As filed with the Securities and Exchange Commission on May 30,
1997
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
STERLING FINANCIAL CORPORATION
(Exact Name of Registrant As Specified In Its Charter)
Pennsylvania 23-2449551
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 North Pointe Blvd.
Lancaster, Pennsylvania 17601
- ------------------------------- -----------------
(Address of principal executive (Zip Code)
offices)
STERLING FINANCIAL CORPORATION 1996 STOCK INCENTIVE PLAN
----------------------------------------------------------
(Full title of the plan)
John E. Stefan, Chairman of the Board, Copies To:
President & Chief Executive Officer Nicholas Bybel, Jr., Esquire
STERLING FINANCIAL CORPORATION B. Tyler Lincoln, Esquire
101 North Pointe Boulevard SHUMAKER WILLIAMS, P.C.
Lancaster, Pennsylvania 17601-4133 Post Office Box 88
(717) 581-6030 Harrisburg, Pennsylvania
- ------------------------------------- 17108
(Name, address, including zip code, (717) 763-1121
and telephone number, including area
code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount Proposed Maximum
of Securities to to be Offering Price
be Registered Registered <F1> Per share <F2>
<S> <C> <C>
Common Stock,
$5.00 Par Value 500,000 $25.375
<CAPTION>
Title of Each Class Proposed Maximum Amount of
of Securities to Aggregate Registration
be Registered Offering Price <F2> Fee
<S> <C> <C>
Common Stock, $12,687,500.00 $3,844.70
$5.00 Par Value
<FN>
<F1> Based on the maximum number of shares of Sterling Financial
Corporation Common Stock, par value $5.00 per share, ("Common
Stock") authorized for issuance under the plans set forth above.
There are also registered hereby such indeterminate number of
shares of Common Stock as may become issuable by reason of the
anti-dilution provisions of this plan.
<F2> Estimated pursuant to Rule 457(c) and (h)(1) solely for the
purpose of calculating the amount of the registration fee based
upon the average of the closing bid and asked prices of the Common
Stock on May 28, 1997, with respect to the shares of Common Stock
issuable under the plan.
</FN>
</TABLE>
Page 1 of 60 Sequentially Numbered Pages
Index to Exhibits Found on Page 10
<PAGE>
TO PARTICIPANTS IN THE
STERLING FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
Sterling Financial Corporation (the "Company") has filed a
Registration Statement, concerning the shares of Common Stock,
$5.00 par value ( the "Common Stock") that the Company may, from
time to time, issue pursuant to the Sterling Financial Corporation
1996 Stock Incentive Plan, (the "Plan"). The Prospectus deemed to
form a part of the Registration Statement consists of certain
documents and explanatory memoranda regarding the Plan. Also
deemed to comprise part of the Prospectus, are the following
documents, each of which is specifically incorporated by reference
into the Registration Statement and each of which is on file with
the Securities and Exchange Commission (the "Commission") File No.
0-16276):
(a) the Company's Annual Report on Form 10-K for the year
ended December 31, 1996; and
(b) the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997.
All documents filed with the Commission by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, after the date of the Prospectus
and prior to the termination of the offering made hereby, shall be
deemed to be incorporated by reference in the Prospectus and to be
a part thereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of the Prospectus to the extent that a
statement contained herein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Prospectus.
<PAGE>
The Company will provide, without charge, to each participant
in the Plan who so requests, a copy of any or all of the documents
mentioned above, as well as, all documentation relating to the Plan
required to be delivered to participants pursuant to the rules
adopted under the Securities Act of 1933, as amended. Requests for
such copies should be addressed orally or in writing to:
Attention: John E. Stefan
Chairman of the Board, President and
Chief Executive Officer
Sterling Financial Corporation
101 North Pointe Boulevard
Lancaster, Pennsylvania 17601-4133
(717) 581-6030
May 27, 1997
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference in this
Registration Statement the following documents filed by the
Company with the Commission, under File No. 0-16276:
(a) Annual report on Form 10-K for the year ended December
31, 1996; and
(b) the Company's Quarter Report on Form 10-Q for the quarter
ended March 31, 1997.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment that indicates that all
securities offered have been sold or that deregisters all
securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be
a part hereof from the date of filing of such documents.
Any statements contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement,
to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.
The document(s) containing the information specified in Items
1 and 2 of Part I of this Form S-8 that will be sent or given to
the plan participants, as specified in Rule 428(b)(1) and in
accordance with the instructions to Part I of Form S-8, are not
filed with the Securities and Exchange Commission as a part of this
Registration Statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The general corporate law of the Commonwealth of Pennsylvania,
as applicable to the Company, together with the Company's By-laws,
provides the Company's officers and directors
II-1
<PAGE>
with a broad range of limitation from liability and indemnification
for actions and inactions in connection with the performance of
their duties. Aside from matters involving criminal statutes or
tax laws, directors are not personally liable for monetary damages
for any action or inaction taken unless the director has breached
or failed to perform his or her duties of office and such breach or
failure constitutes willful misconduct or recklessness. The
Company's officers and directors are entitled to be indemnified if
they are named as a party or threatened to be named as a party to
any type of proceeding as a result of actions or inactions taken
while in the course of their association with the Company provided
that such action or inaction was in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests
of the Company. Officers and directors of the Company will be
presumed to be entitled to this indemnification absent breaches of
fiduciary duty, lack of good faith or self-dealing and will be
entitled to be indemnified unless their conduct is determined by a
court to have constituted willful misconduct or recklessness.
To the extent that a director or officer of the Company has
been successful on the merits or otherwise in defense of any action
or proceeding relating to third party actions or relating to
derivative actions or in defense of any, claim, issue or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonable incurred in connection
therewith.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.
Item 7. Exemption From Registration Claimed
Not applicable.
II-2
<PAGE>
Items 8. Exhibits
Exhibit No.
3(i) Amended Articles of Incorporation of Sterling Financial
Corporation.
3(ii) Amended Bylaws of Sterling Financial Corporation.
4.1 Amended Articles of Incorporation of Sterling Financial
Corporation (included at Exhibit 3(i) of this Registration
Statement).
4.2 Amended Bylaws of Sterling Financial Corporation
(included at Exhibit 3(ii) of this Registration Statement).
4.3 Sterling Financial Corporation 1996 Stock Incentive Plan.
5 Opinion of Shumaker Williams, P.C.
23.1 Consent of Trout, Ebersole & Groff, LLP
23.2 Consent of Shumaker Williams, P.C.
(contained at Exhibit 5 of this Registration Statement).
24 Power of Attorney of Directors and Officers (included on
Signature Pages).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement; and
II-3
<PAGE>
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the registration statement; provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) shall not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934, and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities,
other than the payment of the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action suit or proceeding as
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the
City of Lancaster, Commonwealth of Pennsylvania, on May 27, 1997.
STERLING FINANCIAL CORPORATION
By: /s/ John E. Stefan
-------------------------------
John E. Stefan
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John E. Stefan and
Ronald L. Bowman, and each of them, his true and lawful attorney-in-fact, as
agent with full power of substitution and resubstitution for him and in his
name, place and stead, in any and all capacity, to sign any or all amendments
to this Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agents
full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises,
as fully and to all intents and purposes as they might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following person
in the capacities and on the dates indicated.
Capacity Date
/s/ John E. Stefan Chairman of the Board, May 27, 1997
- ------------------ President and Chief
John E. Stefan Executive Officer;
Director
(Principal Executive Officer)
/s/ Jere L. Obetz Senior Vice President/ May 27, 1997
- ------------------ Treasurer
Jere L. Obetz Chief Financial Officer
<PAGE>
/s/ Ronald L. Bowman Vice President/Secretary May 27, 1997
- -------------------- (Principal Accounting
Ronald L. Bowman Officer)
/s/ Richard H. Director May 27, 1997
Albright, Jr.
- ----------------------
Richard H. Albright,Jr.
/s/ Robert H. Caldwell Director May 27, 1997
- ----------------------
Robert H. Caldwell
Howard E. Groff, Jr. Director May 27, 1997
- ---------------------
Howard E. Groff, Jr.
Joan R. Henderson Director May 27, 1997
- --------------------
Joan R. Henderson
J. Robert Hess Director May 27, 1997
- -------------------
J. Robert Hess
/s/ Calvin G. High Director May 27, 1997
- -------------------
Calvin G. High
/s/ J. Roger Moyer, Executive Vice President May 27, 1997
Jr. /Assistant Secretary and
- ------------------- Director
J. Roger Moyer, Jr.
/s/ E. Glenn Nauman Director May 27, 1997
- -------------------
E. Glenn Nauman
/s/ Glenn R. Walz Director May 27, 1997
- ------------------
Glenn R. Walz
<PAGE>
Exhibit Index
Page Number
In Sequential
Numbering
Exhibit No. System
- ----------- -------------
3(i) Amended Articles of Incorporation 11
of Sterling Financial Corporation.
3(ii) Amended Bylaws of Sterling Financial 26
Corporation.
4.1 Amended Articles of Incorporation of
Sterling Financial Corporation
(included at Exhibit 3(i) of this
Registration Statement).
4.2 Amended Bylaws of Sterling Financial
Corporation (included at Exhibit
3(ii) of this Registration Statement).
4.3 Sterling Financial Corporation 47
1996 Stock Incentive Plan.
5 Opinion of Shumaker Williams, P.C. 56
23.1 Consent of Trout, Ebersole & Groff, LLP 59
23.2 Consent of Shumaker Williams, P.C.
(contained at Exhibit 5 of this
Registration Statement).
24 Power of Attorney of Directors and
Officers (included on Signature Pages).
EXHIBIT 3(i)
AMENDED ARTICLES OF INCORPORATION OF
STERLING FINANCIAL CORPORATION
<PAGE>
STERLING FINANCIAL CORPORATION
ARTICLES OF INCORPORATION
In compliance with the requirements of Section 204 of the
Business Corporation Law, Act of May 5, 1933 (P.L. 364, 15 P.S.
Section 1204), as amended, the Articles of Incorporation of
Sterling Financial Corporation shall read as follows:
ARTICLE 1
1. The name of the corporation is Sterling Financial
Corporation.
ARTICLE 2
2. The location and post office address of the initial
registered office of the corporation in this Commonwealth is:
525 Greenfield Road
P.O. Box 7268
Lancaster, Pennsylvania 17604-7268
ARTICLE 3
3. The corporation is incorporated under the Business
Corporation Law of the Commonwealth of Pennsylvania for the
purpose of engaging in and doing any lawful act concerning any
and all lawful business for which a corporation may be
incorporated under the Business Corporation Law of the
Commonwealth of Pennsylvania.
ARTICLE 4
4. The term for which the corporation is to exist is
perpetual.
ARTICLE 5
5. The aggregate number of shares which the corporation
shall have authority to issue is ten million (10,000,000) shares
of Common Stock of five Dollars ($5.00) par value per share.
ARTICLE 6
6. The name and post office address of each incorporator
and the number and class of shares subscribed for by such
incorporator are as follows:
Number and
Name Address Class of Shares
----- -------- ----------------
John E. Stefan 525 Greenfield Road One (1) share of
P.O. Box 7268 $5.00 Par value
Lancaster, common stock
Pennsylvania
17604-7268
ARTICLE 7
7. The first director of the corporation shall be John E.
Stefan, 525 Greenfield Road, P.O. Box 7268, Lancaster,
Pennsylvania 17604-7268.
ARTICLE 8
8. The shareholders of the corporation shall not have the
right to cumulate their votes for the election of directors.
ARTICLE 9
9. (a) Except as provided in Section (b) of this Article,
each shareholder of the corporation shall, subject to such terms
and conditions as may by resolution be established by the Board
of Directors, have the preemptive right to purchase: (i) shares
of the $5.00 par value common stock of the corporation which are
to be issued for cash, and (ii) any other securities or
obligations to be issued for cash by the corporation which are
(or which may through conversion, exercise or otherwise become)
entitled to vote in the election of directors. The Board of
Directors shall have full, complete and exclusive authority to
establish the terms and conditions upon which such
2
<PAGE>
preemptive rights shall be extended to and may be exercised by
the shareholders, which authority shall include, but shall not be
limited to, the power to fix the price at which such shares or
other securities or obligations shall be offered to the
shareholders, to establish the time and manner in which such
preemptive rights may be exercised, and to make such adjustments
as may be necessary to avoid the issuance of fractional interests
in shares or other securities or obligations. Shares or other
securities or obligations of the corporation which have been
offered to the shareholders pursuant to terms and conditions
established by the Board of Directors and which have not been
purchased by the shareholders in accordance therewith may at any
time thereafter be offered for sale to other persons at a price
which is not less than the price at which such shares or other
securities or obligations were offered to the shareholders.
