FIRST MERCHANTS ACCEPTANCE CORP, 10-K405/A, 1997-04-30

FIRST MERCHANTS ACCEPTANCE CORP
10-K405/A, 1997-04-30
PERSONAL CREDIT INSTITUTIONS

Previous: CINEMA RIDE INC, 10KSB/A, 1997-04-30

Next: MITCHAM INDUSTRIES INC, 10KSB, 1997-04-30

<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K/A1

(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 1996

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ________ TO ________

COMMISSION FILE NUMBER 0-24686

FIRST MERCHANTS ACCEPTANCE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 36-3759045
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization

570 Lake Cook Road
Suite 126
Deerfield, Illinois 60015
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (847) 948-9300

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act Common Stock,
$.01 par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such
<PAGE> 2

shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes X No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

The aggregate market value of the Registrant's voting Common Stock (based
on the closing price of such shares on the Nasdaq Stock Market's National
Market on April 24, 1997) held by non-affiliates was approximately $11,100,000.
Common Stock held by each officer and director and each person who owns 5% or
more of the outstanding Common Stock has been excluded in that such persons may
be deemed affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

On April 24, 1997, the following number of shares of the Company's capital
stock were outstanding:

Common Stock 6,396,519
Class B Common Stock None

Portions of the Annual Report to Stockholders for the year ended December 31,
1996 are incorporated by reference into Part II in this report.

-2-
<PAGE> 3

This Annual Report on Form 10-K/A1 is intended to amend certain
information contained in the Annual Report on Form 10-K of First Merchants
Acceptance Corporation (the "Company") for the year ended December 31,1996. As
previously disclosed in a Current Report on Form 8-K dated April 16, 1997, the
Company discovered irregularities involving unauthorized entries made in the
Company's financial records and expects that it will restate its previously
reported results for 1996. The Company expects to file with the Securities and
Exchange Commission (the "Commission") an additional amendment to this Form
10-K to reflect the results of the restatement. The Company also anticipates
scheduling the date of its 1997 Annual Meeting of Stockholders in the near
future.

ITEM 3. LEGAL PROCEEDINGS

On August 27, 1996, a purported class action entitled Mercedes Hoffman v.
Grossinger Motor Corp. and First Merchants Acceptance Corporation was filed in
the United States District Court for the Northern District of Illinois. The
complaint, as amended on September 27, 1996 ("Complaint"), alleges violations
of certain Federal and Illinois consumer protection statutes and RICO and seeks
unspecified damages. The Company believes that certain material allegations in
the Complaint are incorrect and that it has meritorious defenses to the claims
made in the Complaint. The Company intends to vigorously defend this action.

Between April 18, 1997 and April 25, 1997, the Company and certain of its
directors and former officers were named as defendants in seven purported class
actions filed in the United States District Court for the Northern District of
Illinois, entitled respectively: Milton Castillo, Jr. and Chris Vines v.
Mitchell C. Kahn, Thomas R. Ehmann, and First Merchants Acceptance Corporation;
Samuel Zucker v. First Merchants Acceptance Corporation and Mitchell C. Kahn;
Harry Lax v. First Merchants Acceptance Corporation, Mitchell Kahn, Thomas
Ehmann and Paul Van Eyl; Jared Hershkowitz v. Mitchell Kahn, Thomas Ehmann,
Paul Van Eyl and First Merchants Acceptance Corporation; Sanders Family
Partners v. First Merchants Acceptance Corp., Mitchell C. Kahn, Thomas Ehmann
and Paul Van Eyl; Howard Hertzberg v. First Merchants Acceptance Corp.,
Mitchell C. Kahn, Thomas Ehmann and Paul Van Eyl; and Robert Miller v. First
Merchants Acceptance Corp., Mitchell Kahn, Thomas Ehmann, Paul Van Eyl, Marcy
H. Shockey, Solomon A. Weisgal and Stowe W. Wyant. Each of the lawsuits
generally alleges that the Company issued false and misleading financial
statements and press releases concerning the Company's income and earnings in
violation of Section 10 of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder. The actions seek unspecified damages. The Company is
investigating the allegations set forth in the complaints.

No assurances can be given as to the outcome of the litigation referred to
above or the effects of such litigation on the financial condition or future
results of operations of the Company. The Company is also involved from time
to time in other litigation incidental to its business.

EXECUTIVE OFFICERS OF THE REGISTRANT

As previously disclosed in a Current Report on Form 8-K dated April 16,
1997, the Board of Directors terminated the employment of Mitchell C. Kahn,
President and Chief Executive Officer, Thomas R. Ehmann, Vice President and
Chief Information Officer (formerly Vice President and Chief Financial
Officer), and Paul M. Van Eyl, Vice President-Strategic Planning, for cause on
April 16, 1997. The current executive officers of the Company, their ages and
their present positions with the Company are as follows:

-3-
<PAGE> 4

Name Age Position and Offices Held

<S> <C> <C>
William N. Plamondon . . . . . . . . 49 Co-President and Co-Chief Executive
Officer, Director

Richard J. Uhl . . . . . . . . . . . 56 Co-President and Co-Chief Executive
Officer, Director

John R. Griggs . . . . . . . . . . . 47 Executive Vice President
and Chief Operating
Officer--Dealer Financial
Services Division

Norman Smagley . . . . . . . . . . . 38 Senior Vice President and Chief Financial Officer

Alan J. Appelman . . . . . . . . . . 39 Senior Vice President

V. Wayne Carlson . . . . . . . . . . 49 Senior Vice President

Craig Adams . . . . . . . . . . . . . 37 Vice President

S. Mark Floyd . . . . . . . . . . . . 44 Vice President

Brian W. Hausmann . . . . . . . . . . 41 Vice President

Allen D. Rice . . . . . . . . . . . . 41 Vice President

Richard P. Vogelman . . . . . . . . . 54 Vice President
</TABLE>

Mr. Plamondon was elected as Co-President and Co-Chief Executive
Officer of the Company on April 16, 1997 on an interim basis and has served as
a director of the Company since March 1995. From June 1992 to February 1997,
Mr. Plamondon was the President of Budget Rent A Car Corporation and held
various other managerial positions within Budget Rent A Car Corporation from
1978 to 1992. He serves on the board of directors for the International
Franchise Association, the American Car Rental Association and North Central
College in Lisle, Illinois.

Mr. Uhl was elected as Co-President and Co-Chief Executive Officer of
the Company on April 16, 1997 on an interim basis and has served as a director
of the Company since May 1991. Mr. Uhl is the President and a director of
Chicago Holdings, Inc. ("CHI"), having held these positions since December
1985. CHI is a privately owned company engaged in the management of owned
lease portfolios and investments in operating companies. Finance Acquisition
Corp. ("FAC"), a wholly-owned subsidiary of CHI, has an ownership interest in
the Company. Mr. Uhl served as a director of ALC Communications Corporation
from September 1991 until its merger with Frontier Corporation. Since August
1995, Mr. Uhl has been a director of Frontier Corporation. In November 1990,
Mr. Uhl became the Chief Executive Officer and a director of Hurrah Stores,
Inc. and Chairman and Chief Executive Officer of its wholly owned subsidiary,
Retail Holdings Group, Inc. ("RHG"), a retailer of discount woman's clothing.
RHG filed a petition under Chapter 11 of the United States Bankruptcy

-4-
<PAGE> 5

Code on January 14, 1993, and the bankruptcy court approved its plan of
liquidation on July 12, 1995. Mr. Uhl has also been President of Steiner
Financial Corporation since December 1987. Since November 1993, he has served
as the Chairman of the Board of Directors of DACC Liquidation Corp. (formerly
known as Dealers Alliance Credit Corp.). Since August 1995, Mr. Uhl has served
as Chairman of the Board of Directors of Business Alliance Capital Corp., an
asset based lender to small and medium sized businesses.

