conditions, the low level of nonperforming
loans, and net charge-offs, it is management's opinion the allowance
for loan losses as of September 30, 1997 is sufficient to provide for
losses inherent in the loan portfolio as of that date.
For a discussion of the Company's nonperforming loans, see the section
entitled "Financial Condition."
Charge-off activity for the respective periods is set forth below.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
9/30/97 9/30/96 9/30/97 9/30/96
<S> <C> <C> <C> <C>
Net Charge-Offs $393,000 $297,000 $1,025,000 $885,000
Net Charge-Offs (Annualized)
as a percent of Average
Loans Outstanding, Net of
Unearned Interest .22% .18% .20% .23%
</TABLE>
Noninterest Income
Noninterest income declined $41,000, or .9%, in the third quarter of
1997 versus the comparable quarter for 1996, and increased $1.9
million, or 15.9%, for the nine months ended September 30, 1997 versus
the comparable period for 1996. The lower level of noninterest income
during the third quarter reflects a decline in service charge
revenues. Although the acquisition of First Financial favorable
impacted noninterest income, the increase is principally attributable
to the implementation of recommendations resulting from a profit
enhancement program conducted in the latter half of 1995 and repricing
of the bank service fees which went into effect on July 1, 1996.
Additionally, the Company sold parcels of bank property which resulted
in a $275,000 gain during the second quarter of 1997.
Service charges on deposit accounts for the third quarter of 1997
decreased $326,000, or 13.9%, versus the comparable period in 1996,
and increased $579,000, or 10.5%, over the comparable nine month
periods for 1996. The third quarter decline is partially attributable
to a decrease in the total number of deposit accounts. The year-to-
date increase reflects the repricing mentioned above.
Data processing revenues increased $8,000, or 1.1%, and $233,000, or
10.5%, respectively, over the comparable three and nine month periods
in 1996. The increase reflects higher revenues associated with
processing for third party banks.
Other income increased $263,000, or 23.5%, and $1.1 million, or 32.9%,
respectively, for the three and nine month periods ended September 30,
1997 over the comparable prior year periods. The increase is
primarily attributable to gains on the sale of real estate loans
during the first nine months of 1997 totaling $500,000, a $275,000
gain on the sale of bank property recognized in the second quarter,
and ATM surcharge revenue.
Annualized noninterest income as a percent of average assets was 1.83%
for the first nine months of 1997, an increase of 1 basis point for
the comparable period in 1996.
Noninterest Expense
Noninterest expense increased $89,000, or .8%, and $4.2 million, or
14.9%, respectively, over the comparable three and nine month periods
of 1996. The comparison to the first nine months of 1996 is
substantially impacted by the acquisition of First Financial.
Compensation expense increased $27,000, or .5%, and $2.2 million, or
14.2%, respectively, over the comparable three and nine month periods
of 1996. The increase reflects growth in the number of full-time
equivalent employees by 55 attributable to the First Financial
acquisition.
Occupancy expense, including premises, furniture, fixtures and
equipment increased $169,000, or 9.2%, and $985,000, or 20.0%,
respectively, over the comparable three and nine month periods of
1996. The increase is primarily attributable to the addition of five
new offices acquired through the First Financial acquisition.
Other noninterest expense declined $107,000, or 3.4%, and increased
$1.1 million, or 13.1%, respectively, over the comparable three and
nine month periods of 1996. A significant portion of the increase
reflects operating expenses with the five new offices. Additionally,
advertising expense increased $187,000, or 42.1%, and amortization of
intangible assets increased $303,000, or 88.1%.
Annualized net noninterest expense (noninterest income minus
noninterest expense, net of intangibles) as a percent of average
assets was 2.46% in the first nine months of 1997 versus 2.56% for the
first nine months of 1996. The decrease in this percentage is
attributable to the growth in noninterest income.
Income Taxes
The provision for income taxes increased $259,000, or 18.4%, during
the third quarter and $1.2 million, or 33.8%, during the first nine
months of 1997. The increase in the provision over the prior year is
attributable to higher taxable income. The Company's effective tax
rate for the first nine months of 1997 was 33.5%, versus 30.0% for the
comparable period in 1996. The increase in the effective tax rate is
attributable to a decrease in tax exempt income as a percent of
taxable income in the first nine months of 1997 as compared to the
comparable period of 1996.
FINANCIAL CONDITION
Average balances for the nine month period ended September 30, 1997
reflect the acquisition of First Financial. The impact on average
balances for the nine month period is due to the timing of the
acquisition. Table I on page 16 presents average balances for the
three and nine month periods of 1997 and 1996.
The Company's average assets increased to $1.0 billion in the first
nine months of 1997 from $871.5 million in the first nine months of
1996. Average earning assets were $901.7 million for the nine months
ended September 30, 1997 versus $778.3 million for the comparable
period in 1996. The most significant change in the mix of earning
assets occurred through growth in the loan portfolio. The increase in
the loan portfolio reflects the First Financial acquisition, and
internal loan growth partially funded through a reduction in the
investment portfolio.
Average loans increased $166.7 million, or 31.8%, over the comparable
nine month period in 1996. Loan growth occurred primarily in the real
estate and consumer portfolios. Residential real estate loans
increased substantially with the acquisition of First Financial.
Based on averages for the first nine months of 1997, loans as a
percentage of earning assets increased to 76.6% from 67.3% in 1996,
which had a favorable impact on the Company's net interest income.
At September 30, 1997, the Company's nonperforming loans were $2.4
million versus $3.0 million at year-end 1996. As a percentage of
nonperforming loans, the allowance for loan losses represented 354.5%
at September 30, 1997 versus 275.8% at year-end 1996. Nonperforming
loans include nonaccruing and restructured loans. Other real estate,
which includes property acquired either through foreclosure or by
receiving a deed in lieu of foreclosure, was $2.3 million at September
30, 1997 compared to $1.5 million at December 31, 1996. The increase
reflects undeveloped branch sites acquired in the First Financial
transaction which are held for sale and have been reclassified to
other real estate. The ratio of nonperforming assets to loans plus
other real estate was .66% at September 30, 1997, constant with year-
end.
The investment portfolio is a significant component of the Company's
operations and, as such, it functions as a key element of liquidity
and asset/liability management. During 1997, maturities in the
securities portfolio have been used to fund loan growth resulting in a
$39.4 million, or 18.8%, reduction in the portfolio. Securities in
the available-for-sale portfolio are recorded at fair value and
unrealized gains and losses associated with these securities are
recorded, net of taxes, as a separate component of shareholders'
equity. At September 30, 1997, shareholders' equity included a net
unrealized gain of $492,000 compared to a gain of $82,000 at December
31, 1996. The increase in value reflects a decline in current
interest rates relative to their level at year-end.
Average deposits increased to $840.5 million for the first nine months
of 1997, from $741.0 million for the first nine months of 1996. The
growth in deposits is attributable to the First Financial acquisition.
During the third quarter, deposits averaged $838.7 million, compared
to $874.6 million for the comparable quarter in 1996. The decrease
reflects growing competition from banks and non-banks. The mix of
deposits acquired through First Financial (certificates of deposit
representing 75% of total acquired deposits) impacted the Company's
overall deposit structure. Certificates of deposit, as a percent of
average total deposits, increased to 45.8% for the first nine months
of 1997, from 41.0% for the comparable period in 1996.
The ratio of average noninterest bearing deposits to total deposits
fell to 21.92% for the first nine months of 1997, compared to 22.7%
for the comparable period in 1996. For the same periods, the ratio of
average interest bearing liabilities to average earning assets was
78.7% and 78.1%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity, for a financial institution, is the availability of funds
to meet increased loan demand and/or excessive deposit withdrawals.