(b) The preemptive rights provided for in Section (a) of
this Article shall not apply with respect to: (i) the sale of
shares or other securities or obligations of the corporation
which are held in the treasury of the corporation, (ii) the sale
or issuance of shares or other securities or obligations of the
corporation pursuant to the terms of any dividend reinvestment
plan or similar plan which may now exist or hereafter be adopted
by the corporation, (iii) the sale or issuance of shares or other
securities or obligations of the corporation to the employees of
the corporation or to employees of any subsidiary of the
corporation pursuant to any incentive stock option plan, non-qualified stock
option plan, employee stock purchase plan, or
other compensation plan which may now exist or hereafter be
adopted by the corporation; or (iv) the issuance of shares or
other securities or obligations of the corporation pursuant to
any merger, consolidation or other business acquisition
transaction.
ARTICLE 10
10. (a) Except as provided in Section (b) of this Article,
the affirmative vote of the holders of 75 percent of the
outstanding shares entitled to vote shall be required in order to
authorize the following corporate actions:
(1) Any merger or consolidation of the corporation or
any Subsidiary with or into any Interested Shareholder; or
3
<PAGE>
(2) Any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (whether in one transaction or in a
series of transactions) to, with or for the benefit of any
Interested Shareholder, of any assets of the corporation or of
any Subsidiary having an aggregate fair market value equal to or
greater than 5 percent of consolidated stockholders equity as
reported in the most recent year-end financial statements of the
corporation; or
(3) Any issuance, sale or transfer by the corporation
or by any Subsidiary, whether in one transaction or in a series
of transactions, of any securities of the corporation or of any
Subsidiary to any Interested shareholder in exchange for cash,
securities or other consideration having an aggregate fair market
value equal to or greater than 5 percent of consolidated
stockholders equity as reported in the most recent year-end
financial statements of the corporation; or
(4) Any purchase or other acquisition by the corporation
or by any Subsidiary, whether in one transaction or in a series
of transactions, of any securities of the corporation from an
Interested Shareholder in exchange for cash, securities or other
consideration having an aggregate fair market value equal to or
greater than 5 percent of consolidated stockholders equity as
reported in the most recent year-end financial statements of the
corporation; or
(5) The adoption of any plan or proposal for the
liquidation or dissolution of the corporation proposed by or on
behalf of an Interested Shareholder; or
(6) Any reclassification of stock (including any reverse
stock split) or recapitalization of the corporation, or any
merger or consolidation of the corporation with or into any
Subsidiary or any other transaction (whether or not with or into
or otherwise involving an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of stock of the
corporation or of any Subsidiary which is directly or indirectly
owned by any Interested Shareholder (other than a redemption
offer extended by the corporation pursuant to the provisions of
Article 11); or
(7) Any transaction or series of transactions which is
similar in purpose, form or effect to any of the foregoing.
4
<PAGE>
(b) The affirmative vote of the holders of sixty-six
and two thirds percent of the outstanding shares entitled to vote
shall be required in order to authorize any corporate action
described in Section (a) of this Article, if such corporate
action shall have been approved by resolution adopted by a
majority of the Continuing Directors.
(c) For purposes of this Article, the following terms
shall have the meanings set forth below:
(1) "Person" shall mean any individual, firm,
partnership, corporation or other entity.
(2) "Interested Shareholder" shall mean any person
(other than the corporation or any Subsidiary) which, as of the
record date for the determination of shareholders entitled to
vote on a proposed corporate action or immediately before the
consummation of such corporate action, is the beneficial owner,
directly or indirectly, of 15 percent or more of the outstanding
shares of the corporation entitled to vote and any Affiliate or
Associate of such person.
(3) A person shall be deemed to be the "beneficial
owner" of: (a) all shares owned, directly or indirectly, by such
person and by its Affiliates and Associates, and (b) all shares
which such person and its Affiliates and Associates have the
right to acquire or to vote pursuant to any agreement,
arrangement or understanding or upon the exercise of any
conversion right, exchange right, warrant, option or otherwise.
(4) "Subsidiary" shall mean any corporation of
which a majority of any class of equity security is owned,
directly or indirectly, by the corporation; provided, however,
that for purposes of the definition of Interested Shareholders
set forth in Section (c)(2) of this Article, the term
"Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly,
by the corporation.
(5) "Affiliate" shall mean any person which
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with
the person specified.
(6) "Associate," when used to indicate a
relationship with any person, means: (a) any corporation or
other organization (other than the corporation or a Subsidiary)
of which such person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10
5
<PAGE>
percent or more of any class of equity security, (b) any trust or
other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a
similar fiduciary capacity, and (c) any relative or spouse of
such person, or any relative of such spouse.
(7) "Continuing Director" shall mean: (a) any
member of the Board of Directors of the corporation who is
unaffiliated with and is not a representative of an Interested
Shareholder and who was a member of the Board of Directors prior
to the time that any Interested Shareholder became an Interested
Shareholder, and (b) any successor of a Continuing Director who
is unaffiliated with and is not a representative of an Interested
Shareholder and who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then members
of the Board of Directors.
(d) A majority of the Continuing Directors shall have
the power and duty to make factual determinations, on the basis
of information known to them after reasonable inquiry, as to all
facts relating to the application of this Article, including,
without limitation, the following: (i) whether a person is an
Interested Shareholder, (ii) the number of shares owned
beneficially by any person, and (iii) whether a person is an
Affiliate or Associate of another person. Any such determination
made in good faith shall be binding upon and conclusive with
respect to all parties.
(e) The vote specified in Sections (a) and (b) of this
Article shall be in addition to any vote which may otherwise be
required by law.
ARTICLE 11
11. (a) Except as provided in Section (b) of this Article,
in the event that any person shall acquire beneficial ownership
of 30 percent or more of the outstanding common stock of the
corporation, the corporation shall within thirty (30) days
thereafter extend to each shareholder of the corporation, other
than such person and any Affiliate or Associate of such person,
an offer in writing to redeem at any time within sixty (60) days
of the date of such offer all or any part of the common stock
owned by him at a redemption price per share equal to the
greatest of the following:
(1) the book value per share of the common stock of
the corporation as reported in the quarterly financial statement
of the corporation for the quarter ended immediately preceding
the date of the offer; or
6
<PAGE>
(2) the highest per share price paid by such person to
acquire any shares of the common stock of the corporation within
the 18 month period immediately preceding the date of the offer;
or
(3) the highest market price per share of the common
stock of the corporation on any trading day during the 18 month
period immediately preceding the date of the offer.
(b) The corporation shall not be required to extend
a redemption offer to any shareholder pursuant to the provisions
of Section (a) of this Article if a majority of the Continuing
Directors, by resolution adopted before the person involved has
acquired, directly or indirectly, beneficial ownership of 15
percent or more of the outstanding common stock of the
corporation, shall have approved the acquisition by such person
of 30 percent or more of the outstanding common stock of the
corporation.
(c) For purposes of this Article, the terms
"person," "Affiliate," "Associate" and "Continuing Director"
shall have the meanings set forth in Section (c) of Article 10.
(d) For purposes of this Article, beneficial
ownership shall be determined in accordance with the provisions
of Section (c)(3) of Article 10.
(e) A majority of the Continuing Directors shall
have the power and duty to make factual determinations, on the
basis of information known to them after reasonable inquiry, as
to all facts relating to the application of this Article,
including, without limitation, the following: (i) whether a
person shall have acquired beneficial ownership of 30 percent or
more of the outstanding common stock of the corporation, (ii)
when such acquisition shall be deemed to have occurred, (iii)
whether a person is an Affiliate or Associate of another person,
and (iv) the applicable redemption price per share. Any such
determination made in good faith shall be binding upon and
conclusive with respect to all parties.
(f) The rights conferred upon the shareholders of the
corporation in this Article are in addition to and shall
supplement any similar rights conferred upon them under any
applicable law, including, without limitation, the provisions of
Section 910 of the Pennsylvania Business Corporation Law (15 P.S.
Section 1910) as now or hereafter in effect.
7
<PAGE>
ARTICLE 12
12. (a) For purposes of this Article, the term
"Acquisition Proposal" shall mean any action, proposal, plan or
attempt by any person (as defined in Section (c)(1) of Article
10): (i) to make any tender or exchange offer for any equity
security of the corporation, (ii) to merge or consolidate the
corporation or any subsidiary of the corporation with or into
another corporation, (iii) to purchase or otherwise acquire all
or substantially all of the assets of the corporation or of any
subsidiary of the corporation, or (iv) to effect any other
transaction or series of transactions similar in purpose, form or
effect to any of the foregoing.
(b) The Board of Directors, when evaluating an
Acquisition Proposal shall, in connection with the exercise of
its judgment in determining what is in the best interests of the
corporation and its shareholders, give due consideration to all
relevant factors, including, without limitation, the following:
(1) The adequacy of the offered consideration, not
only in relation to the then current market price of the
securities of the corporation, but also in relation to: (a) the
historical, present and anticipated future operating results and
financial position of the corporation, (b) the value of the
corporation in a freely negotiated transaction, and (c) the
prospects and future value of the corporation as an independent
entity;
(2) The social and economic impact which the
Acquisition Proposal, if consummated, would have upon the
customers, depositors and employees of the corporation and its
subsidiaries and upon the communities which they serve;
(3) The reputation and business practices and
experience of the offeror and its management as they might
affect: (a) the business of the corporation and its
subsidiaries, (b) the future value of the securities of the
corporation, and (c) the customers, depositors and employees of
the corporation and its subsidiaries and the communities which
they serve; and
(4) The antitrust and other legal and regulatory
issues that might arise by reason of the Acquisition Proposal.
(c) The Board of Directors may, in its sole
discretion, oppose, approve or remain neutral with respect to an
Acquisition Proposal on the basis of its evaluation of what is in
the best interests of the corporation and its shareholders.
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(d) In the event that the Board of Directors
determines that an Acquisition Proposal is not in the best
interests of the corporation and its shareholders and should be
opposed, it may take any lawful action for this purpose,
including, without limitation, the following:
(1) Advising the shareholders of the corporation
of its opposition to the Acquisition Proposal;
(2) Authorizing the initiation of legal
proceedings;
(3) Authorizing the initiation of opposition
proceedings before any regulatory authority having jurisdiction
over the Acquisition Proposal;
(4) Authorizing the corporation to acquire its own
securities;
(5) Authorizing the corporation to issue
authorized but unissued securities, to sell treasury stock or to
grant options with respect thereto; and
(6) Soliciting a more favorable offer from a third
party.
ARTICLE 13
13. No director of the corporation shall be removed from
office by shareholder vote, except as follows:
(a) With cause, by the affirmative vote of the holders
of a majority of the then outstanding shares of stock of the
corporation entitled to vote generally in the election of
directors, voting together as a single class, at a meeting of
shareholders duly convened after notice to the shareholders of
such purpose (which notice shall be accompanied by a detailed
written explanation of the facts and circumstances constituting
the basis upon which the director is sought to be removed); or
(b) Without cause, by the affirmative vote of the
holders of not less than 75 percent of the then outstanding
shares of stock of the corporation entitled to vote generally in
the election of directors, voting together as a single class, at
a meeting of shareholders duly convened after notice to the
shareholders of such purpose.
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ARTICLE 14
14. (a) No action required to be taken or which may be
taken at any annual or special meeting of the shareholders or of
a class of the shareholders of the corporation may be taken
without a duly called meeting and the power of the shareholders
of the corporation to consent in writing to action without a
meeting is specifically denied, except that action may be taken
without a meeting, if: (i) the number of shareholders of record
is three or less, and (ii) a consent in writing setting forth the
action so taken is signed by all of the shareholders of record
and filed with the Secretary of the Corporation.
(b) A special meeting of the shareholders of the
corporation may be called only by: (i) the Chief Executive
Officer of the corporation, (ii) the Executive Committee of the
Board of Directors, or (iii) the Board of Directors pursuant to a
resolution adopted by the affirmative vote of a majority of the
whole Board of Directors. Special meetings may not be called by
the shareholders.
ARTICLE 15
15. The authority to make, amend, alter, change or repeal
the bylaws of the corporation is hereby expressly and solely
granted to and vested in the Board of Directors, subject always
to the power of the shareholders to make, amend, alter, change or
repeal the bylaws of the corporation by the affirmative vote of
the holders of not less than 75 percent of the then outstanding
shares of stock of the corporation entitled to vote generally in
the election of directors, voting together as a single class, at
a meeting of shareholders duly convened after notice to the
shareholders of such purpose.
ARTICLE 16
16. The Articles of Incorporation of the corporation may
not be amended, except as follows:
(a) Upon the affirmative vote of: (i) a majority of
the Continuing Directors (as defined in Section (c)(7) of Article
10), (ii) a majority of the whole Board of Directors, and (iii)
the holders of not less than a majority of the then outstanding
shares of stock of the corporation entitled
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to vote generally in the election of directors, voting together
as a single class, at a meeting of shareholders duly convened
after notice to the shareholders of such purpose; or
(b) Upon the affirmative vote of the holders of not
less than 75 percent of the then outstanding shares of stock of
the corporation entitled to vote generally in the election of
directors, voting together as a single class, at a meeting of
shareholders duly convened after notice to the shareholders of
such purpose.