Mr. Griggs joined the Company as Executive Vice President and Chief
Operating Officer -- Dealer Financial Services Division in March 1997. He
served as Senior Vice President and Manager of National Operations of Bank One
Credit Company, a national indirect financing company, primarily of
automobiles, from April 1996 to April 1997. From 1986 to 1996, Mr. Griggs held
various positions at Household International, a diversified consumer lender,
including Division General Manager and Senior Vice President. From 1980 to
1986, he worked for Citicorp Acceptance Company, a national indirect financing
company, and last held the title Chief Financial Officer and Vice President of
Operations.

Mr. Smagley joined the Company in February 1997 as Senior Vice
President and Chief Financial Officer. He served as Vice President -- Finance
and Chief Financial Officer of Trans Leasing International, Inc., a lessor of
medical and office technology equipment, from 1994 to 1997. Mr. Smagley was
employed in several financial management positions with firms in the
pharmaceutical, financial services and energy fields from 1981 to 1993.

Mr. Appelman joined the Company in August 1995 as Vice President --
Operations Development and was named Vice President -- Risk Management in
August 1996 and Senior Vice President and Chief Credit Officer in March 1997.
From October 1990 to August 1995, Mr. Appelman held various operation analysis
positions, including Manager -- Operations and Portfolio Analysis, at Hyundai
Motor Finance Company. From 1981 to 1988, Mr. Appelman held various positions,
including Staff Vice President, at Citicorp.

Mr. Carlson joined the Company in April 1997 as Senior Vice President
- - Human Resources. From December 1992 to April 1997, Mr. Carlson was President
of The Carlson Leadership Trust, Inc., an organizational and manpower
development consulting firm. From February 1989 to January 1994, he held
various managerial positions with Amersham Corporation, a health science
company, and its affiliates, including Vice President of Human Resources and
General Manager/Chief Operating Officer of its diagnostic division.

Mr. Adams was named Vice President -- Account Services in March 1997.
He joined the Company in August 1996 as Manager -- Portfolio Analysis and was
named Manager -- Account Services in September 1996. Mr. Adams held several
positions in credit management with Sears, Roebuck and Company from 1986 to
1996.

Mr. Floyd joined the Company in June 1996 as Vice President --
Financial Institutions Group. From April 1990 to June 1996, Mr. Floyd was
President and Principal of National Asset Placement Corporation, a private
company engaged in purchasing and servicing loan portfolios. From April 1979

-5-
<PAGE> 6

to April 1990, he was employed in various management positions with several
banks in Texas.

Mr. Hausmann joined the Company in June 1991 as Vice President --
Operations and was named Vice President -- Automotive Credit Group in August
1996. From March 1989 to March 1991, Mr. Hausmann served as Vice President and
Chief Operating Officer of First Credit Corporation, a consumer finance company
specializing in the purchase of home improvement sales finance receivables.

Mr. Rice joined the Company in March 1995 as Vice President -- Sales
and Marketing and was named Vice President -- First Merchants Capital Ltd. in
March 1997. From January 1990 to March 1995, Mr. Rice was founder and
President of Aegis International, an international consulting firm specializing
in marketing and sales.

Mr. Vogelman has served as Vice President, General Counsel and
Secretary of the Company since July 1995. From June 1969 to March 1995, Mr.
Vogelman held various positions in the Investment Law Division of Allstate
Insurance Company, including Assistant Vice President and Assistant General
Counsel during the period from January 1987 to March 1995.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by Item 401 of Regulation S-K relating to the
directors of the Company is set forth below. The information required by Item
401 of Regulation S-K relating to the executive officers of the Company is
furnished in a separate item captioned "Executive Officers of the Registrant"
in Part I of this report.

BOARD OF DIRECTORS OF THE REGISTRANT

On April 16, 1997, the Board of Directors terminated the employment of
Mitchell C. Kahn, President and Chief Executive Officer, for cause and Mr. Kahn
resigned as a member of the Board of Directors of the Company. On April 16,
1997, the Board of Directors amended the bylaws of the Company to, among other
things, reduce the number of directors from seven to six. The current
directors of the Company, their ages and their present positions with the
Company are as follows:

Name Age Positions and Offices Held

William N. Plamondon . . . . . 49 Co-President and Co-Chief
Executive Officer, Director

Richard J. Uhl . . . . . . . . 56 Co-President and Co-Chief
Executive Officer, Director

Thomas A. Hiatt . . . . . . . . 49 Director

Marcy H. Shockey . . . . . . . 44 Director

-6-
<PAGE> 7

Name Age Positions and Offices Held

Solomon A. Weisgal . . . . . . 70 Director

Stowe W. Wyant . . . . . . . . 72 Director

Mr. Uhl was elected as Co-President and Co-Chief Executive Officer of
the Company on April 16, 1997 on an interim basis and has served as a director
of the Company since May 1991. Mr. Uhl is the President and a director of CHI,
having held these positions since December 1985. CHI is a privately owned
company engaged in the management of owned lease portfolios and investments in
operating companies. FAC, a wholly- owned subsidiary of CHI, has an ownership
interest in the Company. Mr. Uhl served as a director of ALC Communications
Corporation from September 1991 until its merger with Frontier Corporation.
Since August 1995, Mr. Uhl has been a director of Frontier Corporation. In
November 1990, Mr. Uhl became the Chief Executive Officer and a director of
Hurrah Stores, Inc. and Chairman and Chief Executive Officer of its wholly
owned subsidiary, RHG, a retailer of discount woman's clothing. RHG filed a
petition under Chapter 11 of the United States Bankruptcy Code on January 14,
1993, and the bankruptcy court approved its plan of liquidation on July 12,
1995. Mr. Uhl has also been President of Steiner Financial Corporation since
December 1987. Since November 1993, he has served as the Chairman of the Board
of Directors of DACC Liquidation Corp. (formerly known as Dealers Alliance
Credit Corp.). Since August 1995, Mr. Uhl has served as Chairman of the Board
of Directors of Business Alliance Capital Corp., an asset based lender to small
and medium sized businesses.

Mr. Hiatt has served as a director of the Company since May 1991.
Since 1988, Mr. Hiatt has been a general partner of Middlewest Management
Company L.P. ("MMC"). MMC is the general partner of Middlewest Ventures II,
L.P. ("MW"), a provider of venture capital that manages risk capital for a
number of institutional investors. Mr. Hiatt is also a general partner of
Middlewest Partners, the general partner of Middlewest Ventures, L.P., a
venture capital firm with similar investment objectives as MW, which he
co-founded in 1985. Mr. Hiatt has served as a director of PowerWay, Inc., a
software company, since May 1987 and as a director of Fifth Third Bank of
Central Indiana since August 1990. In addition, Mr. Hiatt has served as a
director of Express Shipping Centers, Inc., a provider of UPS shipping services
through supermarkets, since February 1992 and as a director of Bioanalytical
Systems, Inc., a provider of advanced instrumentation and research services,
since December 1994.

Ms. Shockey has served as a director of the Company since May 1991.
Ms. Shockey has been

-7-
<PAGE> 8

a general partner of MMC, which is the general partner of MW, since February
1988. Ms. Shockey has served as a director of Impath Laboratories, Inc. since
May 1994 and has served as a director of LNS Group, Inc. since August 1991. In
addition, Ms. Shockey has served as a director of West-tech Corporation since
September 1990. From February 1981 until February 1988, Ms. Shockey was an
investment manager specializing in early stage investments for the venture
capital division of Allstate Insurance Company.