Management has implemented a financial structure that provides ready
access to sufficient liquid funds to meet normal transaction
requirements, take advantage of investment opportunities and cover
unforeseen liquidity demands. In addition to core deposit growth,
sources of funds available to meet liquidity demands for the
subsidiary banks include federal funds sold, near-term loan and
investment maturities, including the "Available-for-Sale" investment
portfolio, and the ability to purchase federal funds through
established lines of credit with correspondent banks. Additionally,
the parent company maintains a $25.0 million revolving line of credit.
As of September 30, 1997, there was $13.5 million outstanding under
this credit facility which the Company borrowed on July 1, 1996 to
fund the acquisition of First Financial.
The Company's equity capital was $98.3 million as of September 30,
1997, compared to $89.5 million as of December 31, 1996. The
Company's management continues to monitor its capital position in
relation to its level of assets with the objective of maintaining a
strong capital position. The leverage ratio was 9.1% at September 30,
1997 versus 7.9% at December 31, 1996. Further, the Company's risk-
adjusted capital ratio of 14.8% significantly exceeds the 8.0% minimum
requirement under the risk-based regulatory guidelines.
State and federal regulations as well as the Company's long-term debt
agreement place certain restrictions on the payment of dividends by
both the Company and its Group banks. At September 30, 1997, these
regulations and covenants did not impair the Company's (or its Group
banks') ability to declare and pay dividends or to meet other existing
obligations.
During the first nine months of 1997, shareholders' equity increased
$8.8 million, or 13.1%, on an annualized basis. The net increase in
shareholders' equity reflects net income of $9.6 million, dividends of
$2.6 million, stock issuances of $1.4 million and an increase in the
Company's net unrealized gain on available-for-sale securities of
$410,000. Stock issuances totaling $1.4 million reflect 9,368 shares
issued under the Company's recently adopted Dividend Reinvestment and
Optional Stock Purchase Plan and 47,405 shares issued under other
employee stock purchase and incentive plans.
The Company's common stock had a book value of $16.84 per share at
September 30, 1997 compared to $15.49 at December 31, 1996. Pursuant
to the Company's stock repurchase program adopted in 1989, the Company
has repurchased 527,160 (split adjusted) shares of its common stock.
In the first nine months of 1997, there were no shares repurchased.
IMPACT OF NEW ACCOUNTING STANDARDS
Effective January 1, 1997 Capital City Bank adopted SFAS No. 125,
"Accounting Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities." This Statement establishes new rules
for determining whether a transfer of financial assets constitutes a
sale and, if so, the determination of any resulting gain or loss.
This Statement requires that an enterprise recognize only assets it
controls and liabilities it has incurred, to remove assets only when
control has been surrendered, and to remove liabilities only when they
have been extinguished.
In February 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 128, "Earnings
Per Share" which, when adopted, will replace the current methodology
for calculating and presenting earnings per share. The Statement will
be effective for the Company's December 31, 1997 financial statements.
In February 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 129,
"Disclosure of Information About Capital Structure." The Statement
will be effective for the Company's December 31, 1997 financial
statements.
In June 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS)No. 130, "Reporting
Comprehensive Income." The Statement will be effective for the
Company's financial statements for periods beginning after
December 15, 1997.
In June 1997, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards (SFAS) No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
The Statements will be effective for the Company's financial statements
for periods beginning after December 15, 1997.
ITEM III. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable
<TABLE>
AVERAGES BALANCES & INTEREST RATES
(Taxable Equivalent Basis - Dollars in Thousands)
<CAPTION>
FOR THREE MONTHS ENDED SEPTEMBER 30,
1997
Balance Interest Rate
ASSETS
<S> <C> <C> <C>
Loans, Net of Unearned Interest $ 704,222 $16,580 9.34%
Taxable Investment Securities 106,684 1,670 6.20%
Tax-Exempt Investment Securities 68,192 1,152 6.76%
Funds Sold 26,623 366 5.49%
Total Earning Assets 905,721 19,768 8.66%
Cash & Due From Banks 46,796
Allowance for Loan Losses (8,476)
Other Assets 59,129
TOTAL ASSETS $1,003,170
LIABILITIES
NOW Accounts $ 100,740 $ 408 1.61%
Money Market Accounts 81,528 627 3.05%
Savings Accounts 83,294 420 2.00%
Other Time Deposits 384,783 5,142 5.30%
Total Int. Bearing Deposits 650,345 6,597 4.02%
Funds Purchased 29,096 416 5.67%
Other Borrowed Funds 6,187 98 6.26%
Long-Term Debt 16,935 291 6.83%
Total Interest Bearing
Liabilities 702,563 7,402 4.18%
Noninterest Bearing Deposits 188,387
Other Liabilities 15,773
TOTAL LIABILITIES 906,723
SHAREHOLDERS' EQUITY
Common Stock 58
Surplus 6,169
Retained Earnings 90,220
TOTAL SHAREHOLDERS' EQUITY 96,447
TOTAL LIABILITIES & EQUITY $1,003,170
Interest Rate Spread 4.48%
Net interest Income $12,366
Net Interest Margin 5.42%
</TABLE>
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED SEPTEMBER 30,
1996
Balance Interest Rate
ASSETS
<S> <C> <C> <C>
Loans, Net of Unearned Interest $ 651,753 $15,164 9.26%
Taxable Investment Securities 144,756 2,319 6.38%
Tax-Exempt Investment Securities 72,857 1,224 6.72%
Funds Sold 54,462 716 5.23%
Total Earning Assets 923,828 19,423 8.37%
Cash & Due From Banks 50,148
Allowance for Loan Losses (8,227)
Other Assets 60,362
TOTAL ASSETS $1,026,111
LIABILITIES
NOW Accounts $ 105,372 $ 539 2.03%
Money Market Accounts 97,736 756 3.08%
Savings Accounts 96,492 517 2.13%
Other Time Deposits 399,072 5,213 5.20%
Total Int. Bearing Deposits 698,672 7,025 4.00%
Funds Purchased 26,325 325 4.90%
Other Borrowed Funds 8,929 136 6.06%
Long-Term Debt 16,855 299 7.06%
Total Interest Bearing
Liabilities 750,781 7,785 4.13%
Noninterest Bearing Deposits 175,931
Other Liabilities 14,611
TOTAL LIABILITIES 941,323
SHAREHOLDERS' EQUITY
Common Stock 58
Surplus 4,320
Retained Earnings 80,410
TOTAL SHAREHOLDERS' EQUITY 84,788
TOTAL LIABILITIES & EQUITY $1,026,111
Interest Rate Spread 4.24%
Net interest Income $11,638
Net Interest Margin 5.01%
</TABLE>
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED SEPTEMBER 30,
1997
Balance Interest Rate
ASSETS
<S> <C> <C> <C>
Loans, Net of Unearned Interest $ 690,175 $47,859 9.27%
Taxable Investment Securities 116,658 5,496 6.30%
Tax-Exempt Investment Securities 70,189 3,576 6.79%
Funds Sold 24,630 982 5.33%
Total Earning Assets 901,652 57,913 8.59%
Cash & Due From Banks 47,188
Allowance for Loan Losses (8,371)
Other Assets 60,489
TOTAL ASSETS $1,000,957
LIABILITIES
NOW Accounts $ 103,572 $ 1,331 1.72%
Money Market Accounts 80,720 1,826 3.03%
Savings Accounts 87,124 1,307 2.01%
Other Time Deposits 384,742 15,081 5.24%
Total Int. Bearing Deposits 656,158 19,545 3.98%
Funds Purchased 29,607 1,166 5.26%
Other Borrowed Funds 6,319 234 4.95%
Long-Term Debt 17,480 893 6.83%
Total Interest Bearing
Liabilities 709,564 21,838 4.11%
Noninterest Bearing Deposits 184,291
Other Liabilities 13,954
TOTAL LIABILITIES 907,809
SHAREHOLDERS' EQUITY
Common Stock 58
Surplus 6,169
Retained Earnings 86,921
TOTAL SHAREHOLDERS' EQUITY 93,148
TOTAL LIABILITIES & EQUITY $1,000,957
Interest Rate Spread 4.47%
Net interest Income $36,075