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Microfilm Number ________________ Filed with the Department
of State on _____________
Entity Number ___________________ _________________________
Secretary of the
Commonwealth
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
ARTICLES OF AMENDMENT - DOMESTIC BUSINESS CORPORATION
In compliance with the requirements of 15 Pa.C.S. Section
1915 (relating to Articles of Amendment), the undersigned
business corporation, desiring to amend its Articles, does hereby
certify and state that:
1. The Name of the Corporation is:
Sterling Financial Corporation
2. The Address, including street and number, of its
Registered Office in this Commonwealth is (The Department of
State is hereby authorized to correct the following statement to
conform to the records of the Department):
101 North Pointe Boulevard, Lancaster County,
Lancaster, Pennsylvania 17601-4133
3. The Statute by or under which the Corporation was
Incorporated is:
Business Corporation Law of 1933, Act of May 5, 1933,
P.L. 364, as amended.
4. The Date of its Incorporation is:
February 23, 1987
5. The Manner in which the Amendment was Adopted by the
Corporation is:
The amendment was duly approved and adopted, and
proposed to the Shareholders by the Board of Directors of the
Corporation at a Meeting of the Board of Directors of the
Corporation duly called, convened and held on November 28, 1995.
The amendment was duly adopted by the Shareholders of the
Corporation pursuant
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to Section 1914(a) and (b) of the Business Corporation Law of
1988, as amended, at the 1996 Annual Meeting of Shareholders of
the Corporation duly called, convened and held pursuant to a
Notice of Annual Meeting of Shareholders, Proxy Statement, and
Form of Proxy dated March 29, 1996, and first sent on or about
March 29, 1996, by United States Mail, first class postage
prepaid, to the Shareholders of record as of the Record Date of
March 15, 1996. The 1996 Annual Meeting of Shareholders was held
at 9:00 a.m., prevailing time, on Tuesday, April 30, 1996, at
Willow Valley Family Resort and Conference Center, 2416 Willow
Street Pike, Lancaster, Pennsylvania. The total number of shares
outstanding was 5,938,110 with each share entitled to one vote.
The total number of shares entitled to vote was 5,938,110. The
total number of shares that voted for the amendment was
4,628,968; the total number of shares that voted against the
amendment was 39,084; and the total number of shares that
abstained from voting on the amendment was 77,792. Thus, the
amendment was approved and adopted by 77.95 percent of the
outstanding shares of Common Stock of the Corporation, which
constitutes more than the requisite percentage (a majority) of
the outstanding shares of Common Stock required to approve and
adopt the amendment.
6. The Amendment Adopted by the Corporation set forth in
full is:
5. The aggregate number of shares which the
Corporation shall have authority to issue is Thirty-five Million
(35,000,000) shares of Common Stock of the par value of Five
Dollars ($5.00) per share (the "Common Stock").
7. The Amendment shall be Effective upon the filing of
these Articles of Amendment with the Commonwealth of
Pennsylvania, Department of State, Corporation Bureau.
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IN TESTIMONY WHEREOF, the undersigned Corporation has caused
these Articles of Amendment to be signed by a duly authorized
officer and its corporate seal, duly attested by another such
officer, to be hereunto affixed this 30th day of April, 1996.
Attest: STERLING FINANCIAL CORPORATION
/s/ Ronald L. Bowman By: /s/ John E. Stefan
- ---------------------- ------------------------------
Ronald L. Bowman John E. Stefan
Secretary President
- ---------------------- ------------------------------
(TITLE: SECRETARY, (TITLE: PRESIDENT, VICE
ASSISTANT SECRETARY, ETC.) PRESIDENT, ETC.)
(CORPORATE SEAL)
EXHIBIT 3(ii)
AMENDED BYLAWS OF
STERLING FINANCIAL CORPORATION
<PAGE>
STERLING FINANCIAL CORPORATION
BYLAWS
Amended and Restated November 28, 1995
ARTICLE 1
SHAREHOLDER MEETINGS
Section 1.1. Annual Meeting. The annual meeting of
shareholders of the Company shall be held at such time and place
as may be fixed from time to time by the Board of Directors and
shall be held no later than the thirty-first day of May in each
year, when the shareholders shall elect members to the Board of
Directors and transaction such other business as may be properly
brought before the meeting.
Section 1.2. Special Meetings. Special meetings of the
shareholders may be called at any time by: (i) the Chief
Executive Officer, (ii) the Executive Committee of the Board of
Directors, or (iii) the Board of Directors pursuant to a
resolution adopted by the affirmative vote of the whole Board of
Directors. Special meetings may not be called by the
shareholders.
Section 1.3. Notice of Meetings. Written notice of all
meetings of shareholders shall be given to each shareholder of
record entitled to vote at the meeting at least ten (10) days
prior to the day of the meeting by mail addressed to the
shareholder at his address as it appears on the books of the
Company. Such notice shall state the date, hour and place of the
meeting and shall also state the general nature of the business
to be transacted in the case of a special meeting. Notices shall
be deemed to have been delivered when deposited in the United
States mail, postage prepaid, addressed to the shareholder at his
address as it appears on the books of the Company.
Section 1.4. Record Date. The Board of Directors may fix a
date not more than ninety (90) days prior to the date of any
meeting of shareholders, or the date fixed for the payment of any
dividends or distribution, or the date for the allotment of
rights, or the date when any change or conversion or exchange of
shares will be made or go into effect, as the record date for the
determination of the shareholders entitled to receive notice of,
and to vote at, any such meeting, or entitled to receive payment
of any such dividend or distribution, or to receive any such
allotment of rights or exercise such rights, as the case may be,
notwithstanding any transfer of any shares of the books of the
Company after any record date fixed as aforesaid. The Board of
Directors may close the books of the Company against transfers of
shares during the whole or any part of such period, and in such
case written or printed notice thereof to each shareholder shall
be mailed at least ten (10) days before the closing thereof to
each shareholder of record at the address appearing on the
records of the Company or supplied by him or her to the Company
for the purpose of notice. While the stock transfer books of the
Company are closed, no transfer of shares shall be made thereon.
If no record date is fixed by the Board of Directors for the
determination of shareholders entitled to
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receive notice of, and vote at, a shareholders meeting,
transferees of shares which are transferred on the books of the
Company within ten (10) business days next preceding the date of
such meeting shall not be entitled to notice of or vote at such
meeting.
Section 1.5. Voting List. The officer or agent having
charge of the transfer books for the shares of the Company shall
make, at least five (5) days before each meeting of shareholders,
a complete list of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of and
the number of shares held by each. Such list shall be kept on
file at the registered office of the Company until the time of
the meeting and, upon proper purpose shown in accordance with the
provisions of Section 308 of the Pennsylvania Business
Corporation Law (15 P.S. Section 1308) as now or hereafter in
effect, shall be: (i) subject to inspection by any shareholder
during usual business hours, (ii) made available for inspection
by any shareholder at any time during the meeting.
Section 1.6. Quorum and Majority Action. A majority of the
outstanding shares, represented in person or by proxy, shall
constitute a quorum at any meeting of shareholders. A majority
of votes cast shall decide each matter submitted to the
shareholders, except in cases where the vote of a larger number
of shares is required under the Articles of Incorporation or
these Bylaws or by law and except that in elections of directors,
the candidates receiving the highest number of votes shall be
elected.
Section 1.17. Voting of Shares. Each outstanding share
entitled to vote at a meeting shall be entitled to one (1) vote
on each matter. Shareholders shall not have the right to
cumulate their votes for the election of directors.
Shareholders may vote at any meeting of shareholders by
proxy duly authorized in writing. A proxy shall be valid only
for one meeting to be specified therein and any adjournments of
such meeting. Proxies shall be dated and shall be filed with the
Secretary of the Company.
Section 1.8. Conduct of Meetings. At every meeting of the
shareholders, the Chairman of the Board or, in his absence, the
President, or, in his absence, a chairman (who shall be one of
the officers, if any is present) chosen by the shareholders of
the Company present, shall act as chairman of the meeting. The
chairman of the meeting shall appoint a person to serve as
secretary of the meeting.
Section 1.9. No Action by Written Consent. No action
required to be taken or which may be taken at any annual or
special meeting of the shareholders or of a class of the
shareholders of the Company may be taken without a duly called
meeting and the power of the shareholders of the Company to
consent in writing to action without a meeting is specifically
denied, except that action may be taken without a meeting, if:
(i) the number of shareholders of record is three or less, and
(ii) a consent in writing setting forth the action so taken is
signed by all of the shareholders of record and filled with the
Secretary of the Company.
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ARTICLE II
DIRECTORS
Section 2.1. Powers. The business and affairs of the
Company and all Corporate powers shall be exercised by or under
the authority of the Board of Directors, subject to any
limitation imposed by law, the Articles of Incorporation, or
these Bylaws as to action which requires approval by the
shareholders.
Section 2.2. Number and Qualifications of Directors. The
Board of Directors shall consist of not less than one (1) nor
more than twenty-five (25) shareholders. The directors shall be
classified with respect to the time they shall severally hold
office by dividing them into three (3) classes, each consisting
as nearly as possible of one-third (1/3) of the number of the
whole Board of Directors; provided, however, that nothing herein
shall be construed to require exact equality in the number of
directors in each class. At the Annual Meeting of Shareholders
to be held in 1988, the directors of one class shall be elected
for a term of one (1) year; directors of a second class shall be
elected for a term of two (2) years; and directors of a third
class shall be elected for a term of three (3) years and at each
Annual Meeting of Shareholders thereafter the successors to the
class of directors whose term shall expire that year shall be
elected to hold office for a term of three (3) years, so that the
term of office of one (1) class of directors shall expire in each
year. The directors shall hold office until the expiration of
the term for which they were elected and until their successors
are elected and have qualified. The number of directors in each
class of directors shall be determined by the Board of Directors.
Any shareholder who owns in his own right shares of the
common stock of the corporation having an aggregate par value of
not less than $1,000.00 shall be eligible to be elected as a
director of the Company, except that no person shall be nominated
who will attain the age of seventy (70) years on or before the
date of the Annual Meeting of Shareholders at which he is to be
elected.
Section 2.3. Nomination of Directors. Only persons who are
nominated in accordance with the procedures set forth in this
Section 2.3 shall be eligible for election as directors. The
Board of Directors, or a duly appointed committee thereof, shall
act as a nominating committee for selecting nominees for election
as directors. Except in the case of a nominee substituted as a
result of the death or incapacity of a nominee of the nominating
committee, the nominating committee shall deliver written
nominations to the Secretary at least 90 days prior to the one
year anniversary date of the previous meeting of shareholders
called for election of directors. Provided such nominating
committee makes such nominations, no nominations for directors,
except those made by the nominating committee, shall be voted
upon at the annual meeting unless other nominations by
shareholders are made in accordance with the provisions of this
Section 2.3. No person shall be elected as a director of the
Company unless nominated in accordance with the procedures set
forth in this Section 2.3. Ballots bearing the names of all
persons nominated by the nominating committee and by shareholders
shall be provided for use at the annual meeting.
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Nominations of individuals for election to the Board of
Directors of the Company at an annual meeting of shareholders may
be made by any shareholder of the Company entitled to vote for
the election of directors at that meeting who complies with the
procedures set forth in this Section 2.3. Such nominations,
other than those made by the Board of Directors or a nominating
committee thereof, shall be made pursuant to timely notice in
writing to the Secretary of the Company as set forth in this
Section 2.3. To be timely, a shareholder's notice shall be
delivered to or received at the principal executive offices of
the Company not less than 90 days prior to the anniversary date
of the immediately preceding meeting of shareholders of the
Company called for the election of directors. Each such
shareholder's notice shall set forth: (a) the name and address
of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of stock of the Company
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed
in solicitations of proxies with respect to nominees for election
as directors, pursuant to regulation 14A under the Securities
Exchange Act of 1934, as amended, including, but not limited to,
information required to be disclosed by Items 4, 5, 6, and 7 of
Schedule 14A and information which would be required to be filed
on Schedule 14B with the Securities and Exchange Commission (or
any successors of such items or schedules); (e) the consent of
each nominee to serve as director of the Company if so elected;
and (f) the class and number of shares of stock of the Company
which are beneficially owned by such shareholder on the date of
such shareholder notice and, to the extent known, by any other
shareholders known by such shareholder to be supporting such
nominees on the date of such shareholder notice. At the request
of the Board of Directors, any person nominated by the Board of
Directors, or a nominating committee thereof, for election as a
director shall furnish to the Secretary of the Company that
information required to be set forth in a shareholder's notice of
nomination which pertains to the nominee together with the
required written consents, each as described herein.