Mr. Weisgal has served as a director of the Company since February
1993. Mr. Weisgal is a Certified Public Accountant and has been the President
of Solomon A. Weisgal, Ltd., a financial consulting firm, since its inception
in August 1979. Mr. Weisgal has served as a director of CHI since its
inception in December 1985. Mr. Weisgal has served as a director of Walnut
Capital Corp., a small business investment corporation specializing in early
stage venture capital investments, since its inception in March 1984 and has
served as a director of Walnut Financial Services, Inc., a publicly held
financial service company, since February 1995. From June 1985 until March
1994, Mr. Weisgal served as a director of Oxford Consolidated, Inc.

Mr. Wyant has served as a director of the Company since May 1994.
From May 1982 to July 1986, Mr. Wyant was the Director of Diversified
Operations of BA Financial, a division of Barclays American Corporation, a
diversified finance company. Mr. Wyant retired from BA Financial in July 1986.
From June 1973 to April 1982, Mr. Wyant served in various positions for
American Credit Corporation and its successor, Barclays American Corporation,
including Division Manager and Senior Vice President, and Area Director and
Corporate Vice President.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and beneficial owners (collectively,
the "Reporting Persons") of more than ten percent of the Company's common
stock, par value $.01 per share ("Common Stock"), to file reports of ownership
and changes in ownership with the Commission and the Nasdaq Stock Market. The
Company believes that during 1996 the Reporting Persons complied with all
applicable Section 16(a) filing requirements. This conclusion is based solely
upon a review of copies of such forms furnished to the Company in accordance
with regulations of the Commission and certain written representations received
by the Company.

ITEM 11: EXECUTIVE COMPENSATION

The following table sets forth certain summary information for the
years indicated concerning the compensation awarded to, earned by, or paid to
the Chief Executive Officer and the other four most highly compensated
executive officers of the Company (based on combined salary and bonus for 1996)
(collectively, the "Named Executives").

-8-
<PAGE> 9
SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION SECURITIES
-------------------- OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITIONS YEAR SALARY($) BONUS($)(a) COMPENSATION($)(b) OPTIONS(#)
- ---------------------------- ---- ------- ------- ----------------- ---------
<S> <C> <C> <C> <C> <C>
Alan J. Appelman . . . . . . . . . . . . . 1996 149,492 35,000 5,000
Senior Vice President and 1995 35,597(c) 18,000(c) --
Chief Credit Officer 1994 -- -- --

Brian W. Hausmann . . . . . . . . . . . . 1996 140,230 20,000 8,000
Vice President -- Automotive 1995 123,333 40,000 8,000
Credit Group 1994 109,833 50,000 --

Allen D. Rice . . . . . . . . . . . . . . 1996 157,183 35,000 7,000
Vice President -- First Merchants Capital 1995 92,244(c) 32,000 4,000
Ltd. 1994 -- -- --

Mitchell C. Kahn (d) . . . . . . . . . . . 1996 236,193 80,000 200,000(e)
President and Chief Executive Officer 1995 187,500 70,000 56,672(f) --
1994 159,583 75,225 23,648(g)

Thomas R. Ehmann (h) . . . . . . . . . . . 1996 139,484 16,500 8,000
Vice President and Chief 1995 123,333 40,000 8,000
Information Officer 1994 109,833 50,000 30,140
</TABLE>

(a) The annual bonus amounts shown for 1994 were earned and accrued during the
Company's previous fiscal year which ended on May 31, 1995 and were paid
prior to December 31, 1995. With the change in the Company's fiscal year
to a calendar year, for the year ended December 31, 1995, pro-rated
bonuses were earned and accrued for the seven month period from June 1,
1995 through December 31, 1995. Bonus amounts shown for 1996 were earned
and accrued during the calendar year ended December 31, 1996. These
bonuses were paid to eligible management employees, including the
executive officers listed above, in March 1996 and March 1997,
respectively.

(b) Does not include the cost to the Company of certain perquisites and other
personal benefits. The aggregate amount of such benefits, as to each
executive officer, other than Mr. Kahn, did not exceed the lesser of
$50,000 or 10% of his total annual salary and bonus.

(c) Mr. Appelman and Mr. Rice joined the Company in August 1995 and March
1995, respectively. Thus, their 1995 compensation does not cover a full
year.

(d) The Board of Directors of the Company terminated the employment of Mr. Kahn
for cause on April 16, 1997.

(e) As of June 1, 1996, in connection with the Company entering into an
employment agreement with Mr. Kahn, the Company also entered into the 1996
Kahn Option, as defined in "Stock Option Agreements". Pursuant to the
1996 Kahn

-9-
<PAGE> 10

Option, Mr. Kahn was granted an option to purchase 100,000 shares of Common
Stock on each of June 3, 1996 and December 31, 1996 at exercise prices of
$21.875 and $19.125, respectively. As of the date of Mr. Kahn's
termination of employment with the Company, 20,000 of such options had
vested and the remainder of such options expired. See "Stock Option
Agreements."

(f) Other annual compensation for Mr. Kahn for 1995 included non-cash
compensation that was used to extinguish indebtedness incurred by Mr. Kahn
to the Company pursuant to the Management Purchase Agreement dated May 23,
1991 between Mr. Kahn and the Company.

(g) In April 1994, the Company entered into a stock option agreement with Mr.
Kahn for up to 23,648 shares of Common Stock at an exercise price of
$11.00 per share. Based upon the level of pre-tax earnings and return on
equity achieved by the Company for the 12 months ended May 31, 1995 and
May 31, 1996, Mr. Kahn has the immediate right to exercise options with
respect to 20,541 shares of Common Stock.

(h) The Board of Directors of the Company terminated the employment of Mr.
Ehmann for cause on April 16, 1997. All of the options granted to Mr.
Ehmann in 1994 were granted under the Company's Incentive Stock Option
Plan (the "Incentive Stock Option Plan") at an exercise price of $4.40 per
share. As of April 16, 1997, 25,817 of such options had vested and the
remainder of such options expired. Vested options under the Incentive
Stock Option Plan may be exercised by Mr. Ehmann for a period of three
months following the date of Mr. Ehmann's termination of employment with
the Company. All of the options granted to Mr. Ehmann in 1995 and 1996
were granted under the Company's 1994 Equity Incentive Plan, as amended
and restated (the "Equity Incentive Plan"), and all of such options
expired upon Mr. Ehmann's termination of employment with the Company.

-10-
<PAGE> 11

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth details regarding stock options granted
to the Named Executives during 1996. The Company granted no SARs in during
1996.

INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES PERCENT OF ASSUMED ANNUAL RATES OF
UNDERLYING TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERM(C)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ---------------------------
Name (#)(A) FISCAL YEAR(B) ($/SH) DATE 5%($) 10%($)
---- ---------- -------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alan J. Appelman . . . . . 5,000 1.3% $19.50 3/06/06 $ 61,300 $ 155,400
Brian W. Hausmann . . . . . 8,000 2.0% $19.50 3/06/06 $ 98,080 $ 248,640
Allen D. Rice . . . . . . . 7,000 1.8% $19.50 3/06/06 $ 85,820 $ 217,560
Mitchell C. Kahn . . . . . 100,000 25.0% $21.875 6/03/06 $ 1,375,500 $3,486,500
100,000 25.0% $19.125 12/31/06 $ 1,202,500 $3,048,500
Thomas R. Ehmann . . . . . 8,000 2.0% $19.50 3/06/06 $ 98,080 $ 248,640
</TABLE>

- ----------------

(a) All options in this table have exercise prices equal to the fair market
value on the date of grant. The options, except those granted to Mr. Kahn
and Mr. Ehmann, become exercisable as to 25% of the shares subject to the
award on each of the first four anniversaries of the date of grant and
expire ten years from the original date of grant. These options were
granted under the Equity Incentive Plan. See "1994 Equity Incentive
Plan". The Board of Directors of the Company terminated the employment of
Mr. Kahn and Mr. Ehmann for cause on April 16, 1997. Mr. Kahn's options
were to become exercisable as to 20,000, 30,000 and 50,000 shares on the
first, second and third December 31 following the grant, respectively, and
were granted under the 1996 Kahn Option. As of the date of Mr. Kahn's
termination of employment with the Company, 20,000 of such options had
vested and the remainder of such options expired. See "Stock Option
Agreements". Mr. Ehmann's options were granted under the Equity Incentive
Plan, and all of such options expired upon Mr. Ehmann's termination of
employment with the Company.