Net Interest Margin 5.35%
</TABLE>
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED SEPTEMBER 30,
1996
Balance Interest Rate
ASSETS
<S> <C> <C> <C>
Loans, Net of Unearned Interest $523,485 36,685 9.36%
Taxable Investment Securities 139,811 6,492 6.20%
Tax-Exempt Investment Securities 74,404 3,814 6.83%
Funds Sold 40,598 1,604 5.28%
Total Earning Assets 778,298 48,594 8.34%
Cash & Due From Banks 49,997
Allowance for Loan Losses (7,077)
Other Assets 50,311
TOTAL ASSETS $871,529
LIABILITIES
NOW Accounts $100,253 1,322 1.76%
Money Market Accounts 84,805 1,944 3.06%
Savings Accounts 84,061 1,323 2.10%
Other Time Deposits 303,537 11,799 5.19%
Total Int. Bearing Deposits 572,656 16,388 3.82%
Funds Purchased 23,963 865 4.82%
Other Borrowed Funds 3,842 158 5.49%
Long-Term Debt 6,964 358 6.87%
Total Interest Bearing
Liabilities 607,425 17,768 3.91%
Noninterest Bearing Deposits 168,350
Other Liabilities 12,610
TOTAL LIABILITIES 788,385
SHAREHOLDERS' EQUITY
Common Stock 58
Surplus 4,951
Retained Earnings 78,135
TOTAL SHAREHOLDERS' EQUITY 83,144
TOTAL LIABILITIES & EQUITY $871,529
Interest Rate Spread 4.43%
Net interest Income $30,827
Net Interest Margin 5.29%
</TABLE>
(1) Average balances include nonaccrual loans. Interest income
includes fees on loans of approximately $741,000 and $2,215,000, for
the three and nine months ended September 30, 1997, versus $685,000
and $1,641,000, for the comparable periods ended September 30, 1996.
(2) Interest income includes the effects of taxable equivalent
adjustments using a 35% tax rate.
PART II. OTHER INFORMATION
ITEMS 1-4
Not applicable
ITEM 5. OTHER INFORMATION
On October 29, 1997, the Company entered into a definitive purchase
and assumption agreement with First Federal Savings & Loan Association
of Lakeland, Florida ("First Federal") to acquire five of First
Federal's branch facilities which include loans and deposits. The
Company has agreed to pay a deposit premium of 6.33% to assume
approximately $60 million in deposits, purchase loans equal to 80% of
deposits at closing, and acquire the real estate. Four of the five
offices will be merged into existing offices of Capital City Bank.
The buildings and premises, totaling approximately $415,000, of the
four First Federal offices being merged, will be classified as other
real estate. The transaction, subject to regulatory approval, is
expected to close during the first quarter of 1998.
On October 18, 1997, the Company consolidated three of its subsidiary
banks (Levy County State Bank, Farmers and Merchants Bank of Trenton
and Branford State Bank) into Capital City Bank. As a result, the
Company now has one subsidiary bank with approximately $1.0 billion in
assets, $700 million in loans and $826 million in deposits.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
(3b) Amended and Restated Bylaws of Capital City Bank Group, Inc.
27 Financial Data Schedule
(B) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the period
ended September 30, 1997.
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 Chief Financial Officer hereunto duly authorized.
CAPITAL CITY BANK GROUP, INC.
(Registrant)
/s/ J. Kimbrough Davis
J. Kimbrough Davis
Executive Vice President and
Chief Financial Officer
Date: November 13, 1997
Exhibit 3(b)
AMENDED AND RESTATED
BYLAWS OF
CAPITAL CITY BANK GROUP, INC.
Adopted by the Board of Directors on the 23rd day of October, 1997.
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of
this Corporation shall be held annually within the first five (5)
months of each year, or at any other time permitted by law, at the
time and place designated by the Board of Directors of the
Corporation. Business transacted at the annual meeting shall include
the election of directors of the Corporation, in accordance with the
applicable provisions of the Articles of Incorporation, and all other
duties and powers conferred upon the shareholders by the laws of the
State of Florida.
Section 2. Special Meetings. Special meetings of the shareholders
shall be held when directed by the Board of Directors through a
resolution adopted by a majority of the total number of directors
(whether or not any vacancies of previously authorized directorships
exist at the time the Board is presented with such resolution), or
when requested in writing by the holders of not less than fifty
percent (50%) of all the shares entitled to vote on any issue at the
meeting, upon the giving of notice as provided in Article I, Section 4
of these Bylaws. The call for the meeting shall be issued by the
Secretary or the shareholders requesting the special meeting, unless
the President, the Board of Directors or such shareholders designate
another person to do so.
Section 3. Place. Meetings of shareholders may be held within or
outside of the State of Florida. If no place is designated in the
notice for a meeting of shareholders, the place of meeting shall be
the principal office of the Corporation.
Section 4. Notice. Except as provided in the Florida Business
Corporation ("the Act"), written notice stating the place, day and
hour of the meeting, and in the case of a special meeting or if
specifically required by law, the purpose or purposes for which the
meeting is called, shall be delivered to each shareholder of record
entitled to vote at such meeting. Such notice shall be given at least
ten (10) but not more than sixty (60) days before the date of the
meeting, by first class mail by the Secretary or the shareholders
requesting the special meeting, unless the President, the Board of
Directors or such shareholders designate another person to do so.
Such notice shall be mailed to each shareholder at his or her address
as it appears on the books of the Corporation. If the notice is
mailed at least thirty (30) days before the date of the meeting, it
may be done by a class of United States mail other than first class.
Such notice is deemed delivered when deposited in the United States
mail with postage prepaid thereon.
Section 5. Notice of Adjourned Meetings. When a meeting is adjourned
to another time or place, it shall not be necessary to give any notice
of the adjourned meeting if the time and place to which the meeting is
adjourned are announced at the meeting at which the adjournment is
taken, and at the adjourned meeting any business may be transacted
that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board of Directors fixes a new
record date for the adjourned meeting, a notice of the adjourned
meeting shall be given as provided in Article I, Section 4 of these
Bylaws to each shareholder of record on the new record date entitled
to vote at such meeting.
Section 6. Waiver of Notice of Shareholders Meetings. Whenever any
notice is required to be given to any shareholder, a waiver thereof in
writing signed by the shareholder or shareholders entitled to such
notice, whether before, during or after the time of the meeting stated
therein and delivered to the Corporation for inclusion in the minutes
or filing with the corporate records, shall be equivalent to the
giving of such notice. Attendance by a shareholder at a meeting shall
constitute a waiver of: (a) lack of notice or defective notice of such
meeting, unless the shareholder at the beginning of the meeting
objects to holding the meeting; or (b) lack of defective notice of a
particular matter at a meeting that is not within the purpose or
purposes described in the meeting notice, unless the person objects to
considering that particular matter when it is presented. Unless
otherwise required by the Articles of Incorporation, neither the
business to be transacted at, nor the purpose of, any regular or
special meeting of the shareholders need be specified in any written
waiver of notice.