The Board of Directors may reject any nomination by a
shareholder not timely made in accordance with the requirements
of this Section 2.3. If the Board of Directors, or a designated
committee thereof, determines that the information provided in a
shareholder's notice does not satisfy the informational
requirements of this Section in any material aspect, the
Secretary of the Company shall notify such shareholder of the
deficiency in the notice. The shareholder shall have an
opportunity to cure the deficiency by providing additional
information to the Secretary within such period of time, not to
exceed five days from the date such deficiency notice is given to
the shareholder, as the Board of Directors or such committee
shall reasonably determine. If the deficiency is not cured
within such period, or if the Board of Directors or such
committee reasonably determines that the additional information
provided by the shareholder, together with information previously
provided, does not satisfy the requirements of this Section 2.3
in any material respect, then the Board of Directors may reject
such shareholder's nomination. The Secretary of the Company
shall notify a shareholder in writing whether his nomination has
been made in accordance with the time and information requirements of this
Section 2.3. Notwithstanding the procedures set forth in this paragraph, if
neither the Board of Directors nor such committee makes a
determination as to the validity of any nominations by a
shareholder, the presiding officer of the annual meeting shall
determine and declare at the annual meeting whether the
nomination was made in accordance with the terms of this Section
2.3. If the presiding officer determines that a nomination was
made in accordance with the terms of this Section 2.3, he shall
so declare at the annual meeting and ballots shall be provided
for use at the annual meeting and the defective nomination shall
be disregarded.
Section 2.4. Elections. If directors of more than one
class are to be elected at a meeting of the shareholders by
reason of vacancy or otherwise, there shall be a separate
election for each class of directors to be elected at that
meeting.
Section 2.5. Organizational Meeting. An organizational
meeting may be held immediately following the annual shareholders
meeting without the necessity of notice to the directors to
constitute a legally convened meeting, or the directors may meet
at such time and place as may be fixed by either a vote or waiver
of notice or consent by all such directors, for the purpose of
organizing the new Board, appointing officers and transacting
such other business as properly may come before the meeting.
Section 2.6. Vacancies. A vacancy in the Board of
Directors shall occur in the case of the happening of any of the
following events: (a) a director shall die or resign; (b) the
shareholders shall fail to elect the number of directors
authorized to be elected at any meeting of shareholders at which
any director is to be elected; (c) the Board of Directors shall
by resolution have elected to increase the number of directors;
(d) the Board of Directors shall declare vacant the office of any
director for such cause as the Board may determine; or (e) a
vacancy shall occur for any other reason.
Any vacancy occurring in the Board of Directors shall be
filled by a majority of the remaining members of the Board of
Directors, though less than a quorum, and each person so elected
shall hold office until the next Annual Meeting of Shareholders
and until his successor is duly elected and has qualified.
Section 2.7. Place of Meetings. All meetings of the Board
of Directors shall be held at the administrative office of the
Company in Lancaster, Pennsylvania or at such other place within
or without this Commonwealth as may be designated from time to
time by a majority of the directors or as may be designated in
the notice calling the meeting.
Section 2.8. Regular Meetings. Regular meetings of the
Board of Directors shall be held not less than annually at a time
and place to be determined by the Board of Directors at the
preceding meeting or by resolution on an annual basis.
Section 2.9. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board, by
the President, or at the request of three (3) or more directors.
Not less than twenty-four (24) hours' notice of the date, time
and place of any special meeting of the
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Board of Directors shall be given to each director either: (a)
in person; (b) by telephone; or (c) by notice to the director's
personal residence or business address appearing on the books of
the Company by telephone, mail, telegram or written notice
delivered to such place.
Section 2.10. Quorum and Majority Action. A majority of all
the members of the Board of Directors in office shall constitute
a quorum for the transaction of business. If at any time fixed
for a meeting, including the meeting to organize the new Board
following the Annual Meeting of Shareholders, a quorum is not
present, the directors in attendance may adjourn the meeting from
time to time until a quorum is obtained and the meeting may be
held as adjourned without further notice. Except as otherwise
provided herein, a majority of those directors present at any
meeting of the Board of Directors at which a quorum is present
shall decide each matter considered.
A director may not vote by proxy or otherwise act by proxy
at a meeting of the Board of Directors.
Section 2.11. Conduct of Meetings. At every meeting of the
Board of Directors, the Chairman of the Board, or in his absence,
the President, or, in his absence, a chairman chosen by a
majority of the directors present, shall preside. A person to be
designated by the Chairman of the Board shall serve as secretary
of the Board of Directors.
One or more directors may participate in a meeting of the
Board of Directors by means of a conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other.
Section 2.12. Compensation. The Board of Directors, by the
affirmative vote of a majority of the directors then in office
and irrespective of any personal interest of any of its members,
shall have authority to establish a fee to be paid to each
director for attendance at meetings; provided, however, that no
such fee may be paid to any director who is also salaried
officer of the Company or of any subsidiary of the Company.
Section 2.13. Retirement. The office of a director shall
be considered vacant at the Annual Meeting of Shareholders next
following his attaining the age of seventy (70) years.
Section 2.14. Personal Liability of Directors.
(a) General Rule: A director of the Company shall not be
personally liable for monetary damages for any action taken or
any failure to take any action, except to the extent that
exemption from liability for monetary damages is not permitted
under the laws of the Commonwealth of Pennsylvania as now or
hereafter in effect. The provisions of this Subsection (a) are
intended to exempt the directors of the Company from liability
for monetary damages to the maximum extent permitted under the
Pennsylvania Directors' Liability Act (42 Pa. C.S. Section 8361 et
seq.) or under any other law now or hereafter in effect.
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(b) Specific Rule Under Directors' Liability Act: Without
limitation of Subsection (a) above, a director of the Company
shall not be personally liable for monetary damages for any
action taken or any failure to take any action, unless: (i) the
director has breached or failed to perform the duties of his
office under Section 8363 of the Directors' Liability Act, and
(ii) the breach or failure to perform constitutes self-dealing,
willful misconduct or recklessness. The provisions of the
preceding sentence shall not exempt a director from: (i) the
responsibility or liability of a director pursuant to any
criminal statute; or (ii) the liability of a director for the
payment of taxes pursuant to local, state or federal law.
(c) Modification or Repeal: The provisions of this Section
may be modified or repealed by the Board of Directors in
accordance with the procedures for amending these Bylaws;
provided, however, that any such modification or repeal shall not
have any effect upon the liability of a director relating to any
action taken, any failure to take any action, or events which
occurred prior to the effective date of such modification or
repeal.
(d) Effective Date: This Section shall become effective
immediately following the ratification of these Bylaws by the
shareholders of the Company.
ARTICLE III
COMMITTEES
Section 3.1. Authority. The Board of Directors, by
resolution adopted by a majority of the whole Board of Directors,
may create such permanent or temporary committees as the Board of
Directors deems necessary for the proper conduct of the business
of the company. Each committee shall consist of at least three
(3) directors and shall have and may exercise such powers as
shall be conferred or authorized by resolution of the Board and
which are not inconsistent with these Bylaws. The creation of
any committee and the delegation to it of authority shall not
relieve the Board of Directors of any responsibility imposed by
law upon it.
Section 3.2 Appointment of Committees. The Chairman of the
Board shall submit to the Board of Directors, at its first
meeting after the Annual Meeting of Shareholders, his
recommendations for the members of and chairmen of each standing
committee. The Board of Directors shall then appoint, in
accordance with such recommendations or otherwise, the members
and a chairman for each such committee. If the appointees accept
their appointment, they shall serve for one (1) year or until
their successors are appointed. The Board of Directors may fill
any vacancy occurring on any committee and may remove and replace
any member of any committee. A director may be a member of more
than one committee.
The Chairman of the Board and the President shall be ex-officio members of
all committees of the Board of Directors, except the Audit Committee (if one be
appointed).
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Section 3.3. Place and Notice of Committee Meetings. All
committee meetings shall be held at such place and time as may be
designated by the chairman of the committee or as may be
designated in the notice for the meeting.
Section 3.4. Conduct of Committees. A majority of the
membership of a committee shall constitute a quorum for the
transaction of business; provided, however, that in any case
where the Chairman of the Board and the President are members ex-officio of a
committee and have not been specifically appointed
to a committee by resolution of the Board of Directors, then the
number of members of that committee necessary to constitute a
quorum shall be that number which is a majority of the number of
members of that committee other than the ex-officio members, but,
for purposes of determining the presence of a quorum at any
meeting of that committee, any ex-officio members who are present
shall be counted. In any case, ex-officio committee members
shall be entitled to vote.
Regular meetings of a committee may be held, without call or
notice, at such times as the committee members decide or as the
Board of Directors may require. Special meetings of a committee
may be called at any time by its chairman or by the Chairman of
the Board or by the President. Except for its chairman (who
shall be appointed by the Board of Directors), each committee may
appoint a secretary and such other officers as the committee
members deem necessary. Each committee shall have the power and
authority to obtain from the appropriate officers of the Company
all information necessary for the conduct of the proper business
of the committee.
One or more directors may participate in a meeting of a
committee by means of conference telephone or similar
communication equipment by means of which all persons
participating in the meeting can hear each other.
Section 3.5. Executive Committee. There shall be a
standing committee of the Board of Directors to be known as the
Executive Committee consisting of: (i) the Chairman of the
Board, (ii) the President and (iii) not less than three (3) other
directors. In addition to the foregoing, the Board of Directors
may appoint as non-voting members of the Executive Committee
persons who are not directors of the Company. Such committee,
during the intervals between meetings of the Board of Directors,
shall exercise all the powers and authority of the Board of
Directors in the management of the affairs of the company, except
the power and authority to do the following: (a) to fill
vacancies in the Board of Directors and the Executive Committee;
(b) to propose to the shareholders amendment to the Articles of
Incorporation; (c) to make, alter, amend or repeal these Bylaws;
(d) to adopt or propose to the shareholders for adoption any plan
of merger, consolidation, liquidation, or dissolution; (e) to
approve the sale of substantially all of the assets of the
Company; (f) to approve the sale and issuance of long term debt;
(g) to declare dividends; (h) to authorize the issuance of stock;
or (i) to authorize redemption of stock or distributions to
shareholders. The Executive Committee shall keep minutes of its
proceedings and shall report on its activities at each regular
meeting of the Board of Directors.
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Meetings of the Executive Committee may be called from time
to time by the persons specified in Section 3.4 above or, in
their absence or inability to act, by a Vice President.
ARTICLE IV
OFFICERS
Section 4.1. Number and Titles. The officers of the
Company shall be a Chairman of the Board, a President, one or
more Vice Presidents, a Secretary, a Treasurer and such other
officers as may be appointed by the Board of Directors. The same
person may hold two (2) or more offices, except both the offices
of President and Secretary.
Section 4.2. Election and Term. The officers of the
Company, except such officers as may be appointed in accordance
with the provisions of Section 4.4 below, shall be elected
annually by the Board of Directors and shall hold office until
they shall resign, shall be removed or otherwise disqualified to
serve, or their successors shall be elected and have qualified.
Section 4.3. Chief Executive Officer. At the annual
organization meeting of the new Board of Directors, the Board
shall designate whether the Chairman of the Board or the
President or both shall have general executive powers and which
one shall be the Chief Executive Officer of the company.
Section 4.4. Subordinate Officers. The Chief Executive
Officer may appoint such other officers or agents as he may deem
necessary, subject to the authority of the Board of Directors to
disapprove any such appointment. A subordinate officer shall
hold office for such period, have such authority and perform such
duties as may be determined by the Chief Executive Officer. The
Board of Directors may delegate to any officer or committee the
power to appoint subordinate officers and to specify their duties
and authority and to determine their compensation.
Section 4.5. Chairman of the Board. The Chairman of the
Board shall be a member of the Board of Directors. The Chairman
of the Board shall, if present, preside at all meetings of the
Board of Directors and shall be an ex-officio member of all
committees of the Board of Directors except the Audit Committee
(if one be appointed). The Chairman of the Board shall supervise
the administration of the policies adopted or approved by the
Board of Directors and he shall also have and may exercise such
further powers and duties as from time to time may be conferred
upon or assigned to him by the Board of Directors. The Chairman
of the Board shall have authority to sign the share certificates
of the Company.
Section 4.6. President. The President of the Company shall
be a member of the Board of Directors. Subject to such
supervisory powers as may be given by the Board of Directors to
the Chairman of the Board, the President shall have and may
exercise any and all powers and duties of supervision, direction,
and control of the business and affairs of the Company vested by
law,
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regulation and practice in the office of President of a
corporation and, in addition, he shall also have and may exercise
such further powers and duties as from time to time may be
conferred upon or assigned to him by the Board of Directors. The
President shall be an ex-officio member of all committees of the
Board of Directors, except the Audit Committee (if one be
appointed). The President shall have the authority to sign the
share certificates of the Company.
Section 4.7. Vice President. Each Vice President of the
Company shall have such powers and duties as may be assigned to
him by the Board of Directors. One Vice President shall be
designated by the Board of Directors, in the absence or inability
act of the President, to perform all of the duties of the
President.
Section 4.8. Secretary. The Secretary of the Company shall
be responsible for the minute book of the Company. The Secretary
shall attest such documents as may be required and, in addition,
shall have and may exercise such further powers and duties as
from time to time may be conferred upon or assigned to him by the
Board of Directors. The Secretary shall have authority to sign
the share certificates of the Company.
Section 4.9. Treasurer. The Treasurer of the Company shall
be responsible for all of the Company's funds and securities,
shall be responsible for keeping complete and accurate records
relating thereto, and shall prepare such reports of the financial
condition of the Company as may from time to time be requested by
the Board of Directors. In addition, the Treasurer shall have
and may exercise such further powers and duties as from time to
time may be conferred upon or assigned to him by the Board of
Directors.