(b) The Company granted options for 199,400 shares to employees in 1996 under
the Equity Incentive Plan and 200,000 shares to Mr. Kahn under the 1996
Kahn Option.

(c) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term at the annual rate specified
(5% and 10%). Annual compounding results in total appreciation of 63% (at
5% per year) and 159% (at 10% per year) for options with a ten year term.
The assumed annual rates of appreciation are specified in Commission rules
and do not represent the Company's estimate or projection of future stock
price growth. The Company does not necessarily agree that this method can
properly determine the value of an option.

-11-
<PAGE> 12
The following table sets forth certain information with respect to
stock options granted to each of the Named Executives that were outstanding at
December 31, 1996:

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNEXERCISED UNDERLYING VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)(a)
SHARES ACQUIRED ---------------------------- --------------------------
NAME ON EXERCISE(#) VALUE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------------- ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan J. Appelman . . . . . -- -- -- 5,000 -- --
Brian W. Hausmann . . . . . -- -- 31,213 14,000 $ 558,280 $ 2,250
Allen D. Rice . . . . . . . -- -- 1,000 10,000 375 1,125
Mitchell C. Kahn(b) . . . . -- -- 123,657 191,824 1,882,756 96,070
Thomas R. Ehmann(c) . . . . -- -- 26,971 19,169 368,448 78,364
</TABLE>

(a) Values are based on the difference between the December 31, 1996 closing
price of $19.125 per share on the Nasdaq National Market and the option
exercise price.

(b) The Board of Directors of the Company terminated the employment of Mr.
Kahn for cause on April 16, 1997. On such date, unexercisable options to
acquire 180,000 shares of Common Stock previously granted to Mr. Kahn
expired.

(c) The Board of Directors of the Company terminated the employment of Mr.
Ehmann for cause on April 16, 1997. On such date, exercisable options to
acquire 4,000 shares of Common Stock and unexercisable options to acquire
16,323 shares of Common Stock previously granted to Mr. Ehmann expired.

EMPLOYMENT AGREEMENT

The Company entered into an employment agreement (the "Employment
Agreement") with Mitchell C. Kahn effective as of June 1, 1996 to perform the
duties of the Company's President and Chief Executive Officer. The Employment
Agreement replaced the previous employment agreement between the Company and Mr.
Kahn which commenced June 1, 1991 and terminated on May 31, 1996 after the
expiration of the initial term and three one- year renewal periods. The
Employment Agreement had an original termination date of December 31, 1998 and
provided for two one-year renewal periods at the option of the Company. The
Board of Directors of the Company terminated Mr. Kahn's employment with the
Company on April 16, 1997 for Cause (as defined in the Employment Agreement). A
summary of the material terms of the Employment Agreement is set forth below.

Pursuant to the Employment Agreement, the Company agreed to pay Mr. Kahn an
annualized base salary of $250,000 per annum from June 1, 1996 through December
31, 1996 and $275,000 and $302,000 per annum for calendar years 1997 and 1998,
respectively. In addition, on or before April 1,

-12-
<PAGE> 13

1997, 1998 and 1999, Mr. Kahn was eligible to receive a bonus payment of up to
100% of his base compensation in effect on the previous December 31 upon the
Company's achievement of certain strategic plans and goals established each
year by the Board of Directors. Mr. Kahn was also reimbursed for all
reasonable and necessary business expenses and provided with the employee group
health, life and disability benefits that the Company provides to its other
employees. Additionally, Mr. Kahn was furnished with an automobile allowance
of $800 per month and was eligible for reimbursement for up to $55,000 for a
country club membership initial fee. Because Mr. Kahn's employment was
terminated by the Company for Cause, the Company was required to pay Mr. Kahn
only those amounts earned or accrued under the Employment Agreement through the
date of termination. In accordance with the Employment Agreement, the Company
entered into a stock agreement with Mr. Kahn for a total of 300,000 shares of
Common Stock. See "Stock Option Agreements."

The Employment Agreement included a restrictive covenant by which Mr. Kahn
agreed not to compete with the Company for a period of two years after the
termination of the Employment Agreement, except in certain circumstances,
including the failure of the Company to renew the Employment Agreement for at
least one renewal period. The Employment Agreement also prohibited Mr. Kahn
from recruiting, soliciting, offering employment to or hiring any of the
Company's employees for a period of two years after the termination of the
Employment Agreement and included a confidentiality provision with respect to
information about the Company and its business.

MANAGEMENT PURCHASE AGREEMENTS

The Company has entered into Management Purchase Agreements, dated as of
May 23, 1991 (the "Management Purchase Agreements"), with Mitchell C. Kahn,
Brian W. Hausmann and certain employees of the Company. Pursuant to such
agreements, Messrs. Kahn and Hausmann purchased 117,126 and 36,028 shares of
Common Stock, respectively. The agreements entered into by Messrs. Kahn and
Hausmann provide that if the employment of either Mr. Kahn or Mr. Hausmann is
terminated by the Company for cause, the Company will be able to purchase the
shares held by such party at the fair market value of the shares upon
termination. Additionally, in the event of the death of either Mr. Kahn or Mr.
Hausmann, the legal representative of such party will have the right to require
that the Company purchase the shares held by such party at the fair market value
of the shares on the date of death. This repurchase obligation of the Company
does not apply if the shares held by such party prior to death have been
registered under the Securities Act of 1933, as amended (the "Securities Act").

1994 EQUITY INCENTIVE PLAN

On March 27, 1996, the Board of Directors adopted, and on May 14, 1996 the
stockholders of the Company approved, an amendment and restatement of the Equity
Incentive Plan. The Equity Incentive Plan became effective on September 30,
1994. Under the Equity Incentive Plan, the Compensation Committee is authorized
to award stock options, stock appreciation rights ("SARs"), limited stock
appreciation rights, restricted stock, performance shares, performance units and
bonus stock. The Equity Incentive Plan has a 10-year term and, subject to anti-
dilution adjustments, a

-13-
<PAGE> 14

maximum of 750,000 shares of Common Stock may be delivered pursuant to awards
under the Equity Incentive Plan (of which no more than 100,000 shares may be
used for awards of restricted stock or bonus stock). All full-time employees
of the Company or any of its subsidiaries are eligible to receive awards.
Subject to anti-dilution adjustments, the number of shares for which options or
SARs may be granted to any one grantee in a calendar year cannot exceed 60,000.

The Compensation Committee has the discretion to determine the persons to
whom awards shall be made and, subject to the terms of the Equity Incentive
Plan, the terms and conditions of each award. The Compensation Committee may,
among other things, cancel outstanding awards and grant substitute awards with
an exercise price (or for SARs, base price) determined by reference to the value
of the Common Stock on the date of the substitute award, accelerate vesting and
waive terms and conditions of outstanding awards and permit eligible employees
to elect, prior to earning compensation, to acquire options in lieu of receiving
such compensation. All awards will be fully vested upon a change of control (as
defined in the Equity Incentive Plan) of the Company.

INCENTIVE STOCK OPTION PLAN

On June 17, 1993, the Board of Directors adopted and obtained stockholder
approval of the Incentive Stock Option Plan pursuant to which certain employees
of the Company were granted options to purchase shares of Common Stock. Options
with respect to 63,809 shares of Common Stock have been granted to key employees
and officers of the Company under the Incentive Stock Option Plan. As of
December 31, 1996, options with respect to 39,559, 4,065 and 9,871 shares of
Common Stock were vested, repurchased by the Company and canceled, respectively.
On July 27, 1994, the Board of Directors discontinued the Incentive Stock Option
Plan, effective as of September 23, 1994, and no future grants of options will
be made under such plan. Options previously granted under the Incentive Stock
Option Plan will remain exercisable in accordance with their terms.