Section 7. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of, or to vote at, any meeting of
shareholders or any adjournment thereof, or to demand a special
meeting, or to receive payment of any distribution, or in order to
make a determination of shareholders for any other purpose, the Board
of Directors may fix in advance a date as the record date for any
determination of shareholders, such date in any case to be not less
than ten (10) nor more than seventy (70) days prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. A determination of shareholders entitled
to notice of, or to vote at, any meeting of shareholders shall apply
to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting, which it must do if the meeting
is adjourned to a date more than one hundred twenty (120) days after
the date fixed for the original meeting.
Section 8. Voting Record. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of
the names of all shareholders who are entitled to notice of such
meeting, arranged by voting group, with the address of, and the number
and class and series, if any, of the shares held by, each shareholder.
The shareholders' list must be available for inspection by any
shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and
continuing through the meeting at the Corporation's principal office,
at a place identified in the meeting notice in the city where the
meeting will be held, or at the office of the Corporation's transfer
agent or registrar. Any shareholder of the Corporation or his agent
or attorney is entitled on written demand to inspect the shareholders'
list (subject to the requirements of the Act), during regular business
hours and at the shareholder's expense, during the period it is
available for inspection. The Corporation shall make the
shareholders' list available at the meeting of shareholders, and any
shareholder or his agent or attorney is entitled to inspect the list
at any time during the meeting or any adjournment.
If the requirements of this Section have not been substantially
complied with, the meeting shall be adjourned until such time as the
Corporation complies with such requirements on demand of any
shareholder in person or by proxy who failed to get such access. If
no such demand is made, failure to comply with the requirements of
this Section shall not affect the validity of any action taken at such
meeting.
Section 9. Shareholder Quorum and Voting. Shares entitled to vote as
a separate voting group may take action on a matter at a meeting only
if a quorum of those shares exists with respect to that matter.
Except as otherwise provided in the Articles of Incorporation or by
the Act, a majority of the shares entitled to vote on the matter by
each voting group, represented in person or by proxy, shall constitute
a quorum at any meeting of shareholders, but in no event shall a
quorum consist of less than one third of the shares of each voting
group entitled to vote. If less than a majority of outstanding shares
entitled to vote are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to time
without further notice. After a quorum has been established at any
shareholders' meeting, the subsequent withdrawal of shareholders, so
as to reduce the number of shares entitled to vote at the meeting
below the number required for a quorum, shall not affect the validity
of any action taken at the meeting or any adjournment thereof. For
purposes of determining a quorum, abstentions and broker non-votes
shall be deemed to be shares entitled to vote on a matter.
Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for
any adjournment of that meeting, unless a new record date is or must
be set for that adjourned meeting.
Section 10. Votes Per Share. Except as otherwise provided in the
Articles of Incorporation or by the Act, each outstanding share,
regardless of class, shall be entitled to one vote on each matter
submitted to a vote at a meeting of shareholders.
Section 11. Manner of Action. If a quorum is present, action on a
matter (other than the election of directors) by a voting group is
approved if the votes cast within the voting group favoring the action
exceed the votes cast opposing the action, unless a greater or lesser
number of affirmative votes is required by the Articles of
Incorporation, the Bylaws or by law.
Section 12. Voting for Directors. At each election for directors,
every shareholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by
him for as many persons as there are directors to be elected at that
time and for whose election he has a right to vote. Unless otherwise
provided in the Articles of Incorporation, cumulative voting is not
authorized and the directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting
at which a quorum is present.
Section 13. Voting of Shares. A shareholder may vote at any meeting
of shareholders of the Corporation, either in person or by proxy.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent or proxy designated by the
Bylaws of the corporate shareholder or, in the absence of any
applicable bylaw, by such person as the board of directors of the
corporate shareholder may designate. Proof of such designation may be
made by presentation of a certified copy of the Bylaws or other
instrument of the corporate shareholder. In the absence of any such
designation or, in the case of conflicting designation by the
corporate shareholder, the chairman of the board, the president, any
vice president, the secretary and the treasurer of the corporate
shareholder shall be presumed to possess, in that order, authority to
vote such shares.
Shares held by an administrator, executor, guardian, personal
representative or conservator may be voted by him or her, either in
person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or
her, either in person or by proxy, but no trustee shall be entitled to
vote shares held by him or her without a transfer of such shares into
his or her name or the name of his or her nominee.
Shares held by or under the control of a receiver, a trustee in a
bankruptcy proceeding or an assignee for the benefit of creditors may
be voted by such person without the transfer thereof into his or her
name.
If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in
common, tenants by the entirety or otherwise, or if two or more
persons have the same fiduciary relationship with respect to the same
shares, unless the Secretary of the Corporation is given notice to the
contrary and is furnished with a copy of the instrument or order
appointing them or creating the relationship wherein it is so
provided, then acts with respect to voting shall have the following
effect: (a) if only one votes, in person or by proxy, that act binds
all; (b) if more than one votes, in person or by proxy, the act of the
majority so voting binds all; (c) if more than one votes, in person or
by proxy, but the vote is evenly split on any particular matter, each
faction is entitled to vote the share or shares in question
proportionally; or (d) if the instrument or order so filed shows that
any such tenancy is held in unequal interest, a majority or a vote
evenly split for purposes hereof shall be a majority or a vote evenly
split in interest. The principles of this paragraph shall apply,
insofar as possible, to execution of proxies, waivers, consents, or
objections and for the purpose of ascertaining the presence of a
quorum.
Section 14. Proxies. Any shareholder of the Corporation, other
person entitled to vote on behalf of a shareholder pursuant to the
Act, or attorney-in-fact for such persons, may vote the shareholder's
shares in person or by proxy. Any shareholder of the Corporation may
appoint a proxy to vote or otherwise act for him or her by signing an
appointment form, either personally or by an attorney-in-fact. An
executed telegram or cablegram appearing to have been transmitted by
such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient
appointment form.
An appointment of a proxy is effective when received by the Secretary
of the Corporation or such other officer or agent which is authorized
to tabulate votes, and shall be valid for up to eleven (11) months,
unless a longer period is expressly provided in the appointment form.
The death or incapacity of the shareholder appointing a proxy does not
affect the right of the Corporation to accept the proxy's authority
unless notice of the death or incapacity is received by the Secretary
or other officer or agent authorized to tabulate votes before the
proxy exercises his authority under the appointment.
An appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and the
appointment is coupled with an interest.
Section 15. Voting Trusts. One or more shareholders may create a
voting trust, conferring on a trustee the right to vote or otherwise
act for them, by signing an agreement setting out the provisions of
the trust and transferring their shares to the trustee. When a
voting trust agreement is signed, the trustee shall prepare a list of
the names and addresses of all owners of beneficial interest in the
trust, together with the number and class of shares each transferred
to the trust, and deliver copies of the list and agreement to the
Corporation's principal office. After filing a copy of the list and
agreement in the Corporation's principal office, such copies shall be
open to inspection by any shareholder of the Corporation, subject to
the requirements of the Act, or to any beneficiary of the trust under
the agreement during business hours. The trustee must also deliver a
copy of each extension of the voting trust agreement, and a list of
beneficial owners under such extended agreement, to the Corporation's
principal office.