ARTICLE V
INDEMNIFICATION
Section 5.1. General Rule. Subject to the provisions of
Section 5.2 below, the Company shall, to the fullest extent
permitted under the laws of the Commonwealth of Pennsylvania was
now or hereafter in effect, indemnify any person (and his heirs,
executors and administrators) who was or is a party, witness or
other participant, or is threatened to be made a party, witness
or other participant, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (including, without limitation,
actions by or in the right of the corporation), by reason of the
fact that he is or was a director or officer of the Company, or
is or was serving at the request of the Company as a director or
officer of another corporation, partnership, joint venture, trust
or other enterprise, against all expenses (including attorneys'
fees, court costs, transcript costs, fees of experts and
witnesses, travel expenses and all other similar expenses),
judgments, fines, penalties and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit, or proceeding.
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Section 5.2. Standard of Conduct. Except as provided in
Section 5.4 below, indemnification shall be provided under
Section 5.1 above only if it is determined in accordance with the
procedure set forth in Section 5.3 below that: (i) the person
seeking indemnification acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the Company; and (ii) the act or failure to act giving rise to
the claim for indemnification does not constitute willful
misconduct or recklessness. Notwithstanding the foregoing, no
person shall be indemnified in any case where the act or failure
to act giving rise to the claim for indemnification is determined
by a court to have constituted willful misconduct or
recklessness.
Section 5.3. Procedure. Except as provided under Section
5.4 below, indemnification under Section 5.1 above (unless
ordered by a court) shall be made by the Company only as
authorized in the specific case upon a determination that
indemnification is proper in the circumstances because the person
seeking indemnification has met the applicable standard of
conduct set forth in Section 5.2 above. All such determinations
shall be made in accordance with the following procedure:
(a) Method of Determination: All determinations shall
be made as follows:
(1) If a Change in Control has occurred, unless
the person seeking indemnification shall have requested in
writing that such determination be made in accordance with
Subsection (2) below, the determination shall be made by
Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to the person
seeking indemnification; or
(2) If a Change in Control has not occurred, the
determination shall be made by the Board of Directors by majority
vote of a quorum consisting of directors who were not parties to
the action, suit, or proceeding in respect of which
indemnification is sought. In the event that such a quorum is
not obtainable, or, even if obtainable, a majority of such quorum
so directs, the determination shall be made by Independent
Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the person seeking indemnification.
(b) Section and Payment of Independent Counsel: In
the event that a determination is to be made by Independent
Counsel, such Independent Counsel shall be selected and his fee
paid as follows:
(1) If a Change in Control has not occurred, the
Independent Counsel shall be selected by the Board of Directors
and the law firm or person so selected shall be subject to the
approval of the person seeking indemnification, which approval
shall not be unreasonably withheld.
(2) If a Change in Control has occurred, the
Independent Counsel shall be selected by the person seeking
indemnification and the law firm or person so selected shall be
subject to the approval of the Board of Directors, which approval
shall not be unreasonably withheld.
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(3) The Company shall pay all reasonable fees and
expenses of the Independent Counsel.
(c) No Presumption: The termination of any action,
suit or proceeding referred to in Section 5.1 above or of any
claim, issue or matter therein, by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not of itself create a presumption that a person did not
act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Company or that
the act or failure to act giving rise to the claim for
indemnification constitutes willful misconduct or negligence.
Section 5.4. Successful Defense. Notwithstanding any other
provision of this Article, to the extent that a person has been
successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in Section 5.1 above, or in
defense of any claim, issue or matter therein, he shall be
indemnified by the Company against all expenses (including
attorneys' fees, court costs, transcript costs, fees of experts
and witnesses, travel expenses and all other similar expenses)
actually and reasonably incurred by him in connection therewith.
Section 5.5. Advance Payment of Expenses. Subject to such
terms, conditions and limitations, if any, as the Board of
Directors may in its discretion determine to be appropriate, the
Company shall advance all reasonable expenses (including
attorneys' fees, court costs, transcript costs, fees of experts
and witnesses, travel expenses and all other similar expenses)
reasonably incurred in connection with the defense of or other
response to any action, suit or proceeding referred to in Section
5.1 above upon receipt of an undertaking by or on behalf of the
person seeking the advance to repay all amounts advanced if it
shall ultimately be determined upon final disposition of such
action, suit or proceeding that he is not entitled to be
indemnified by the Company under the provisions of this Article.
Notwithstanding the provisions of the preceding sentence, the
Company shall not be required to make any advance payment of
expenses (or to make any further advance if one or more advances
shall have been previously made) in the event that a
determination is made by the Board of Directors that the making
of an advance or further advance would be inappropriate in the
circumstances because there is reason to believe that the person
seeking the advance did not meet the applicable standard of
conduct set forth in Section 5.2 above or otherwise.
Section 5.6. No Duplication of Payments. The Company shall
not be liable under this Article to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that the
person seeking indemnification has otherwise actually received
payment under any insurance policy, contract, agreement or
otherwise. In the event that the Company makes an advance
payment of expenses to or on behalf of any person, such person
shall repay to the Company the amount so advanced, if and to the
extent that he subsequently receives payment therefor under any
insurance policy, contract, agreement or otherwise.
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Section 5.7. Insurance. The Company may purchase and
maintain at its own expense one or more policies of insurance to
protect itself and to protect any director, officer, employee or
agent of the Company or of another corporation, partnership,
joint venture, trust or other enterprise against any expense,
liability or loss incurred by such person in such capacity,
whether or not the Company would have the authority to indemnify
such person against any such expense, liability or loss under
this Article or under the laws of the Commonwealth of
Pennsylvania.
Section 5.8. Indemnification Agreements. The Company
shall have authority by vote of a majority of the Board of
Directors to enter into an Indemnification Agreement with any
person who may be indemnified by the Company pursuant to the
provisions of this Article or otherwise. Any such
Indemnification Agreement may contain such terms and conditions
as a majority of the Board of Directors shall in the exercise of
their discretion determine to be necessary or appropriate,
provided that such terms and conditions may not be inconsistent
with the substantive provisions of this Article. The fact that
the Company has not entered into an Indemnification Agreement
with any person shall not in any way limit the indemnification
rights of such person under this Article or otherwise.
Section 5.9. Non-exclusivity. The right to indemnification
and to the payment of expenses incurred in defending against or
otherwise responding to any action, suit or proceeding in advance
of its final disposition as set forth in this Article shall not
be exclusive of any other rights which any person may now have or
hereafter acquire under any agreement, vote of shareholders, vote
of disinterested directors, or under any applicable law or under
the Articles of Incorporation of the Company, or otherwise.
Section 5.10. Certain Definitions. For purposes of this
Article, the following terms shall have the meanings set forth
below:
(a) Change in Control: Shall mean a change in
control of the kind that would be required to be reported in
response to Item 1 of Securities and Exchange Commission Form 8-K
promulgated under the Securities Exchange Act of 1934 and as in
effect on the effective date of this Article. Without limitation
of the foregoing, a Change in Control of the Company shall be
deemed to have occurred upon the occurrence of any of the
following events:
(1) Any person or group of persons acting in
concert, shall have acquired, directly or indirectly, beneficial
ownership of 20 percent or more of the outstanding shares of the
voting stock of the Company; or
(2) The composition of the Board of Directors of
the Company shall have changed such that during any period of 24
consecutive months, the persons who at the beginning of such
period were members of the Board of Directors cease for any
reason to constitute a majority of the Board of Directors, unless
the nomination or election of each director who was not a
director at the beginning of such period was approved in advance
by directors representing not less than two-thirds of the
directors then in office who were directors at the beginning of
the period; or
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(3) The Company shall be merged or consolidated
with or its assets purchased by another corporation and, as a
result of such merger, consolidation or sale of assets, less than
a majority of the outstanding voting stock of the surviving,
resulting or purchasing corporation is owned, immediately after
the transaction, by the holders of the voting stock of the
Company outstanding immediately before the transaction; or
(4) The shareholders of the Company shall have
approved any plan or proposal for the liquidation or dissolution
of the Company.
(b) Independent Counsel: Shall mean a law firm, or a
member of a law firm, that is experienced in matters of
corporation law and that has not in the immediately preceding
five years been retained to represent the Company, the person
seeking indemnification or any other party to the action, suit or
proceeding giving rise to the claim for indemnification.
Section 5.11. Survival of Rights. The indemnification
rights provided to a person under the provision of this Article
shall continue after such person ceases to be a director or
officer of the Company or of another entity, as to any action
taken, any failure to take action, or any events which occurred
while such person was a director or officer of the Company or of
another entity.
Section 5.12. Modification or Repeal. The provisions of
this Article may be modified or repealed by the Board of
Directors in accordance with the procedures for amending these
Bylaws; provided, however, that any such modification or repeal
shall not have any effect upon the indemnification rights of any
person as they relate to any action taken, any failure to take
action, or events which occurred prior to the effective date of
such modification or repeal.
Section 5.13. Effective Date. This Article shall become
effective immediately following the ratification of these Bylaws
by the shareholders of the Company and shall thereafter be
subject to modification or repeal by the Board of Directors as
provided in Section 5.12 above.
ARTICLE VI
EMERGENCIES
Section 6.1. Emergency Executive Committee. In the event
of any emergency declared by governmental authority, the result
of a regional or national disaster and of such severity as to
prevent the normal conduct and management of the affairs of the
Company by its directors and officers as contemplated by these
Bylaws, any three (3) available directors shall constitute the
Executive Committee and may exercise the full authority of that
committee until such time as a duly elected Board of Directors
can again assume full responsibility for and control of the
Company.
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ARTICLE VII
SHARE CERTIFICATES
Section 7.1. Requirements. The share certificates of the
Company shall be numbered and registered in a share register as
they are issued; shall bear the name of the registered holder,
the number and class of shares represented thereby, the par value
of each share or a statement that such shares are without par
value, as the case may be; shall be signed by the Chairman of the
Board or President and the Secretary or Treasurer or any other
person properly authorized by the Board of Directors, and shall
bear the corporate seal, which seal may be a facsimile engraved
or printed. Where the certificate is signed by a transfer agent
or a register, the signature of any corporate officer on such
certificate may be a facsimile engraved or printed. In case any
officer who has signed, or whose facsimile signature has been
placed upon, any share certificate shall have ceased to be such
officer because of death, resignation or otherwise before the
certificate is issued, it may be issued by the Company with the
same effect as if the officer had not ceased to be such at the
date of its issue.
ARTICLE VIII
TRANSFER OF SHARES
Section 8.1. Procedure. Upon surrender to the Company, or
its Transfer Agent in accordance with Article 8 of the
Pennsylvania Uniform Commercial Code, of a share certificate duly
endorsed by the person named in the certificate or by an attorney
duly appointed in writing and accompanied where necessary by
proper evidence of succession, assignment or authority to
transfer, a new certificate shall be issued to the person
entitled thereto and the old certificate cancelled and the
transfer recorded upon the transfer books for shares of the
Company. No transfer shall be made if it would be inconsistent
with the provisions of Article 8 of the Pennsylvania Uniform
Commercial Code.
ARTICLE IX
FINANCIAL REPORT TO SHAREHOLDERS
Section 9.1. Requirement. The Chairman of the Board and
the Board of Directors shall present prior to each annual meeting
of the shareholders a full and complete statement of the business
and affairs of the Company for the preceding year.
ARTICLE X
INSTRUMENTS
Section 10.1. Execution. Any note, mortgage, evidence or
indebtedness, contract or other document, or any assignment or
endorsement thereof, executed or entered into between the Company
and any other person, when signed by one or more officers or
agents having actual or apparent authority to sign it, or by the
Chairman of the Board, the President, or the Executive Vice
President and Secretary or Assistant Secretary or Treasurer or
Assistant Treasurer of the Company, shall be held to have been
properly executed for and on behalf of the Company.
Section 10.2. Seal. The affixation of the corporate seal
shall not be necessary to the valid execution, assignment or
endorsement by the Company of any instrument or other document.
ARTICLE XI
FISCAL YEAR
Section 11.1. Calendar Based. The fiscal year of the
Company shall be the calendar year.
ARTICLE XII
SEAL
Section 12.1. Requirements. The corporate seal shall have
inscribed thereon the name of the Company, the year of its
organization and the words "Corporate Seal, Pennsylvania". Such
seal may be used by causing it or a facsimile thereof to be
impressed or affixed in any manner reproduced.
ARTICLE XIII
NOTICES AND WAIVERS THEREOF
Section 13.1. Procedure. Whenever written notice is
required to be given any person under the provision of applicable
law, by the Articles of Incorporation or of these Bylaws, it may
be given to the person either personally or by sending a copy
thereof by first class or express mail, postage prepaid, or by
telegram (with messenger service specified), telex or TWX (with
answer back received) or courier service, charges prepaid, or by
telecopier, to his address (or to his telex, TWX, telecopier, or
telephone number appearing on the books of the Company or, in the
case of directors, supplied by him to the Company for the purpose
of notice. If the notice is sent by mail, telegraph or courier
service, it shall be deemed to have been given to the person
entitled thereto when
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deposited in the United States mail or with a telegraph office or
courier service for delivery to that person or, in the case of
telex or TWX, when dispatched. A notice of meeting shall specify
the place, day and hour of the meeting and any other information
required by any other provision of these Bylaws.