Pursuant to the Incentive Stock Option Plan, upon the death, disability or
termination of employment of an optionee, the Company has the right for a period
of 30 days to repurchase the optionee's vested but unexercised options at the
fair market value of the underlying Common Stock as of the date of such event
less the option price for such shares. Upon the death or termination of
employment of an optionee, the optionee or his or her successor in interest may,
within three months after such event, exercise options to the extent the options
were exercisable at the time of such event, provided that the Company has
elected not to repurchase the options as describe above. Upon the permanent
disability or retirement of an optionee, the optionee may, within twelve months
after such event, exercise options to the extent the options were exercisable at
the time of such event, provided that the Company has elected not to repurchase
the options as set forth above.

STOCK OPTION AGREEMENTS

In May 1991, the Company entered into stock option agreements with Mitchell
C. Kahn, Brian W. Hausmann and certain employees of the Company for a total of
193,448 shares of Common Stock. Such agreements were amended and restated in
November 1993 (as amended and restated, the "Stock Option Agreements") to reduce
the number of options exercisable pursuant to such agreements.

-14-
<PAGE> 15

The Stock Option Agreements currently provide Mitchell C. Kahn, Brain W.
Hausmann and certain employees of the Company with the option to purchase a
total of 141,064 shares of Common Stock, all of which are vested, for a
purchase price of $.04 per share. With limited exceptions, the options must be
exercised within ten years of the date of vesting. Shares issued pursuant to
the Stock Option Agreements are subject to certain provisions of the Management
Purchase Agreements. See "Management Purchase Agreements".

On April 5, 1994, the Company entered into a second stock option agreement
(the "Second Stock Option Agreement") with Mitchell C. Kahn for up to a total of
23,648 shares of Common Stock, subject to adjustment in accordance with the
agreement. The Second Stock Option Agreement permits the exercise of options
with respect to the shares of Common Stock for which they are vested, for a
purchase price of $11.00 per share. Based upon the level of pre-tax earnings
and return on equity achieved by the Company for the applicable time periods,
Mr. Kahn has the immediate right to exercise options with respect to 20,541
shares of Common Stock. Such options must be exercised within five years after
the applicable vesting date.

As of June 1, 1996 in connection with the Company entering into the
Employment Agreement with Mitchell C. Kahn, the Company also entered into a
stock option agreement with Mr. Kahn (the "1996 Kahn Option"). The 1996 Kahn
Option provided for the grant of options for 300,000 shares of Common Stock on a
schedule consisting of 100,000 shares on each of June 3, 1996, December 31, 1996
and December 31, 1997, provided Mr. Kahn was employed by the Company on the
applicable grant date. The exercise price for the options was the fair market
value of the Common Stock on the respective grant dates. As of December 31,
1996, the first two grants for 100,000 shares each became effective at an
exercise price of $21.875 per share for the June 3, 1996 grant and $19.125 per
share for the December 31, 1996 grant. The Board of Directors of the Company
terminated the employment of Mr. Kahn for cause on April 16, 1997. As of April
16, 1997, options for 20,000 shares of Common Stock had vested under the 1996
Kahn Option and the remainder of such options expired. Vested options must be
exercised no later than the tenth anniversary of the grant date.

COMPENSATION OF DIRECTORS

The Company pays each of its directors who are not also employees of the
Company an annual retainer of $10,000 and an annual retainer of $2,000 ($3,000
for the chair) with respect to each committee on which such director serves.
Each non-employee director is paid a fee of $1,500 for each meeting of the Board
of Directors attended. The Company reimburses each director for out-of-pocket
expenses incurred in attending meetings of the Board of Directors and any of its
committees. On May 26, 1994, pursuant to an agreement with RFE Investment
Partners IV, L.P., the Company granted Mr. Wyant an option to purchase up to
5,982 shares of Common Stock at an exercise price of $5.18 per share,
exercisable at any time. In the event of the death of Mr. Wyant or in the event
that Mr. Wyant shall, for any reason, not be reelected or refuse to serve as a
director of the Company, the unexercised portion of the option granted to Mr.
Wyant will terminate unless it is exercised by Mr. Wyant or his administrator,
guardian, executor or heirs within 60 days of the date of Mr. Wyant's death or
termination of service as a director.

-15-
<PAGE> 16
1994 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

On July 27, 1994, the Board of Directors adopted, and the Company's
stockholders approved, the First Merchants Acceptance Corporation 1994
Non-Employee Directors Stock Option Plan (the "Directors Plan") under which
eligible directors of the Company are granted options to purchase Common Stock.
The Directors Plan became effective on September 30, 1994. Eligible directors
under the Directors Plan are directors who are not employees of the Company or
any of its subsidiaries at the time of the grant of an option. As of December
31, 1996, Ms. Shockey and Messrs. Hiatt, Plamondon, Uhl, Weisgal and Wyant were
eligible directors under the Directors Plan.

On the date of the 1997 annual meeting of stockholders and every third
annual meeting thereafter, each eligible director who is elected or reelected to
the Board of Directors will be granted an option to purchase 3,000 shares of
Common Stock, subject to antidilution adjustments. An eligible director who is
appointed by the Board of Directors shall be granted an option on the date of
such appointment to purchase a pro- rated number of shares based on the number
of months remaining until the next option grant under the Directors Plan. The
exercise price of each such option shall be 100% of the fair market value of the
Common Stock on the grant date.

Each option will have a term of 10 years from its grant date and will
become exercisable as to 1,000 shares each year on the first to occur of the
annual anniversary of the grant date of such option or the annual meeting of
stockholders. All options will be fully vested upon a change of control (as
defined in the Directors Plan) of the Company. Any option that has become
exercisable will remain exercisable for 90 days after a grantee ceases to be a
director (180 days in the event of death), but not beyond the 10-year term of
the option. The Directors Plan has a 10-year term, and a maximum of 60,000
shares of Common Stock are available for awards under the Directors Plan,
subject to anti- dilution adjustments.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to September 23, 1994, the Board of Directors had no Compensation
Committee. Decisions concerning compensation of executive officers prior to
September 23, 1994 were made by the Chief Executive Officer. The Chief
Executive Officer's compensation was established pursuant to employment
agreements with the Company, the terms of which were ratified by the Board of
Directors. On September 23, 1994, the Board of Directors established a
Compensation Committee which, as of December 31, 1996, was comprised of Messrs.
Plamondon, Uhl and Wyant and Ms. Shockey.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of April 25, 1997 by (i) all those known by the
Company to be beneficial owners of more than

-16-
<PAGE> 17

5% of its outstanding Common Stock, (ii) each director of the Company and each
nominee for director, (iii) each of the executive officers named in the Summary
Compensation Table (the "Named Executives") and (iv) all Named Executives,
directors and nominees for director as a group.