Section 16. Shareholders' Agreements. Two or more shareholders may
provide for the manner in which they will vote their shares, and
providing for such other matters as are permitted by the Act, by
signing an agreement for that purpose. When a shareholders' agreement
is signed, the shareholders who are parties thereto shall deliver
copies of the agreement to the Corporation's principal office. After
filing a copy of the agreement in the Corporation's principal office,
such copies shall be open to inspection by any shareholder of the
Corporation, subject to the requirements of the Act, or any party to
the agreement during business hours.
Section 17. Nominations for Director. Nominations for election to
the Board of Directors may be made by the Board of Directors or by any
shareholder of any outstanding class of capital stock of the
Corporation entitled to vote for the election of directors.
Nominations, other than those made by or on behalf of the Board of
Directors of the Corporation, shall be made in writing to the
Secretary of the Corporation and shall be delivered to or mailed and
received at the principal executive offices of the Corporation, not
less than one hundred twenty (120) days and not more than one hundred
eighty (180) days prior to the date of the Corporation's notice of
annual meeting provided with respect to the previous year's annual
meeting; provided, however, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed to be
more than thirty (30) calendar days earlier than the date contemplated
by the previous year's statement, such notice by the shareholder to be
timely must be received no later than the close of business on the
tenth (10th) day following the date on which notice of the date of the
annual meeting is given to shareholders or made public, whichever
first occurs. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) as
to each person whom the shareholder proposes to nominate for election
or re-election as a director at the annual meeting; (i) the name, age,
business address and residence address of the proposed nominee, (ii)
the principal occupation or employment of the proposed nominee, (iii)
the class and number of shares of capital stock of the Corporation
which are beneficially owned by the proposed nominee, and (iv) any
other information relating to the proposed nominee that is required to
be disclosed in solicitations for proxies for election of directors
pursuant to Schedule 14A of Regulation 14A promulgated under Section
14(a) of the Securities Exchange Act of 1934, as amended; and (b) as
to the shareholder giving the notice of nominees for election at the
annual meeting, (i) the name and record address of the shareholder,
and (ii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the shareholder. The
Corporation may require any proposed nominee for election at an annual
or special meeting of shareholders to furnish such other information
as may reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as a director of the
Corporation. No person shall be eligible for election as a director
of the Corporation unless nominated in accordance with the procedures
set forth herein. The Chairman of the meeting shall, if the facts
warrant, determine and declare in the meeting that a nomination was
not made in accordance with the requirements of the Articles of
Incorporation and this Section 17, and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
Section 18. Shareholder Proposals.
(a) At an annual meeting of the shareholders, only such business
shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business
must be (i) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the direction
of the Board of Directors, or (iii) otherwise properly brought before
the meeting by a shareholder in accordance with this Section 18.
(b) For business to be properly brought before an annual meeting by a
shareholder, the corporation must have received timely notice thereof
in writing from such shareholder. To be timely, a shareholder's
notice must be received by the Secretary of the corporation as of the
date set forth in the corporation's proxy statement relating to the
annual meeting for the preceding year; provided, however, that if no
such date is stated, then such date shall be one hundred and twenty
(120) calendar days in advance of the date (with respect to the
forthcoming annual meeting) that the corporation's proxy statement was
released to its shareholders in connection with the previous year's
annual meeting of security holders; and provided further that if no
annual meeting was held in the previous year or the date of the annual
meeting has been changed by more than thirty (30) calendar days from
the date contemplated at the time of the previous year's proxy
statement, a proposal shall be received by the corporation no later
than the close of business on the tenth (10th) day following the date
on which notice of the date of the annual meeting is given to
shareholders or made public, whichever first occurs.
(c) Such notification shall contain the following information as to
each matter the shareholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business
at the annual meeting; (ii) the name and address, as they appear on
the corporation's books, of the shareholder proposing such business;
(iii) the class and number of shares of the corporation which are
beneficially owned, as such term is defined in Rule 13d-3 ("Rule 13d-
3") promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), by the shareholder; (iv) any substantial
interest of the shareholder in such business; and (v) any other
information required pursuant to the rules and regulations promulgated
under the Exchange Act relating to shareholder proposals. For
purposes of clause (iv) above, a "substantial interest of the
shareholder in such business" shall be deemed to occur if such
interest were reportable (assuming that the shareholder's business was
in fact brought before the annual meeting) pursuant to Item 5 of
Schedule 14A (Rule 14a-101) promulgated under the Exchange Act.
(d) Notwithstanding anything in the Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance
with the procedures set forth in this Section.
Section 19. Inspectors of Election. Prior to each meeting of
shareholders, the Board of Directors or the President may appoint one
or more Inspectors of Election. Upon his appointment, each such
Inspector shall take and sign an oath to faithfully execute the duties
of Inspector at such meeting with strict impartiality and to the best
of his ability. Such Inspectors shall determine the number of shares
outstanding, the number of shares present at the meeting and whether a
quorum is present at such meeting. The Inspectors shall receive votes
and ballots and shall determine all challenges and questions as to the
right to vote and shall thereafter count and tabulate all votes and
ballots and determine the result. Such Inspectors shall do such
further acts as are proper to conduct the elections of directors and
the vote on other matters with fairness to all shareholders. The
Inspectors shall make a certificate of the results of the elections of
directors and the vote on other matters. No Inspector shall be a
candidate for election as a director of the Corporation.
ARTICLE II
DIRECTORS
Section 1. Functions. Except as provided in the Articles of
Incorporation or by law, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of this
Corporation shall be managed under the direction of, the Board of
Directors.
Section 2. Number. The Board of Directors of the Corporation shall
consist of a number of persons fixed by a resolution of the Board of
Directors from time to time; provided, however, that the Board of
Directors shall not consist of less than one (1) person, and not more
than twenty-five (25) persons.
Section 3. How Selected. Except as otherwise provided herein and in
the Articles of Incorporation with respect to appointment of directors
in order to fill a vacancy, directors shall be elected at the annual
meeting of shareholders or at a special meeting in accordance with
Article VI of the Articles of Incorporation, as it may be amended from
time to time.
Section 4. Qualifications. Directors must be natural persons over
the age of 18 years old, but need not be residents of the State of
Florida.
Section 5. Removal of Directors. Subject to the rights of the
holders of any series of Preferred Stock then outstanding, any
director, or the entire Board of Directors, may be removed, but only
for cause (as defined in the Articles of Incorporation), and only by
action of the shareholders in accordance with the Articles of
Incorporation. A removal of any director by the action of the
shareholders must receive the approval by an affirmative vote of the
holders of not less than two-thirds (66 2/3%) of the voting power of
all the issued and outstanding shares of the Corporation at any annual
meeting or any special meeting called for such purpose. A director
may not be removed without such a meeting, notwithstanding any other
provisions of these Bylaws. If a director was elected by a voting
group of shareholders, only the shareholders of that voting group may
participate in the vote to remove that director. The notice of the
meeting at which a vote is taken to remove a director must state that
the purpose or one of the purposes of the meeting is the removal of
the director or directors.
Section 6. Resignation. Any director may resign at any time by
delivering written notice to the Corporation, the Board of Directors
or its Chairman. Such resignation is effective when the notice is
delivered unless the notice specifies a later effective date, in which
event the Board of Directors may fill the pending vacancy before the
effective date if the Board of Directors provides that the successor
does not take office until the effective date.
Section 7. Vacancies. A director shall hold office until the annual
meeting for the year in which his term expires and until his
successors shall be elected and qualified, subject, however, to the
director's prior death, resignation, retirement, disqualification, or
removal from office. Any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number
of directors, may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the Board of
Directors. A director elected to fill a vacancy shall hold office for
a term that shall coincide with the term of the class to which such
director shall have been elected.