Section 13.2. Waiver. Whenever any written notice is
required to be given under the provision of applicable law, the
Articles of Incorporation or of these Bylaws, a waiver thereof in
writing, signed by the person or persons entitled to the notice,
whether before or after the time stated therein, shall be deemed
equivalent to the giving of the notice. Except as otherwise
required by these Bylaws, neither the business to be transacted
at, nor the purpose of, a meeting need be specified in the waiver
of notice of the meeting. In the case of a special meeting of
shareholders, the waiver of notice shall specify the general
nature of the business to be transacted.
Section 13.3. Attendance as Waiver of Notice. Attendance
of a person at any meeting shall constitute a waiver of notice of
the meeting except where a person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting was not
lawfully called or convened.
Section 13.4. When Notice is not Required. Whenever any
notice or communication is required to be given to any person
under the provisions of applicable law, the Articles of
Incorporation, these Bylaws, the terms of any agreement and any
other instrument or as a condition precedent to taking any
corporate action, and communication with that person is then
unlawful, the giving of the notice or communication to that
person shall not be required and there shall be no duty to apply
for a license or other permission to do so. Any action or
meeting that is taken or held without notice or communication to
that person shall have the same validity as if the notice or
communication had been duly given. If the action taken is such
as to require the filing of any document with respect thereto
under any provision of law or any agreement or other instrument,
it shall be sufficient, if such is the fact and if notice or
communication is required, to state therein that notice or
communication was given to all persons entitled to receive notice
or communication except persons with whom communication was
unlawful.
Section 13.5. When Shareholder is Incommunicado. Section
13.4 shall also be applicable to any shareholder with whom the
Company has been unable to communicate for more than twenty-four
(24) consecutive months because communications to the shareholder
are returned unclaimed or the shareholder has otherwise failed to
provide the Company with a current address. Whenever the
shareholder provides the Company with a current address, Section
13.4 shall cease to be applicable to the shareholder under this
Section 13.5.
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ARTICLE XIV
LOST CERTIFICATES
Section 14.1. Procedure. When a shareholder of the Company
alleges the loss, theft or destruction of one or more
certificates for shares of the Company and requests the issuance
of a substitute certificate therefor, the Board of Directors, or
authorized officers of the Company, may direct a new certificate
of the same tenor and for the same number of shares to be issued
to such person upon such person's making of an affidavit in form
satisfactory to the Board of Directors, or authorized officers of
the Company, setting forth the facts in connection therewith,
provided that prior to the receipt of such request the Company
shall not have either registered a transfer of such certificate
or received notice that such certificate has been acquired by a
bona fide purchaser. When authorizing such issue of a new
certificate the Board of Directors, or authorized officers of the
Company, may, in their discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his heirs or legal representatives, as
the case may be, to advertise the same in such manner as it shall
require and/or give the Company a bond in such form and with
surety or sureties, with fixed or open penalty, as shall be
satisfactory to the Board of Directors, as indemnity for any
liability or expense which it may incur by reason of the original
certificate remaining outstanding.
ARTICLE XV
DIVIDENDS
Section 15.1. Procedure. The Board of Directors may, from
time to time, at any duly convened regular or special meeting or
by unanimous consent in writing, declare and pay dividends upon
the outstanding shares of capital stock of the Company in cash,
property or shares of the Company, so long as any dividend shall
not be in violation of law and the Articles of Incorporation.
Section 15.2. Requirements. Before payment of any
dividend, there may be set aside out of any funds of the Company
available for dividends such sum or sums as the Board of
Directors from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
Company, or for such other purposes as the Board of Directors
shall believe to be for the best interests of the Company, and
the Board of Directors may reduce or abolish any such reserve in
the manner in which it was created.
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ARTICLE XVI
EMERGENCIES
Section 16.2. Bylaws. The Board of Directors may adopt
emergency Bylaws, subject to repeal or change by action of the
shareholders, which shall, notwithstanding any different
provisions of law, of the Articles of Incorporation or of these
Bylaws, be effective during any emergency resulting from an
attack on the United States, a nuclear disaster or another
catastrophe as a result of which a quorum of the Board of
Directors cannot readily be assembled. The emergency Bylaws may
make any provision that may be appropriate for the circumstances
of the emergency including, procedures for calling meetings of
the Board of Directors, quorum requirements for meetings and
procedures for designating additional or substitute directors.
Section 16.3. Lines of Succession. The Board of Directors,
either before or during any emergency, may provide, and from time
to time modify, lines of succession in the event that during the
emergency any or all officers or agents of the Company shall for
any reason be rendered incapable of discharging their duties and
may, effective in the emergency, change the head offices or
designate several, alternative head offices or regional offices
of the Company or authorize the officers to do so.
Section 16.4. Liability. A representative of the Company
acting in accordance with any emergency Bylaws shall not be
liable except for willful misconduct and shall not be liable for
any action taken by him in good faith in an emergency in
furtherance of the ordinary business affairs of the Company even
though not authorized by the emergency or other Bylaws then in
effect.
Section 16.5. Effect of Current Bylaws. To the extent not
inconsistent with any emergency Bylaws so adopted, the Bylaws of
the Company shall remain in effect during any emergency and, upon
its termination, the emergency Bylaws shall cease to be
effective.
Section 16.6. Notice. Unless otherwise provided in
emergency Bylaws, notice of any meeting of the Board of Directors
during an emergency shall be given only to those directors to
whom it is feasible to reach at the time and by such means as are
feasible at the time, including publication, radio or television.
To the extent required to constitute a quorum at any meeting of
the Board of Directors during any emergency, the officers of the
Company who are present shall, unless otherwise provided in
emergency Bylaws, be deemed, in order of rank and within the same
rank in order of seniority, directors for the meeting.
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ARTICLE XVII
USAGE OF TERMS
Section 17.1. Usage of Terms. Whenever in these Bylaws the
masculine gender is used, it shall be deemed to include the
feminine and neutered genders as well, and singular usage shall
include plural usage, and vice versa, all as the contents shall
require.
ARTICLE XVIII
AMENDMENT
Section 18.1. Procedure. The authority to make, amend,
alter, change or repeal the Bylaws of the Company is hereby
expressly and solely granted to and vested in the Board of
Directors, subject always to the power of the shareholders to
make, amend, alter, change or repeal the Bylaws by the
affirmative vote of the holders of not less than 75 percent of
the then outstanding shares of stock of the Company entitled to
vote generally in the election of directors, voting together as a
single class, at a meeting of shareholders duly convened after
notice to the shareholders of such purpose. The authority hereby
granted to and vested in the Board of Directors at any meeting of
the Board, provided that ten (10) days notice of the proposed
amendment has been given to each director.
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EXHIBIT 4.1
Amended Articles of Incorporation
of Sterling Financial Corporation
(included at Exhibit 3(i) of this
Registration Statement).
EXHIBIT 4.2
Amended Bylaws of Sterling Financial
(included at Exhibit 3(ii) of this
Registration Statement)
EXHIBIT 4.3
STERLING FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
<PAGE>
STERLING FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the
"Plan") is to advance the development, growth and financial
condition of Sterling Financial Corporation (the "Corporation")
and each subsidiary thereof as defined in Section 424 of the
Internal Revenue Code of 1986, as amended (the "Code"), by
providing incentives through participation in the appreciation of
capital stock of the Corporation so as to secure, retain and
motivate personnel who may be responsible for the operation and
management of the affairs of the Corporation and any such
subsidiary now or hereafter existing ("Subsidiary").
2. Term. The Plan shall become effective as of the date it
is adopted by the Corporation's Board of Directors (the "Board"),
so long as the Corporation's stockholders duly approve the Plan
within twelve (12) months either before or after the date of the
Board's adoption of the Plan. Any and all options and rights
awarded under the Plan ("Awards") before it is so approved by the
Corporation's stockholders shall be conditional upon and may not
be exercised before timely obtainment of such approval, and shall
lapse upon the failure thereof. If the Plan is so approved, it
shall continue in effect until all Awards either have lapsed or
been exercised, satisfied or cancelled according to their terms
under the Plan.
3. Stock. The shares of stock that may be issued under the
Plan shall not exceed in the aggregate 500,000 shares of the
Corporation's common stock, par value $5.00 per share (the
"Stock"), as may be adjusted pursuant to paragraph 18 hereof.
Such shares of Stock may be either authorized and unissued shares
of Stock, or authorized shares of Stock issued by the Corporation
and subsequently reacquired by it as treasury stock. Under no
circumstances shall any fractional shares of Stock be issued or
sold under the Plan or any Award. Except as may be otherwise
provided in the Plan, any Stock subject to an Award that for any
reason lapses or terminates prior to its exercise as to such
Stock shall become and again be available under the Plan. The
Corporation shall reserve and keep available, and shall duly
apply for any requisite governmental authority to issue or sell
the number of shares of Stock needed to satisfy the requirements
of the Plan while in effect. The Corporation's failure to obtain
any such governmental authority deemed necessary by the
Corporation's legal counsel for the lawful issuance and sale of
Stock under the Plan shall relieve the Corporation of any duty,
or liability for the failure to issue or sell such Stock as to
which such authority has not been obtained.
4. Administration. The Plan shall be administered by a
committee (the "Committee") consisting exclusively of two (2) or
more non-employee directors from the Board serving for such terms
as determined, selected and appointed by the Board. The Board
shall fill all vacancies occurring in the Committee's membership,
and at any time and for any reason may add additional members to
the Committee or may remove members from the Committee and
appoint their successors. Except as otherwise permitted under
Section 16(b) of the Securities Exchange Act of 1934, as amended,
and applicable rules and regulations thereto, a member of the
Committee must be a director of the Corporation and during the
year prior to commencing service on the Committee, and while a
member of the Committee, was not granted or awarded any Awards,
allocations or other options or rights of or with respect to
Stock or any other equity securities of the Corporation or its
affiliates pursuant to the Plan or any other plan of the
Corporation or its affiliates which provides for grants or
awards. A majority of the Committee's membership shall
constitute a quorum for the transaction of all business of the
Committee, and all decisions and actions taken by the Committee
shall be determined by a majority of the members of the Committee
attending a meeting at which a quorum of the Committee is
present.
The Committee shall be responsible for the management and
operation of the Plan and, subject to its provisions, shall have
full, absolute and final power and authority, exercisable in its
sole discretion: to interpret and construe the provisions of the
Plan, adopt, revise and rescind rules and regulations relating to
the Plan and its administration, and decide all questions of fact
arising in the application thereof; to determine what, to whom,
when and under what facts and circumstances Awards shall be made,
and the form, number, terms, conditions and duration thereof,
including but not limited to when exercisable, the number of
shares of Stock subject thereto, and Stock option purchase
prices; to adopt, revise and rescind procedural rules for the
transaction of the Committee's business, subject to any
directives of the Board not inconsistent with the provisions or
intent of the Plan or applicable provisions of law;
<PAGE>
and to make all other determinations and decisions, take all
actions and do all things necessary or appropriate in and for the
administration of the Plan. The Committee's determinations,
decisions and actions under the Plan, including but not limited
to those described above, need not be uniform or consistent, but
may be different and selectively made and applied, even in
similar circumstances and among similarly situated persons.
Unless contrary to the provisions of the Plan, all decisions,
determinations and actions made or taken by the Committee shall
be final and binding upon the Corporation and all interested
persons, and their heirs, personal and legal representatives,
successors, assigns and beneficiaries. No member of the
Committee or of the Board shall be liable for any decision,
determination or action made or taken in good faith by such
person under or with respect to the Plan or its administration.
5. Awards. Awards may be made under the Plan in the form
of: (a) "Qualified Options" to purchase Stock that are intended
to qualify for certain tax treatment as incentive stock options
under Sections 421 and 422 of the Code, (b) "Non-Qualified
Options" to purchase Stock that are not intended to qualify under
Sections 421-424 of the Code, (c) Stock appreciation rights
("SARs"), or (d) "Restricted Stock". More than one Award may be
granted to an eligible person, and the grant of any Award shall
not prohibit the grant of any other Award, either to the same
person or otherwise, or impose any obligation upon the person to
whom granted to exercise the Award. All Awards and the terms and
conditions thereof shall be set forth in written agreements, in
such form and content as approved by the Committee from time to
time, and shall be subject to the provisions of the Plan whether
or not contained in such agreements. Multiple Awards for a
particular person may be set forth in a single written agreement
or in multiple agreements, as determined by the Committee, but in
all cases each agreement for one or more Awards shall identify
each of the Awards thereby represented as a Qualified Option,
Non-Qualified Option, SAR, or Restricted Stock, as the case may
be. Every Award made to a person (a "Recipient") shall be
exercisable during his or her lifetime only by the Recipient, and
shall not be salable, transferable or assignable by the Recipient
except by his or her Will or pursuant to applicable laws of
descent and distribution.