<TABLE>
<CAPTION>
Amount and Nature of Percent of
Name Beneficial Ownership Class(l)
---- -------------------- ----------
<S> <C> <C>
Thomas A. Hiatt(2) . . . . . . . . . . . . . . . . . . . . . 880,533 13.8%

Marcy H. Shockey(3) . . . . . . . . . . . . . . . . . . . . . 880,533 13.8

Middlewest Ventures II, L.P.(4) . . . . . . . . . . . . . . . 878,533 13.7

Wellington Management Company, LLP(5) . . . . . . . . . . . . 718,000 11.2

Solomon A. Weisgal(6) . . . . . . . . . . . . . . . . . . . . 549,071 8.6

Richard J. Uhl(7) . . . . . . . . . . . . . . . . . . . . . . 523,118 8.2

Finance Acquisition Corp.(8) . . . . . . . . . . . . . . . . 507,118 7.9

Mitchell C. Kahn(9) . . . . . . . . . . . . . . . . . . . . . 258,853 4.0

Brian W. Hausmann(10) . . . . . . . . . . . . . . . . . . . . 75,054 1.2

Thomas R. Ehmann(11) . . . . . . . . . . . . . . . . . . . . 31,603 *

Stowe W. Wyant(12) . . . . . . . . . . . . . . . . . . . . . 16,186 *

Allen D. Rice(13) . . . . . . . . . . . . . . . . . . . . . . 4,950 *

William N. Plamondon(14) . . . . . . . . . . . . . . . . . . 2,000 *

Alan J. Appelman(15) . . . . . . . . . . . . . . . . . . . . 1,750 *

All Named Executives and directors as a group (11 persons). . 1,838,000 27.8
</TABLE>

- ---------------
* Represents less than one percent of the outstanding Common Stock

(1) Based on 6,396,519 shares of Common Stock outstanding as of April 25,
1997. Beneficial ownership is determined in accordance with the rules of
the Commission and generally includes voting or investment power with
respect to securities. Shares of Common Stock subject to options or
warrants exercisable or convertible within 60 days are deemed outstanding
for computing the percentage of the person or group holding such options
or warrants, but are not outstanding for computing the percentage of any
other person. Except as indicated in the footnotes to this table and
subject to applicable community property laws, the persons named in the
table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned.

(2) Includes 878,533 shares of Common Stock owned by MW, of which MMC is a
general partner. Mr. Hiatt is a general partner of MMC and shares voting
and investment power with respect to such shares. Also includes 2,000
shares of Common Stock issuable upon the exercise of options to acquire
Common Stock. If the options are exercised, Mr. Hiatt has agreed to
transfer the shares of Common Stock received upon such exercise to MMC.
Mr. Hiatt's address is Middlewest Ventures II, L.P., 201 N. Illinois
Street, Indianapolis, IN 46204.

(3) Includes 878,533 shares of Common Stock owned by MW, of which MMC is a
general partner. Ms. Shockey is

-17-
<PAGE> 18

a general partner of MMC and shares voting and investment power with
respect to such shares. Also includes 2,000 shares of Common Stock
issuable upon the exercise of options to acquire Common Stock. If the
options are exercised, Ms. Shockey has agreed to transfer the shares of
Common Stock received upon such exercise to MMC. Ms. Shockey's address is
Middlewest Ventures II, L.P., 201 N. Illinois Street, Indianapolis, IN
46204.

(4) The address of MW is 201 N. Illinois Street, Indianapolis, IN 46204.

(5) The number of shares of Common Stock owned is based upon information
contained in a Schedule 13G dated February 28, 1997 filed by Wellington
Management Company, LLP ("WMC") under the Securities Exchange Act of 1934.
The shares of Common Stock are owned by various investment advisory clients
of WMC which is deemed a beneficial owner of such shares by virtue of its
shared voting power and/or shared dispositive power with respect thereto.
No investment advisory client of WMC, except First Financial Fund, Inc., is
known to beneficially own more than 5% of the outstanding Common Stock.
The address of WMC is 75 State Street, Boston, MA 02109.

(6) Includes 2,000 shares of Common Stock issuable upon the exercise of options
to acquire Common Stock. Also includes 507,118 shares of Common Stock
owned by FAC, a wholly owned subsidiary of CHI, of which Mr. Weisgal is a
director and with respect to which Mr. Weisgal shares voting and investment
power. Also includes 1,500 shares of Common Stock owned by the Solomon A.
Weisgal, Ltd. Profit Sharing Plan & Trust and 500 shares of Common Stock
owned by the Solomon A. Weisgal, Ltd. Money Purchase Pension Plan & Trust.
Mr. Weisgal is a co-trustee and beneficiary of such trusts and shares
voting and investment power with respect to such shares. Also includes
37,953 shares of Common Stock owned by Cedar Glen Investments, an Illinois
general partnership, all the partners of which are trusts. Mr. Weisgal is
the trustee or beneficiary of certain of such trusts and shares voting and
investment power with respect to such shares. Mr. Weisgal's address is
Solomon A. Weisgal, Ltd., 120 South Riverside Plaza, Chicago, IL 60606.

(7) Includes 2,000 shares of Common Stock issuable upon the exercise of options
to acquire Common Stock. Also includes 507,118 shares of Common Stock
owned by FAC, a wholly owned subsidiary of CHI, of which Mr. Uhl is the
President and a director and with respect to which Mr. Uhl shares voting
and investment power. Also includes 2,000 shares of Common Stock that Mr.
Uhl holds as custodian for his son under the Uniform Gifts to Minors Act.
Mr. Uhl's address is Chicago Holdings, Inc., 1000 RIDC Plaza, Pittsburgh,
PA 15238.

(8) The address of FAC is 911 Washington Street, Wilmington, DE 19801. FAC is
a wholly owned subsidiary of CHI. The address of CHI is 1000 RIDC Plaza,
Pittsburgh, PA 15238.

(9) Includes 135,481 shares of Common Stock issuable upon the exercise of
options to acquire Common Stock. Also includes 200 shares of Common Stock
held by Mr. Kahn's wife as custodian for their sons under the Uniform Gift
to Minors Act. The Board of Directors of the Company terminated the
employment of Mr. Kahn for cause on April 16, 1997, and Mr. Kahn resigned
as a director of the Company on such date.

(10) Includes 35,213 shares of Common Stock issuable upon the exercise of
options to acquire Common Stock.

(11) Includes 25,817 shares of Common Stock issuable upon the exercise of
options to acquire Common Stock. The Board of Directors of the Company
terminated the employment of Mr. Ehmann for cause on April 16, 1997.

(12) Includes 7,982 shares of Common Stock issuable upon the exercise of
options to acquire Common Stock.

(13) Includes 3,750 shares of Common Stock issuable upon the exercise of
options to acquire Common Stock.

(14) The shares of Common Stock are issuable upon the exercise of options to
acquire Common Stock.

(15) Includes 1,250 shares of Common Stock issuable upon exercise of options to
acquire Common Stock.

-18-
<PAGE> 19

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

STOCK OPTION AGREEMENTS

The Company has entered into stock option agreements with certain
employees, former employees and a director of the Company for an aggregate of
467,587 shares of Common Stock. Options to acquire 280,000 of such shares of
Common Stock expired upon Mr. Kahn's termination of employment with the Company.

STOCKHOLDERS' AGREEMENT

The Company was a party to a stockholders' agreement, dated October 29,
1993, with MW, FAC, Mitchell C. Kahn, Brian W. Hausmann, and certain employees
and early investors in the Company which provided each of the parties with the
opportunity to participate pro-rata in any sale of shares of Common Stock
proposed by a selling party for the same consideration per share and on the same
terms as in the proposed sale transaction. This stockholders' agreement was
terminated by all of the parties thereto as of June 15, 1996.

REGISTRATION RIGHTS AGREEMENT

The Company entered into an Amended and Restated Registration Rights
Agreement, dated as of October 29, 1993, as amended (the "Registration Rights
Agreement"), with Mitchell C. Kahn, Brian W. Hausmann, certain employees of the
Company, MW, FAC and certain other early investors in the Company. The
Registration Rights Agreement provides that each of the stockholders who or
which are parties to it has the right, whenever the Company proposes to register
any of its securities, to require that the Company include in such registration
some or all of its shares. The expenses of such registrations (other than
underwriting discounts and commissions) will be borne by the Company. The
Company has agreed to indemnify the stockholders for losses caused by (i) any
untrue or alleged untrue statement or omission of material fact in any
registration statement and (ii) with certain exceptions, any violation by the
Company of any federal, state or common law rule or regulation in connection
with a registration. The Company has also agreed to pay damages equal to the
net proceeds a stockholder would have received in the event the Company
materially fails to comply with its registration obligations under the
Registration Rights Agreement. Shares sold pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration statement under the
Securities Act will no longer be subject to the Registration Rights Agreement.