Section 8. Regular Meetings. An annual regular meeting of the Board
of Directors shall be held without notice as soon as practicable after
the annual meeting of shareholders for the purpose of the election of
officers and the transaction of such other business as may come before
the meeting, and at such other time and place as may be determined by
the Board of Directors. The Board of Directors may, with or without
notice, at any time and from time to time, decide the time and place,
either within or outside of the State of Florida, for the holding of
the annual regular meeting or additional regular meetings of the Board
of Directors. Meetings of the Board of Directors may be called by a
majority of the Board of Directors.
Section 9. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President of
the Corporation, or a majority of the Board of Directors.
The person or persons authorized to call special meetings of the Board
of Directors may designate any place, either within or outside of the
State of Florida, as the place for holding any special meeting of the
Board of Directors called by them. If no designation is made, the
place of meeting shall be the principal office of the Corporation in
the State of Florida.
Notice of any special meeting of the Board of Directors may be given
by any reasonable means, whether oral or written, and at any
reasonable time prior to such meeting. The reasonableness of any
notice given in connection with any special meeting of the Board of
Directors shall be determined in light of all of the pertinent
circumstances. It shall be presumed that notice of any special
meeting given at least two (2) days prior to such special meeting,
either orally (by telephone or in person), or by written notice
delivered personally or mailed to each director at his or her business
or residence address, is reasonable. Neither the business to be
transacted at, nor the purpose or purposes of, any special meetings of
the Board of Directors need be specified in the notice or in any
written waiver of notice of such meeting.
Section 10. Waiver of Notice of Meeting. Notice of a meeting of the
Board of Directors need not be given to any director who signs a
written waiver of notice either before, during or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of
notice of such meeting and waiver of any and all objections to the
place of the meeting, the time of the meeting and the manner in which
it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, any
objection to the transaction of business because the meeting is not
lawfully called or convened.
Section 11. Quorum and Voting. A majority of the number of directors
fixed in the manner provided by these Bylaws shall constitute a quorum
for the transaction of business; provided however, that whenever, for
any reason, a vacancy occurs in the Board of Directors, a quorum shall
consist of a majority of the remaining directors until the vacancy has
been filled. The act of the majority of the directors present at a
meeting at which a quorum is present when the vote is taken shall be
the act of the Board of Directors.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and
place. Notice of any such adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and,
unless the time and place of the adjourned meeting are announced at
the time of the adjournment, to the other directors.
Section 12. Meetings of the Board of Directors by Means of a
Conference Telephone or Similar Communications. Members of the Board
of Directors may participate in a meeting of such Board by means of a
conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person
at a meeting.
Section 13. Action Without a Meeting. Any action required or
permitted to be taken at a meeting of the Board of Directors or a
committee thereof may be taken without a meeting if a consent in
writing, setting forth the action so taken, is signed by all of the
directors of this Corporation, or all the members of the committee, as
the case may be. Action taken under this Section is effective when
the last director or member of the committee signs the consent, unless
the consent specifies a different effective date. Such consent shall
have the effect as a vote taken at an annual or special meeting of the
Board of Directors and may be described as such in any document.
Section 14. Director Conflicts of Interests. No contract or other
transaction between this Corporation and one or more of its directors
or any other corporation, firm, association or entity in which one or
more of the directors of this Corporation are directors or officers or
are financially interested shall be either void or voidable because of
such relationship or interest, or because such director or directors
of this Corporation are present at the meeting of the Board of
Directors or a committee thereof which authorizes, approves or
ratifies such contract or transaction, or because his or their vote(s)
are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known
to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient
for the purpose without counting the vote(s) or written consent(s) of
such interested director(s); or
(b) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote and they authorize, approve or
ratify such contract or transaction by vote taken at an annual or
special meeting of shareholders; or
(c) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board of Directors, a
committee thereof or the shareholders.
For purposes of Section 14(a) hereof only, a conflict of interest
transaction is authorized, approved or ratified if it receives the
affirmative vote of a majority of the directors on the Board of
Directors, or on the committee, who have no relationship or interest
in the transaction, but a transaction may not be authorized, approved
or ratified under this Section 14 by a single director. If a majority
of the directors who have no such relationship or interest in the
transaction vote to authorize, approve or ratify the transaction, a
quorum is present for the purpose of taking action under this Section
14. The presence of, or a vote cast by, a director with such
relationship or interest in the transaction does not affect the
validity of any action taken under Section 14(a) hereof if the
transaction is otherwise authorized, approved or ratified as provided
in that subsection, but such presence or vote of those directors may
be counted for purposes of determining whether the transaction is
approved under other provisions of the Bylaws, the Articles of
Incorporation or the Act.
For purposes of Section 14(b) hereof, a conflict of interest
transaction is authorized, approved or ratified if it receives the
vote of a majority of the shares entitled to be counted under this
Section 14. Shares owned by or voted under the control of a director
who has a relationship or interest in the transaction described in
this Section 14 may not be counted in a vote of shareholders to
determine whether to authorize, approve or ratify a conflict of
interest transaction under Section 14(b) hereof. The vote of those
shares, however, is counted in determining whether the transaction is
approved under other provisions of these Bylaws, the Articles of
Incorporation or the Act. A majority of the shares, whether or not
present, that are entitled to be counted in a vote on the transaction
under this Section 14 constitutes a quorum for the purpose of taking
action under this Section 14.
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS
Section 1. Standing Committees. The following standing committees
may be formed:
(a) Executive Committee.
(b) Compensation Committee.
(c) Audit Committee.
Section 2. Executive Committee. The Board of Directors may designate
from among its members an Executive Committee of not less than three
(3) nor more than seven (7) members, which shall have and may exercise
all the authority of the Board of Directors, except that no such
committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders;
(b) Designate candidates for the office of director, for purposes of
proxy solicitation or otherwise;
(c) Fill vacancies on the Board of Directors or any committee
thereof;
(d) Adopt, amend or repeal the Bylaws;
(e) Authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors;
(f) Authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of the series of a class
of shares.
The Board, by resolution adopted in accordance with this Section 2,
may designate one or more directors as alternate members of any such
committee who may act in the place and stead of any absent member or
members at any meeting of such committee.
Section 3. Compensation Committee. The Board of Directors may
designate from among its members a Compensation Committee of not less
than three (3) nor more than seven (7) members, which shall have the
authority to recommend to the Board of Directors the compensation of
the President of the Corporation, to review the compensation of
certain other officers of the Corporation, and to administer certain
of the Corporation's compensation, benefit and incentive plans.
Notwithstanding anything to the contrary in this Section 3, the
Compensation Committee shall not have the authority to perform any of
the functions set forth in Sections 2(a)-2(f) of this Article III.
The Board, by resolution adopted in accordance with this Section 3,
may designate one or more directors as alternate members of any such
committee who may act in the place and stead of any absent member or
members at any meeting of such committee.
Section 4. Audit Committee. The Board of Directors may designate
from among its members an Audit Committee of not less than three (3)
nor more than seven (7) members, a majority of whom shall not be
employees or officers of the Corporation, which shall have the
authority to do the following:
(a) Recommend to full Board selection of the Corporation's
independent public accountants and auditors.
(b) Review and approve the arrangements for and the scope of the
audit of the Corporation's financial statements, including without
limitation the auditor's fee.
(c) Review and respond to internal and external auditors' reports,
including the auditor's perception of the Corporation's personnel and
internal controls (to include controls over financial reporting and
compliance with Federal and State laws and regulations).
(d) Review significant unusual transactions or transactions which
involve a potential or actual conflict of interest.