6. Eligibility. Persons eligible to receive Awards shall
be those key officers and other management employees of the
Corporation and each Subsidiary as determined by the Committee.
In no case, however, shall any current member of the Committee be
eligible to receive any Awards. A person's eligibility to
receive Awards shall not confer upon him or her any right to
receive any Awards; rather, the Committee shall have the sole
authority, exercisable in its discretion consistent with the
provisions of the Plan, to select when, to whom and under what
facts and circumstances Awards will be made. Except as otherwise
provided, a person's eligibility to receive, or actual receipt of
Awards under the Plan shall not limit or affect his or her
benefits under or eligibility to participate in any other
incentive or benefit plan or program of the Corporation or its
affiliates.
7. Qualified Options. In addition to other applicable
provisions of the Plan, all Qualified Options and Awards thereof
shall be under and subject to the following terms and conditions:
(a) No Qualified Option shall be awarded more than ten
(10) years after the date the Plan is adopted by the Board or the
date the Plan is approved by the Corporation's stockholders,
whichever date is earlier;
(b) The time period during which any Qualified Option is
exercisable, as determined by the Committee, shall not commence
before the expiration of six (6) months or continue beyond the
expiration of ten (10) years after the date such Option is
awarded;
(c) If the Recipient of a Qualified Option ceases to be
employed by the Corporation or any Subsidiary for any reason
other than his or her death, the Committee may permit the
Recipient thereafter to exercise such Option during its remaining
term for a period of not more than three (3) months after such
cessation of employment to the extent that the Option was then
and remains exercisable, unless such employment cessation was due
to the Recipient's disability as defined in Section 422(e)(3) of
the Code, in which case such three (3) month period shall be
twelve (12) months; if the Recipient dies while employed by the
Corporation or a Subsidiary, the Committee may permit the
Recipient's qualified personal representatives, or any persons
who acquire the Qualified Option pursuant to his or her Will or
laws of descent and distribution,
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<PAGE>
thereafter to exercise such Option during its remaining term for
a period of not more than twelve (12) months after the
Recipient's death to the extent that the Option was then and
remains exercisable; the Committee may impose terms and
conditions upon and for said exercise of such Qualified Option
after such cessation of the Recipient's employment or his or her
death;
(d) The purchase price of a share of Stock subject to any
Qualified Option, as determined by the Committee, shall not be
less than the Stock's fair market value at the time such Option
is awarded, as determined under paragraph 13 hereof, or less than
the Stock's par value.
8. Non-Qualified Options. In addition to other applicable
provisions of the Plan, all Non-Qualified Options and Awards
thereof shall be under and subject to the following terms and
conditions:
(a) The time period during which any Non-Qualified
Option is exercisable, as determined by the Committee, shall not
commence before the expiration of six (6) months or continue
beyond the expiration of ten (10) years after the date such
Option is awarded;
(b) If a Recipient of a Non-Qualified Option, before
its lapse or full exercise, ceases to be eligible under the Plan,
the Committee may permit the Recipient thereafter to exercise
such Option during its remaining term, to the extent that the
Option was then and remains exercisable, for such time period and
under such terms and conditions as may be prescribed by the
Committee;
(c) The purchase price of a share of Stock subject to any
Non-Qualified Option, as determined by the Committee, shall not
be less than the Stock's fair market value at the time such
Option is awarded, as determined under paragraph 13 hereof.
9. Stock Appreciation Rights. In addition to other
applicable provisions of the Plan, all SARs and Awards thereof
shall be under and subject to the following terms and conditions:
(a) SARs may be granted either alone, or in connection
with another previously or contemporaneously granted Award (other
than another SAR) so as to operate in tandem therewith by having
the exercise of one affect the right to exercise the other, as
and when the Committee may determine; however, no SAR shall be
awarded in connection with a Qualified Option more than ten (10)
years after the date the Plan is adopted by the Board or the date
the Plan is approved by the Corporation's stockholders, whichever
date is earlier;
(b) Each SAR shall entitle its Recipient to receive upon
exercise of the SAR all or a portion of the excess of (i) the
fair market value at the time of such exercise of a specified
number of shares of Stock as determined by the Committee, over
(ii) a specified price as determined by the Committee of such
number of shares of Stock that, on a per share basis, is not less
than the Stock's fair market value at the time the SAR is
awarded;
(c) Upon exercise of any SAR, the Recipient shall be paid
either in cash or in Stock, or in any combination thereof, as the
Committee shall determine; if such payment is to be made in
Stock, the number of shares thereof to be issued pursuant to the
exercise shall be determined by dividing the amount payable upon
exercise by the Stock's fair market value at the time of
exercise;
(d) The time period during which any SAR is exercisable, as
determined by the Committee, shall not commence before the
expiration of six (6) months or continue beyond the expiration of
ten (10) years after the date such SAR is awarded; however, no
SAR connected with another Award shall be exercisable beyond the
last date that such other connected Award may be exercised;
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<PAGE>
(e) If a Recipient of a SAR, before its lapse or full
exercise, ceases to be eligible under the Plan, the Committee may
permit the Recipient thereafter to exercise such SAR during its
remaining term, to the extent that the SAR was then and remains
exercisable, for such time period and under such terms and
conditions as may be prescribed by the Committee;
(f) No SAR shall be awarded in connection with any
Qualified Option unless the SAR (i) lapses no later than the
expiration date of such connected Option, (ii) is for not more
than the difference between the Stock purchase price under such
connected Option and the Stock's fair market value at the time
the SAR is exercised, (iii) is transferable only when and as such
connected Option is transferable and under the same conditions,
(iv) may be exercised only when such connected Option may be
exercised, and (v) may be exercised only when the Stock's fair
market value exceeds the Stock purchase price under such
connected Option.
10. Restricted Stock. In addition to other applicable
provisions of the Plan, all Restricted Stock and Awards thereof
shall be under and subject to the following terms and conditions:
(a) Restricted Stock shall consist of shares of Stock that
may be acquired by and issued to a Recipient at such time, for
such or no purchase price, and under and subject to such
transfer, forfeiture and other restrictions, conditions or terms
as shall be determined by the Committee, including but not
limited to prohibitions against transfer, substantial risks of
forfeiture within the meaning of Section 83 of the Code, and
attainment of performance or other goals, objectives or
standards, all for or applicable to such time periods as
determined by the Committee;
(b) Except as otherwise provided in the Plan or the
Restricted Stock Award, a Recipient of shares of Restricted Stock
shall have all the rights as does a holder of Stock, including
without limitation the right to vote such shares and receive
dividends with respect thereto; however, during the time period
of any restrictions, conditions or terms applicable to such
Restricted Stock, the shares thereof and the right to vote the
same and receive dividends thereon shall not be sold, assigned,
transferred, exchanged, pledged, hypothecated, encumbered or
otherwise disposed of except as permitted by the Plan or the
Restricted Stock Award;
(c) Each certificate issued for shares of Restricted Stock
shall be deposited with the Secretary of the Corporation, or the
office thereof, and shall bear a legend in substantially the
following form and content:
This Certificate and the shares of Stock hereby
represented are subject to the provisions of the
Corporation's Stock Incentive Plan and a certain
agreement entered into between the owner and the
Corporation pursuant to said Plan. The release of this
Certificate and the shares of Stock hereby represented
from such provisions shall occur only as provided by
said Plan and agreement, a copy of which are on file in
the office of the Secretary of the Corporation.
Upon the lapse or satisfaction of the restrictions, conditions
and terms applicable to such Restricted Stock, a certificate for
the shares of Stock free thereof without such legend shall be
issued to the Recipient;
(d) If a Recipient's employment with the Corporation or a
Subsidiary ceases for any reason prior to the lapse of the
restrictions, conditions or terms applicable to his or her
Restricted Stock, all of the Recipient's Restricted Stock still
subject to unexpired restrictions, conditions or terms shall be
forfeited absolutely by the Recipient to the Corporation without
payment or delivery of any consideration or other thing of value
by the Corporation or its affiliates, and thereupon and
thereafter neither the Recipient nor his or her heirs, personal
or legal representatives, successors, assigns, beneficiaries, or
any claimants under the Recipient's Last Will or laws of descent
and distribution, shall have any rights or claims to or interests
in the
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<PAGE>
forfeited Restricted Stock or any certificates representing
shares thereof, or claims against the Corporation or its
affiliates with respect thereto.
11. Exercise. Except as otherwise provided in the Plan, Awards
may be exercised in whole or in part by giving written notice
thereof to the Secretary of the Corporation, or his or her
designee, identifying the Award being exercised, the number of
shares of Stock with respect thereto, and other information
pertinent to exercise of the Award. The purchase price of the
shares of Stock with respect to which an Award is exercised shall
be paid with the written notice of exercise, either in cash or in
Stock at its then current fair market value, or in any
combination thereof, as the Committee shall determine; provided,
that if the Stock tendered as payment for a Qualified Option was
acquired through the exercise of a Qualified Option, the
Recipient must have held such Stock for a period not less than
the holding period described in Code Section 422(a)(1). Funds
received by the Corporation from the exercise of any Award shall
be used for its general corporate purposes.
The number of shares of Stock subject to an Award shall be
reduced by the number of shares of Stock with respect to which
the Recipient has exercised rights under the Award. If a SAR is
awarded in connection with another Award, the number of shares of
Stock that may be acquired by the Recipient under the other
connected Award shall be reduced by the number of shares of Stock
with respect to which the Recipient has exercised his or her SAR,
and the number of shares of Stock subject to the Recipient's SAR
shall be reduced by the number of shares of Stock acquired by the
Recipient pursuant to the other connected Award.
The Committee may permit an acceleration of previously
established exercise terms of any Awards or the lapse of
restrictions thereon as, when, under such facts and
circumstances, and subject to such other or further requirements
and conditions as the Committee may deem necessary or
appropriate. In addition: (a) if the Corporation or its
stockholders execute an agreement to dispose of all or
substantially all of the Corporation's assets or capital stock by
means of sale, merger, consolidation, reorganization, liquidation
or otherwise, as a result of which the Corporation's stockholders
as of immediately before such transaction will not own at least
fifty percent (50%) of the total combined voting power of all
classes of voting capital stock of the surviving entity (be it
the Corporation or otherwise) immediately after the consummation
of such transaction, thereupon any and all Awards immediately
shall become and remain exercisable with respect to the total
number of shares of Stock still subject thereto for the remainder
of their respective terms unless the transaction is not
consummated and the agreement expires or is terminated, in which
case thereafter all Awards shall be treated as if said agreement
never had been executed; (b) if there is an actual, attempted or
threatened change in the ownership of at least twenty-five
percent (25%) of all classes of voting capital stock of the
Corporation, as determined by the Committee in its sole
discretion, through the acquisition of, or an offer to acquire
such percentage of the Corporation's voting capital stock by any
person or entity, or persons or entities acting in concert or as
a group, and such acquisition or offer has not been duly approved
by the Board, thereupon any and all Awards immediately shall
become and remain exercisable with respect to the total number of
shares of Stock still subject thereto for the remainder of their
respective terms; or (c) if during any period of two (2)
consecutive years, the individuals who at the beginning of such
period constituted the Board, cease for any reason to constitute
at least a majority of the Board, unless the election of each
director of the Board, who was not a director of the Board at the
beginning of such period, was approved by a vote of at least two-thirds of the
directors then still in office who were directors
at the beginning of such period, thereupon any and all Awards
immediately shall become and remain exercisable with respect to
the total amount of shares of Stock still subject thereto for the
remainder of their respective terms. If an event described in
(a), (b) or (c) occurs, the Committee shall immediately notify
the Recipients in writing of the occurrence of such event and
their rights under this paragraph 11.
12. Withholding. Whenever the Corporation is about to
issue or transfer Stock pursuant to any Award, the Corporation
may require the Recipient to remit to the Corporation an amount
sufficient to satisfy fully any federal, state and other
jurisdictions' income and other tax withholding requirements
prior to the delivery of any certificates for such shares of
Stock. Whenever payments are to be made in cash to any Recipient
pursuant to his or her exercise of an Award, such payments shall
be made net after deduction of all amounts sufficient to satisfy
fully any federal, state and other jurisdictions' income and
other tax withholding requirements.
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<PAGE>
13. Value. Where used in the Plan, the "fair market value" of
Stock or Options or rights with respect thereto, including
Awards, shall mean and be determined by: (a) in the event that
the Stock is listed on an established exchange, the closing price
of the Stock on the relevant date or, if no trade occurred on
that day, on the next preceding day on which a trade occurred,
(b) in the event that the Stock is not listed on an established
exchange, but is then quoted on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the
average of the average of the closing bid and asked quotations of
the Stock for the five (5) trading days immediately preceding the
relevant date, or (c) in the event that the Stock is not then
listed on an established exchange or quoted on NASDAQ, the
average of the average of the closing bid and asked quotations of
the Stock for five (5) trading days immediately preceding the
relevant date as reported by such brokerage firms which are then
making a market in the Stock. In the event that the Stock is not
listed on an established exchange, quoted on NASDAQ, and no
closing bid and asked quotations are available, fair market value
shall be determined in good faith by the Committee. In the case
of (b) or (c) above, in the event that no closing bid or asked
quotation is available on one or more of such trading days, fair
market value shall be determined by reference to the five (5)
trading days immediately preceding the relevant date on which
closing bid and asked quotations are available.