-19-
<PAGE> 20

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on this 29th day of
April, 1997.

FIRST MERCHANTS ACCEPTANCE CORPORATION

By: /s/ WILLIAM N. PLAMONDON
-----------------------------------
William N. Plamondon
Co-President and Co-Chief
Executive Officer

By: /s/ RICHARD J. UHL
-----------------------------------
Richard J. Uhl
Co-President and Co-Chief
Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby authorizes and constitutes
William N. Plamondon, Richard J. Uhl and Norman Smagley, and each of them
singly, his true and lawful attorneys-in-fact with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities to sign and file any and all amendments to this report
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them, 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, hereby
ratifying and confirming all that said attorneys-in-fact or any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.

-20-
<PAGE> 21

Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

SIGNATURE TITLE
--------- -----
<S> <C> <C>
/s/ WILLIAM N. PLAMONDON Co-President and Co-Chief April 29, 1997
- ------------------------------ Executive Officer, Director
William N. Plamondon (Principal Executive Officer)

/s/ RICHARD J. UHL Co-President and Co-Chief April 29, 1997
- ------------------------------ Executive Officer, Director
Richard J. Uhl (Principal Executive Officer)

/s/ NORMAN SMAGLEY Senior Vice President and April 29, 1997
- ------------------------------ Chief Financial Officer
Norman Smagley (Principal Accounting Officer
and Principal Financial Officer)

/s/ THOMAS A. HIATT Director April 29, 1997
- ------------------------------
Thomas A. Hiatt

/s/ MARCY H. SHOCKEY Director April 29, 1997
- ------------------------------
Marcy H. Shockey

/s/ SOLOMON A. WEISGAL Director April 29, 1997
- ------------------------------
Solomon A. Weisgal

/s/ STOWE W. WYANT Director April 29, 1997
- ------------------------------
Stowe W. Wyant
</TABLE>

-21-
<PAGE> 22

INDEX TO EXHIBITS

EXHIBIT NO. DESCRIPTION

3.1 Restated Certificate of Incorporation of the Company, filed
with the Commission as Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

3.2 Amended and Restated Bylaws of the Company . . . . . . .

4.1 Specimen certificate for the Company's Common Stock, filed
with the Commission as Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

4.2 Indenture dated January 1, 1995, between the Company and
LaSalle National Bank, as trustee, including the form of
note, filed with the Commission as Exhibit 4.2 to the
Company's Annual Report on Form 10-K for the fiscal year
ended May 31, 1995, is incorporated herein by reference.

4.3 Indenture dated as of November 17, 1995, among the Company,
First Merchants Auto Receivable Corporation and Harris
Trust and Savings Bank, as Trustee, including the form of
note, filed with the Commission as Exhibit 3 to the
Company's Form 8-K dated November 17, 1995, is incorporated
herein by reference.

4.4 Indenture between First Merchants Auto Trust 1996-A as
Issuer and Harris Trust and Savings as Indenture Trustee,
filed with the Commission as Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, is incorporated herein by reference.

4.5 Indenture dated as of September 1, 1996 between First
Merchants Acceptance Auto Trust 1996-B and Harris Trust and
Savings Bank, as Indenture Trustee filed with the
Commission as Exhibit 4 to the Company's 8-K dated
September 26, 1996, is incorporated herein by reference.

-22-
<PAGE> 23

EXHIBIT NO. DESCRIPTION

4.6* Indenture dated as of October 15, 1996, between the
Company as Issuer and LaSalle National Bank as Indenture
Trustee.

10.1 1994 Non-Employee Directors Stock Option Plan, filed with
the Commission as Exhibit 10.2 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.2 Incentive Stock Option Plan, filed with the Commission as
Exhibit 10.4 to the Company's Registration Statement on
Form S-1 (File No. 33-81070), is incorporated herein by
reference.

10.3 Third Amended and Restated Loan and Security Agreement, as
amended, among the Company, LaSalle National Bank, as
agent, and the lenders named therein, filed with the
Commission as Exhibit 10.5 to the Company's Annual Report
on Form 10-K for the fiscal year ended May 31, 1995, is
incorporated herein by reference.

10.4 Amended and Restated Registration Rights Agreement, dated
as of October 29, 1993, as amended, filed with the
Commission as Exhibit 10.11 to the Company's Registration
Statement on Form S-1 (File No. 33-81070), is incorporated
herein by reference.

10.5 Amended and Restated Stock Option Agreement dated as of
November 1, 1993 between the Company and Mitchell C. Kahn,
filed with the Commission as Exhibit 10.12 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.6 Second Stock Option Agreement dated as of April 15, 1994
between the Company and Mitchell C. Kahn, filed with the
Commission as Exhibit 10.13 to the Company's Registration
Statement on Form S-1 (File No. 33-81070), is incorporated
herein by reference.

-23-
<PAGE> 24
EXHIBIT NO. DESCRIPTION

10.7 Amended and Restated Stock Option Agreement dated as of
November 1, 1993 between the Company and Brian W. Hausmann,
filed with the Commission as Exhibit 10.14 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.8 Management Purchase Agreement dated as of May 23, 1991
between the Company and Brian W. Hausmann, as amended,
filed with the Commission as Exhibit 10.15 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.9 Management Purchase Agreement dated as of May 23, 1991
between the Company and Mitchell C. Kahn, as amended, filed
with the Commission as Exhibit 10.16 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.10 Office Building Lease dated as of July 2, 1992 between the
Company and The Travelers Insurance Company, as amended,
filed with the Commission as Exhibit 10.35 to the Company's
Registration Statement on Form S-1 (File No. 33-81070), is
incorporated herein by reference.

10.11 Agreement for Supreme Data Processing Services dated as of
May 5, 1993 between the Company and Norwest Financial
Information Services Group, Inc. and corresponding Master
Equipment Purchase Agreement and Software License dated as
of June 30, 1993, filed with the Commission as Exhibit
10.36 to the Company's Registration Statement on Form S-1
(File No. 33-81070), is incorporated herein by reference.

10.12 Stock Option Agreement dated as of May 26, 1994 between
the Company and Stowe W. Wyant, filed with the Commission
as Exhibit 10.38 to the Company's Registration Statement on
Form S-1 (File No. 33-81070), is incorporated herein by
reference.

-24-
<PAGE> 25

EXHIBIT NO. DESCRIPTION

10.13 Management Purchase Agreement dated as of May 23, 1991
between the Company and Marilyn E. Millard, filed with the
Commission as Exhibit 10.43 to the Company's Registration
Statement on Form S-1 (File No. 33-81070), is incorporated
herein by reference.

10.14 Management Purchase Agreement dated as of May 23, 1991
between the Company and John W. McCarthy, filed with the
Commission as Exhibit 10.44 to the Company's Registration
Statement on Form S-1 (File No. 33-81070), is incorporated
herein by reference.

10.15 Management Purchase Agreement dated as of February 28,
1992 between the Company and Robert G. Mark, filed with the
Commission as Exhibit 10.45 to the Company's Registration
Statement on Form S-1 (File No. 33-81070), is incorporated
herein by reference.

10.16 Interest Rate Cap Agreement Confirmation dated as of
December 15, 1994 relating to the ISDA Master Agreement
dated as of January 10, 1994 between the Company and
Firstar Bank Milwaukee, N.A., filed as Exhibit 10.37 to the
Company's Registration Statement on Form S-1 (File No.
33-88244), is incorporated herein by reference.