(e) Provide minutes of each Committee meeting to the Board of
Directors.
(f) Perform any other actions necessary or desirable to do the
foregoing.
Notwithstanding anything to the contrary in this Section 4, the Audit
Committee shall not have the authority to perform any of the functions
set forth in Sections 2(a)-2(f) of this Article III.
Section 5. Additional Committees. The Board of Directors or the
Chairman of the Board may appoint additional committees from time to
time for such purposes and with such powers as the Board or Chairman
may determine, except that no such committee shall have the authority
to perform any of the functions set forth in Sections 2(a)-2(f) of
this Article III.
Section 6. Term. The term of each standing committee and each
additional committee appointed shall continue until modified or
terminated at any time by the affirmative action of the Board.
Section 7. Meetings. Each committee shall hold as many meetings as
are necessary to continue or complete the performance of its duties.
The provisions of Sections 9, 10 and 11 of Article II of these Bylaws
shall apply to committees and their members as well.
Section 8. Record of Meetings. Each committee shall keep or cause to
be kept minutes of each meeting held, and each set of minutes shall
include a description of all matters considered and all decisions, if
any, made.
ARTICLE IV
OFFICERS
Section 1. Officers. If so appointed by the Board of Directors, the
officers of this Corporation shall consist of a Chairman, a President,
one or more Executive Vice Presidents, Senior Vice Presidents and Vice
Presidents, a Secretary, a Treasurer, and such other officers as
appointed by the Board of Directors. Any two (2) or more offices may
be held by the same person.
Section 2. Appointment and Term of Office. The officers of the
Corporation shall be appointed annually by the Board of Directors at
the first meeting of the Board held after the shareholders' annual
meeting. If the appointment of officers does not occur at this
meeting, the appointment shall occur as soon thereafter as
practicable. Each officer shall hold office until a successor has
been duly appointed and qualified, or until an earlier resignation,
removal from office, or death.
Section 3. Removal of Officers. Any officer of the Corporation may
be removed from his or her office or position at any time, with or
without cause, by a majority vote of the Board of Directors. Any
officer or assistant officer, if appointed by another officer, may
likewise be removed by such officer.
Section 4. Resignation. Any officer of the Corporation may resign at
any time from his or her office or position by delivering notice to
the Corporation, the Board of Directors or its Chairman. Such
resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made
effective at a later date and the Corporation accepts the future
effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor
does not take office until the effective date.
Section 5. Duties. If so appointed by the Board of Directors, the
officers of this Corporation shall have the following duties:
(a) Chairman. The Chairman shall preside at all meetings of the
Board of Directors.
(b) President. Unless otherwise designated by the Board of
Directors, the President shall be the Chief Executive Officer of the
Corporation and shall, subject to the control of the Board of
Directors, in general, supervise and control all of the business and
affairs of the Corporation, and shall preside at all meetings of the
shareholders and all committees of the Board of Directors on which he
or she may serve, and in the absence of the Chairman, shall preside at
all meetings of the Board of Directors. During any time the President
is serving as the Chief Executive Officer, the President shall be a
member of the Board of Directors. In addition, the President may
cause to be called special meetings of the shareholders and directors
in accordance with these Bylaws.
(c) Executive, Senior and other Vice Presidents. One or more
Executive, Senior or other Vice Presidents may be designated by that
title or such additional title or titles as the Board of Directors may
determine. The duties of such Vice Presidents shall be as follows:
During the absence and inability of the President to perform his
duties or exercise his powers, as set forth in these Bylaws or in the
acts under which this Corporation is organized, the same shall be
performed and exercised by an Executive Vice President (in such order
of seniority as may be determined by the Board of Directors or,
failing such determination, as may be designated by the Chairman of
the Board); and when so acting, he shall have the powers and be
subject to all responsibilities hereby given to or imposed upon the
President. However, the Executive Vice President shall not become a
member of the Board of Directors unless elected by the Board of
Directors. The Executive, Senior and other Vice Presidents shall have
such powers and perform such duties as usually pertain to their
office, or as are assigned to them by the President or the Board of
Directors.
(d) Secretary. The Secretary shall have such powers and perform such
duties as are incident to the Office of Secretary of a Corporation, or
as are assigned to him by the President or the Board of Directors,
including the following:
(1) He shall keep the resolutions, forms of written consent, minutes
of the meetings of the Board of Directors and of the shareholders, and
other official records of the Corporation in appropriate books.
(2) He shall give and serve all notices of the Corporation.
(3) He shall be custodian of the records and of the corporate seal,
and affix the latter when required to authenticate the records of the
Corporation.
(4) He shall keep or cause to be kept the stock and transfer books in
the manner prescribed by law, so as to show at all times the amount of
capital stock, the manner and the time the same was paid in, the names
of the owners thereof, alphabetically arranged, their respective
places of residences, their post office addresses, the number of
shares owned by each, and the time at which each person became such
owner; and keep or cause to be kept such stock and transfer books open
daily during the business hours and at the main office of the
Corporation, or at such other place as may be designated by the
Secretary, subject to the inspection of such shareholders as are
authorized to inspect the same, as provided in Article I, Section 8 of
these Bylaws.
(5) He shall sign all certificates of stock.
(6) He shall present to the Board of Directors all communications
addressed to him officially by the President or any officer or
shareholder of the Corporation.
(7) He shall attend to all correspondence and perform all the duties
incident to the Office of Secretary.
(e) Treasurer. The Treasurer shall have custody of all corporate
funds and financial records, shall keep full and accurate accounts of
receipts and disbursements and shall perform such other duties as may
be prescribed by the Board of Directors or the President.
Section 6. Other Officers, Employees, and Agents. Each and every
other officer, employee, and agent of the Corporation shall possess,
and may exercise, such power and authority, and shall perform such
duties, as may from time to time be assigned to him or her by the
Board of Directors, the officer appointing him or her, and such
officer or officers who may from time to time be designated by the
Board to exercise supervisory authority.
ARTICLE V
SHARES OF STOCK
Section 1. Certificates for Shares. The Board of Directors shall
determine whether shares of the corporation shall be uncertificated or
certificated. If certificated shares are issued, certificates
representing shares in the Corporation shall be signed (either
manually or by facsimile) by the President or Vice President and the
Secretary or an Assistant Secretary and may be sealed with the seal of
the Corporation or a facsimile thereof. A certificate which has been
signed by an officer or officers who later shall have ceased to be
such officer when the certificate is issued shall nevertheless be
valid. Upon receipt of the consideration for which the Board of
Directors has authorized for the issuance of the shares, such shares
so issued shall be fully paid and nonassessable.
Section 2. Issuance of Shares. All certificates issued shall be
registered and numbered in the order in which they are issued. They
shall be issued in consecutive order, and on the face of each share
shall be entered the name of the person owning the shares represented
by the certificate, the number of shares represented by the
certificate, and the date of issuance of the certificate. No
certificate shall be issued for any share until such share is fully
paid.
Section 3. Transfer of Shares; Ownership of Shares. Transfers of
shares of stock of the Corporation shall be made only on the stock
transfer books of the Corporation, and only after the surrender to the
Corporation of the certificates representing such shares, if any, by
the person in whose name the shares stand on the books of the
Corporation, or his duly authorized legal representative. In all
cases of transfer, the former certificate must be surrendered and
canceled before a new certificate will be issued. In case of transfer
by an attorney-in-fact, the power of attorney, duly executed and
acknowledged, shall be deposited with the Secretary of the
Corporation.