14. Amendment. To the extent permitted by applicable law, the
Board may amend, suspend, or terminate the Plan at any time;
provided, however, that: (a) no amendment may be adopted that
permits an Award to be granted to any member of the Committee;
(b) with respect to qualified options, except as specified in
paragraph 18 hereof, no amendment may be adopted that will
increase the number of shares reserved for Awards under the Plan,
change the option price, or change the provisions required for
compliance with Section 422 of the Code and regulations issued
thereunder. The amendment or termination of this Plan shall not,
without the consent of the Recipients, alter or impair any rights
or obligations under any Award previously granted hereunder.
In addition and subject to the foregoing, the Committee may
prescribe other or additional terms, conditions and provisions
with respect to the grant or exercise of any or all Awards as the
Committee may determine necessary or appropriate for such Awards
and the Stock subject thereto to qualify under and comply with
all applicable laws, rules and regulations, and changes therein,
including but not limited to the provisions of Sections 421 and
422 of the Code and Section 16 of the Securities Exchange Act of
1934, as amended. Without limiting the generality of the
preceding sentence, each Qualified Option, and any SAR awarded in
connection therewith, shall be subject to such other and
additional terms, conditions and provisions as the Committee may
deem necessary or appropriate in order to qualify such Option, or
connected Option and SAR, as an incentive stock option under
Section 422 of the Code, including but not limited to the
following provisions:
(i) the aggregate fair market value, at the time such
Option is awarded, of the Stock subject thereto and of any Stock
or other capital stock with respect to which incentive stock
options qualifying under Sections 421 and 422 of the Code are
exercisable for the first time by the Recipient during any
calendar year under the Plan and any other plans of the
Corporation or its affiliates, shall not exceed $100,000.00; and
(ii) No Qualified Option, or any SAR in connection
therewith, shall be awarded to any person if at the time of such
Award, such person owns Stock possessing more than ten percent
(10%) of the total combined voting power of all classes of
capital stock of the Corporation or its affiliates, unless at the
time such Option or SAR is awarded the Stock purchase price under
such Option is at least one hundred and ten percent (110%) of the
fair market value of the Stock subject to such Option and the
Option (and any SAR connected therewith) by its terms is not
exercisable after the expiration of five (5) years from the date
it is awarded.
From time to time, the Committee may rescind, revise and add to
any of such terms, conditions and provisions as may be necessary
or appropriate to have any Awards be or remain qualified and in
compliance with all applicable laws, rules and regulations, and
may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in
applicable laws, rules or regulations.
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<PAGE>
15. Continued Employment. Nothing in the Plan or any Award
shall confer upon any Recipient or other persons any right to
continue in the employment of, or maintain any particular
relationship with the Corporation or its affiliates, or limit or
affect any rights, powers or privileges that the Corporation or
its affiliates may have to supervise, discipline and terminate
such Recipient or other persons, and the employment and other
relationships thereof. However, the Committee may require as a
condition of making and/or exercising any Award that its
Recipient agree to, and in fact provide services, either as an
employee or in another capacity, to or for the Corporation or any
Subsidiary for such time period following the date the Award is
made and/or exercised as the Committee may prescribe. The
immediately preceding sentence shall not apply to any Qualified
Option to the extent such application would result in
disqualification of said Option as an incentive stock option
under Sections 421 and 422 of the Code.
16. General Restrictions. Each Award shall be subject to the
requirement and provision that if at any time the Committee
determines it necessary or desirable as a condition of or in
consideration of making such Award, or the purchase or issuance
or Stock thereunder, (a) the listing, registration or
qualification of the Stock subject to the Award, or the Award
itself, upon any securities exchange or under any federal or
state securities or other laws, (b) the approval of any
governmental authority, or (c) an agreement by the Recipient with
respect to disposition of any Stock (including without limitation
that at the time of the Recipient's exercise of the Award, any
Stock thereby acquired is being and will be acquired solely for
investment purposes and without any intention to sell or
distribute such Stock), then such Award shall not be consummated
in whole or in part unless such listing, registration,
qualification, approval or agreement shall have been
appropriately effected or obtained to the satisfaction of the
Committee and legal counsel for the Corporation.
17. Rights. Except as otherwise provided in the Plan, the
Recipient of any Award shall have no rights as a holder of the
Stock subject thereto unless and until one or more certificates
for the shares of such Stock are issued and delivered to the
Recipient. No adjustments shall be made for dividends, either
ordinary or extraordinary, or any other distributions with
respect to Stock, whether made in cash, securities or other
property, or any rights with respect thereto, for which the
record date is prior to the date that any certificates for Stock
subject to an Award are issued to the Recipient pursuant to his
or her exercise thereof. No Award, or the grant thereof, shall
limit or affect the right or power of the Corporation or its
affiliates to adjust, reclassify, recapitalize, reorganize or
otherwise change its or their capital or business structure, or
to merge, consolidate, dissolve, liquidate or sell any or all of
its or their business, property or assets.
18. Adjustments. In the event of any change in the number of
issued and outstanding shares of Stock which results from a stock
split, reverse stock split, payment of a stock dividend or any
other change in the capital structure of the Corporation, the
Committee shall proportionately adjust the maximum number of
shares subject to each outstanding Award, and (where appropriate)
the purchase price per share thereof (but not the total purchase
price under the Award), so that upon exercise or realization of
such Award, the Recipient shall receive the same number of shares
he or she would have received had he or she been the holder of
all shares subject to his or her outstanding Award and
immediately before the effective date of such change in the
number of issued and outstanding shares of Stock. Such
adjustments shall not, however, result in the issuance of
fractional shares. Any adjustments under this paragraph 18 shall
be made by the Committee, subject to approval by the Board. No
adjustments shall be made that would cause a Qualified Option to
fail to continue to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
In the event the Corporation is a party to any merger,
consolidation or other reorganization, any and all outstanding
Awards shall apply and relate to the securities to which a holder
of Stock is entitled after such merger, consolidation or other
reorganization. Upon any liquidation or dissolution of the
Corporation, any and all outstanding Awards shall terminate upon
consummation of such liquidation or dissolution, but prior to
such consummation shall be exercisable to the extent that the
same otherwise are exercisable under the Plan.
19. Forfeiture. Notwithstanding anything to the contrary
in this Plan, if the Committee finds after full consideration of
the facts presented on behalf of the Corporation and the involved
Recipient, that he or she has been engaged in fraud,
embezzlement, theft, commission of a felony, or dishonesty in the
course of his or her employment by the Corporation or any
Subsidiary that has damaged it, or that the Recipient has
disclosed trade secrets of
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<PAGE>
the Corporation or its affiliates, the Recipient shall forfeit
all rights under and to all unexercised Awards, and all exercised
Awards under which the Corporation has not yet delivered payment
or certificates for shares of Stock (as the case may be), all of
which Awards and rights shall be automatically canceled. The
decision of the Committee as to the cause of the Recipient's
discharge from employment with the Corporation or any Subsidiary
and the damage thereby suffered shall be final for purposes of
the Plan, but shall not affect the finality of the Recipient's
discharge by the Corporation or Subsidiary for any other
purposes. The preceding provisions of this paragraph shall not
apply to any Qualified Option to the extent such application
would result in disqualification of said Option as an incentive
stock option under Sections 421 and 422 of the Code.
20. Indemnification. In and with respect to the administration
of the Plan, the Corporation shall indemnify each present and
future member of the Committee and/or of the Board, who shall be
entitled without further action on his or her part to indemnity
from the Corporation for all damages, losses, judgments,
settlement amounts, punitive damages, excise taxes, fines,
penalties, costs and expenses (including without limitation
attorneys' fees and disbursements) incurred by such member in
connection with any threatened, pending or completed action, suit
or other proceedings of any nature, whether civil,
administrative, investigative or criminal, whether formal or
informal, and whether by or in the right or name of the
Corporation, any class of its security holders, or otherwise, in
which such member may be or have been involved, as a party or
otherwise, by reason of his or her being or having been a member
of the Committee and/or of the Board, whether or not he or she
continues to be such a member. The provisions, protection and
benefits of this paragraph shall apply and exist to the fullest
extent permitted by applicable law to and for the benefit of all
present and future members of the Committee and/or of the Board,
and their respective heirs, personal and legal representatives,
successors and assigns, in addition to all other rights that they
may have as a matter of law, by contract, or otherwise, except
(a) as may not be allowed by applicable law, (b) to the extent
there is entitlement to insurance proceeds under insurance
coverage provided by the Corporation on account of the same
matter or proceeding for which indemnification hereunder is
claimed, or (c) to the extent there is entitlement to
indemnification from the Corporation, other than under this
paragraph, on account of the same matter or proceeding for which
indemnification hereunder is claimed.
21. Miscellaneous. Any reference contained in this Plan to a
particular section or provision of law, rule or regulation,
including but not limited to the Internal Revenue Code of 1986
and the Securities Exchange Act of 1934, both as amended, shall
include any subsequently enacted or promulgated section or
provision of law, rule or regulation, as the case may be, of
similar import. With respect to persons subject to Section 16 of
the Securities Exchange Act of 1934, as amended, transactions
under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or any successor rule that may be
promulgated by the Securities and Exchange Commission, to the
extent any provision of this Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the
extent permitted by applicable law and deemed advisable by the
Committee, and to the extent that there are additional
requirements under Rules 16b-3, it is the responsibility of the
participants to satisfy such requirements. Where used in this
Plan: the plural shall include the singular, and unless the
context otherwise clearly requires, the singular shall include
the plural; and, the term "affiliates" shall mean each and every
Subsidiary and any parent of the Corporation. The captions of
the numbered paragraphs contained in this Plan are for
convenience only, and shall not limit or affect the meaning,
interpretation or construction of any of the provisions of the
Plan.
- - - - - - - - - - -
END
- - - - - - - - - - -
EXHIBIT 5
OPINION OF SHUMAKER WILLIAMS, P.C.
<PAGE>
SHUMAKER WILLIAMS, P.C.
3425 Simpson Ferry Road
Camp Hill, Pennsylvania 17011
(717) 763-1121
May 27, 1997
John E. Stefan
Chairman of the Board, President and
Chief Executive Officer
STERLING FINANCIAL CORPORATION
North Pointe Boulevard
Lancaster, PA 17601-4133
RE: Sterling Financial Corporation (the
"Corporation") Registration Statement
Form S-8
Our File No. 639-97
Dear Mr. Stefan:
We have acted as Special Corporate Counsel to the
Corporation in connection with preparation of the Corporation's
Registration Statement on Form S-8 relating to the Corporation's
1996 Stock Incentive Plan (the "Plan").
In connection with this matter, we, as counsel to the
Corporation, have reviewed the following:
1. the Pennsylvania Business Corporation Law of 1988, as
amended;
2. the Corporation's Articles of Incorporation;
3. the Corporation's By-Laws;
4. Resolutions adopted by the Corporation's Board of
Directors on November 19, 1996; and
5. the Plan.
Based upon such review, it is our opinion that the
Corporation's common stock, $5.00 par value, (the "Common Stock")
issuable under the Plan, when and as issued in accordance with
the provisions of the Plan, will be duly and validly issued,
fully paid and nonassessable. In giving the foregoing opinion,
we have assumed that the Corporation will have, at the time of
the issuance of Common Stock under the Plan, a sufficient number
of authorized shares available for issue.
<PAGE>
John E. Stefan
STERLING FINANCIAL CORPORATION
May 27, 1997
Page 2
We hereby consent to the use of this opinion as an exhibit
to the Registration Statement on Form S-8, filed by the
Corporation, relating to the Plan.
Very truly yours,
SHUMAKER WILLIAMS, P.C.
By /s/ B. Tyler Lincoln
------------------------
B. Tyler Lincoln
BTL/ksn
cc: Nicholas Bybel, Jr., Esquire
EXHIBIT 23.1
CONSENT OF TROUT, EBERSOLE & GROFF LLP
<PAGE>
TROUT, EBERSOLE & GROFF, LLP
Certified Public Accountants
----------------------------
1705 Oregon Pike
Lancaster, Pennsylvania 17601
(717) 569-2900
Fax (717) 569-0141
Consent of Independent Auditors
We consent to the incorporation by reference in the
Registration Statement on Form S-8 relating to the Sterling
Financial Corporation 1996 Stock Incentive Plan of our report
dated January 24, 1997, with respect to the consolidated
financial statements of Sterling Financial Corporation
incorporated by reference in its Annual Report on Form 10-K for
the year ended December 31, 1996, and filed with the Securities
and Exchange Commission.
/s/ Trout, Ebersole & Groff, LLP
--------------------------------
TROUT, EBERSOLE & GROFF, LLP
May 16, 1997
Lancaster, Pennsylvania
EXHIBIT 23.2
Consent of Shumaker Williams, P.C.
(contained at Exhibit 5 of this Registration Statement)
EXHIBIT 24
Power of Attorney of Directors
and Officers (included on Signature Pages)