Section 4. Lost, Stolen or Destroyed Certificates. The Corporation
shall issue a new stock certificate in the place of any certificate
previously issued if the holder of record of the certificate: (a)
makes proof in affidavit form that it has been lost, destroyed or
wrongfully taken; (b) requests the issuance of a new certificate
before the Corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice of
any adverse claim; (c) at the discretion of the Board of Directors,
gives bond in such form and amount as the Corporation may require, to
indemnify the Corporation, the transfer agent and registrar against
any claim that may be made on account of the alleged loss, destruction
or theft of such certificate; and (d) satisfies any other reasonable
requirements imposed by the Corporation.
ARTICLE VI
ACTIONS WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS
Unless otherwise directed by the Board of Directors, the President or
a designee of the President shall have the power to vote and to
otherwise act on behalf of the Corporation, in person or by proxy, at
any meeting of shareholders on, or with respect to, any action of
shareholders of any other Corporation in which this Corporation may
hold securities and to otherwise exercise any and all rights and
powers which this Corporation may possess by reason of its ownership
of securities in other corporations.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND AGENTS
Section 1. Insurance. The Board of Directors of the Corporation, in
its discretion, shall have authority on behalf of the Corporation to
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, partner,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of
this Article. The provisions of the following sections of this
Article VII shall apply only in the event that no such insurance is in
effect or, if such insurance is in effect, only to the extent that
matters for which indemnification by the Corporation is permitted by
such sections are not within the coverage of such insurance.
Section 2. Action Against a Party Because of Corporation Position.
The Corporation shall indemnify each director or officer, and may
indemnify, in its sole discretion, any employee or agent, each of whom
was or is a party, or is threatened to be made a party, to any
threatened, pending, or completed claim, action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other than
an action by, or in the right of, the Corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent
of the Corporation, as the case may be, or is or was serving at the
request of the Corporation as a director, partner, officer, employee,
or agent of another corporation, a partnership, joint venture, trust,
or other enterprise against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him or her in connection with such action, suit
or proceeding, including any appeal thereof, if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the Corporation and, with
respect to any criminal action or proceeding, had no reasonable cause
to believe his or her conduct was unlawful. The termination of any
claim, action, suit or proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent shall
not, in and of itself, create a presumption that the person did not
act in good faith and in a manner which he or she reasonably believed
to be in, or not opposed to, the best interests of the Corporation or,
with respect to any criminal action or proceeding, had reasonable
cause to believe that his or her conduct was unlawful.
Section 3. Action by or in the Right of Corporation. The Corporation
shall indemnify any director or officer of the Corporation, and may
indemnify, in its sole discretion, any employee or agent of the
Corporation, who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed claim, action or suit
by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he or she 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, partner, officer,
employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him or her in connection
with the defense or settlement of such claim, action, or suit,
including any appeal thereof, if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the
best interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue, or matter as to which
such person shall have been adjudged to be liable unless, and only to
the extent that, the court in which such claim, action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such court shall deem proper.
Section 4. Reimbursement if Successful. To the extent that the
director, officer, employee, or agent of the Corporation has been
successful on the merits or otherwise in defense of any claim, action,
suit, or proceeding referred to in Section 2 or Section 3 of this
Article VII, or in defense of any claim, issue, or matter therein, and
is indemnified by the Corporation against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith, he or she shall remain indemnified for such expenses,
notwithstanding that he or she had not been successful (on the merits
or otherwise) on any other claim, issue, or matter in any such claim,
action, suit or proceeding.
Section 5. Authorization. Any indemnification under Section 2 or
Section 3 of this Article VII (unless ordered by a court of competent
jurisdiction) shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the
director, officer, employee or agent, as the case may be, is proper in
the circumstances because he or she met the applicable standard of
conduct set forth in Section 2 or Section 3 of this Article VII. Such
determination shall be made:
(a) By a majority vote of a quorum of the Board of Directors;
however, for the purposes of this Subsection, a quorum shall consist
of directors who are or were not parties to such action, suit or
proceeding; or
(b) If such quorum is not obtainable, or even if obtainable, by the
majority vote of a committee duly designated by the Board of Directors
(in which directors who are parties may participate) consisting solely
of two or more directors not at the time parties to the proceeding; or
(c) By independent legal counsel that is (i) selected by the Board of
Directors as prescribed by Section 5(a) hereof or by the committee as
prescribed by Section 5(b) hereof, or (ii) if a quorum of the
directors cannot be obtained in accordance with Section 5(a) hereof
and a committee cannot be designated in accordance with Section 5(b)
hereof, selected by majority vote of the full Board of Directors
(including directors who are parties to the proceeding); or
(d) By the shareholders by a majority vote of a quorum consisting of
shareholders who are or were not parties to such action, suit or
proceeding, or if no such quorum is obtainable, by a majority vote of
shareholders who were not parties to such proceeding.
Section 6. Advance Reimbursement. Expenses, including attorneys'
fees, incurred in defending a civil or criminal action, suit, or
proceeding shall be paid by the Corporation to any officer or
director, and may be paid, in its sole discretion, to any agent or
employee, in advance of the final disposition of such action, suit or
proceeding, upon a preliminary determination, following one of the
procedures set forth in Section 5 of this Article VII, that the
director, officer, employee or agent, as the case may be, met the
applicable standard of conduct set forth in Section 2 or Section 3 of
this Article VII, or as authorized by the Board of Directors in the
specific case and, in either event, upon receipt of a written
commitment from or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be determined
that he or she is entitled to be indemnified by the Corporation as
authorized in this Article.
Section 7. Further Indemnification. Indemnification as provided in
this Article shall not be deemed exclusive. The Corporation may make
any other further indemnification of any of its directors, officers,
employees or agents that may be authorized under any statute, rule or
law, provision of Articles of Incorporation, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to
action in his official capacity and as to action in another capacity
while holding such office, provided, however, that indemnification or
advancement of expenses shall not be made to or on behalf of any
director, officer, employee or agent if a judgment or other final
adjudication establishes that his or her actions, or omissions to act,
were material to the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer,
employee or agent had reasonable cause to believe his or her conduct
was lawful or had no reasonable cause to believe his or her conduct
was unlawful;
(b) A transaction from which the director, officer, employee or agent
derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 of the Act are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interests of the Corporation in a proceeding by or in the right of the
Corporation to procure a judgment in its favor or in a proceeding by
or in the right of a shareholder of the Corporation.
Where such other provision provides broader rights of indemnification
than these Bylaws, such other provision shall control.
Section 8. Continuing Right of Indemnification. Indemnification as
provided in this Article shall continue as to a person who has ceased
to be a director, officer, employee, or agent, and shall inure to the
benefit of the heirs, executors, and administrators of such a person.
Section 9. Limitation on Indemnity and Reimbursement.
Notwithstanding any other provisions of this Article, in the event
that the Board of Directors determines that the action giving rise to
a claim for indemnity or expense reimbursement is the result of action
enumerated in any of the provisions set forth in Sections 7(a)-7(d)
hereof upon the part of the claimant, no such indemnity or expense
reimbursement shall be provided by the Corporation.
ARTICLE VIII
AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted, by either a majority of members of the Board of Directors or
a majority vote of the shareholders; provided that (i) the Board of
Directors may not alter, amend or repeal any Bylaw adopted by
shareholders if the shareholders specifically provide that such Bylaw
is not subject to amendment or repeal by the directors; and (ii) in
the case of any shareholder action, two-thirds (66 2/3%) of the
shareholders, acting only by voting at a special meeting, will be
required to amend any provision in Article I, Article II, Article VII
or this Article VIII.
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