10.17 Third Amendment dated May 5, 1995 to the Office Building
Lease filed as Exhibit 10.10, filed with the Commission as
Exhibit 10.52 to the Company's Annual Report on Form 10-K
for the fiscal year ended May 31, 1995, is incorporated
herein by reference.

10.18 Waiver and Consent dated as of September 22, 1995
pertaining to the Third Amended and Restated Loan and
Security Agreement filed as Exhibit 10.3, filed with the
Commission as Exhibit 10.53 to the Company's Registration
Statement on Form S-1 (File No. 33-96310), is incorporated
herein by reference.

-25-
<PAGE> 26

EXHIBIT NO. DESCRIPTION

10.19 Purchase Agreement, dated November 10, 1995, among the
Company, First Merchants Auto Receivable Corporation and
Salomon Brothers, Inc., filed with the Commission as
Exhibit 2 to the Company's Form 8-K dated November 17,
1995, is incorporated herein by reference.

10.20 Sale and Servicing Agreement, dated November 17, 1995,
among the Company, First Merchants Auto Receivable
Corporation and Harris Trust and Savings Bank, as back up
servicer, filed with the Commission as Exhibit 4 to the
Company's Form 8-K dated November 17, 1995, is incorporated
herein by reference.

10.21 Amendment to Third Amended and Restated Loan and Security
Agreement, dated as of November 10, 1995, by and among the
Company, LaSalle National Bank, as agent and one of the
lenders, and other lenders named therein, filed with the
Commission as Exhibit 5 to the Company's Form 8-K dated
November 17, 1995, is incorporated herein by reference.

10.22 Form of Waiver pertaining to the Amended and Restated
Registration Rights Agreement filed as Exhibit 10.54 to the
Company's Registration Statement on Form S-1 (File No.
33-96310), is incorporated herein by reference.

10.23 Amendment to Third Amended and Restated Loan and Security
Agreement, dated as of December 18, 1995, by and among the
Company, LaSalle National Bank, as agent and one of the
lenders, and other lenders named therein filed with the
Commission as Exhibit 10.33 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995,
is incorporated herein by reference.

10.24 Purchase Agreement, dated March 4, 1996, among the
Company, First Merchants Auto Receivable Corporation II and
Salomon Brothers Inc., filed with the Commission as Exhibit
2 to the Company's Form 8-K dated March 12, 1996, is
incorporated herein by reference.

-26-
<PAGE> 27

EXHIBIT NO. DESCRIPTION

10.25 Receivables Purchase Agreement, dated March 1, 1996, among
the Company and First Merchants Auto Receivable Corporation
II, filed with the Commission as Exhibit 3 to the Company's
Form 8-K dated March 12, 1996, is incorporated herein by
reference.

10.26 Pooling and Service Agreement, dated March 1, 1996, among
the Company, as Servicer, First Merchants Acceptance
Corporation II, as depositor and Harris Trust and Savings
Bank, as Trustee and backup Servicer filed with the
Commission as Exhibit 4 to the Company's Form 8-K dated
March 12, 1996, is incorporated herein by reference.

10.27 Fourth Amended and Restated Loan and Security Agreement,
dated as of February 28, 1996, by and among the Company,
LaSalle National Bank, NBD Bank, Firstar Bank of Milwaukee,
N.A., Harris Trust and Savings Bank, The Boatmen's National
Bank of St. Louis, First Bank, N.A., CoreStates Bank, N.A.,
Natwest Bank, filed with the Commission as Exhibit 10.4 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, is incorporated herein by reference.

10.28 Amended and Restated First Merchants Acceptance
Corporation 1994 Employee Stock Purchase Plan, dated May
15, 1996, filed with the Commission as Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, is incorporated herein by reference.

10.29 Amended and Restated First Merchants Acceptance
Corporation 1994 Equity Incentive Plan, dated May 15, 1996,
filed with the Commission as Exhibit 10.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, is incorporated herein by reference.

10.30 Purchase Agreement, dated May 10, 1996, among the Company,
First Merchants Auto Receivable Corporation II and Salomon
Brothers Inc., filed with the Commission as Exhibit 10.3 to
the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, is incorporated herein by reference.

-27-
<PAGE> 28
EXHIBIT NO. DESCRIPTION

10.31 Receivables Purchase Agreement, dated May 1, 1996, among
the Company and First Merchants Auto Receivable Corporation
II, filed with the Commission as Exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1996, is incorporated herein by reference.

10.32 Sales and Servicing Agreement, dated May 1, 1996, among
First Merchants Auto Trust 1996-A as Issuer, First
Merchants Auto Receivables Corporation II, as seller, The
Company, as Servicer, and Harris Trust and Savings Bank, as
Trustee and backup Servicer, filed with the Commission as
Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996, is incorporated herein
by reference.

10.33 Administrative Agreement, dated May 1, 1996, among First
Merchants Auto Trust 1996-A, the Company and First and
Harris Trust and Savings Bank, filed with the Commission as
Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996, is incorporated herein
by reference.

10.34 Amended and Restated Trust Agreement, dated May 1, 1996,
among First Merchants Auto Receivables Corporation II as
Depositor and Chemical Bank Delaware as Owner Trustee,
filed with the Commission as Exhibit 10.7 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1996, is incorporated herein by reference.

10.35 Remote Outsourcing Agreement dated as of June 1, 1996
between the Company and Alltel Financial Information
Services, Inc., filed with the Commission as Exhibit 10.12
to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996, as amended, is incorporated
herein by reference.

10.36 Employment Agreement dated as of June 1, 1996 between the
Company and Mitchell C. Kahn, filed with the Commission as
Exhibit 10.13 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, as amended, is
incorporated herein by reference.

-28-
<PAGE> 29

EXHIBIT NO. DESCRIPTION

10.37 Amendment No. 1 dated May 1, 1996 to the Fourth Amended
and Restated Loan and Security Agreement by and among the
Company, LaSalle National Bank as agent, and the other
lenders named therein, filed with the Commission as Exhibit
10.14 to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996, as amended, is
incorporated herein by reference.

10.38 Purchase Agreement, dated June 28, 1996, among the
Company, First Merchants Auto Receivable Corporation II,
and Salomon Brothers Inc., filed with the Commission as
Exhibit 2 to the Company's Form 8-K dated June 26, 1996, is
incorporated herein by reference.

10.39 Receivables Purchase Agreement, dated as of June 1, 1996
between the Company and First Merchants Auto Receivable
Corporation II, filed with the Commission as Exhibit 3 to
the Company's Form 8-K dated June 26, 1996, is incorporated
herein by reference.

10.40 Pooling and Servicing Agreement, dated June 19, 1996,
among the Company, as Servicer, First Merchants Acceptance
Corporation II, as depositor and Harris Trust and Savings
Bank, as Trustee and backup Servicer filed with the
Commission as Exhibit 4 to the Company's Form 8-K dated
June 26, 1996, is incorporated herein by reference.

10.41 Third Amendment to Amended and Restated Registration
Rights Agreement dated June 15, 1996, among the Company and
other parties named therein, filed with the Commission as
Exhibit 10.12 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, is incorporated
herein by reference.

10.42 Stockholders Termination Agreement among the Company and
the other parties named therein, filed with the Commission
as Exhibit 10.13 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996, is incorporated
herein by reference.

-29-
<PAGE> 30

EXHIBIT NO. DESCRIPTION

10.43 Amended and Restated Trust Agreement, dated as of
September 1, 1996, between First Merchants Auto Receivable
Corporation II, as Depositor and Chase Manhattan Bank
Delaware as Owner Trustee, filed with the Commission as
Exhibit 1 to the Company's 8-K dated September 26, 1996, is
incorporated herein by reference.

10.44 Sales and Servicing Agreement dated as of September 1,
1996, among First Merchants Auto Trust 1996-B, as Issuer,
First Merchants Auto Receivable Corporation II, as Seller,
the Company, as Servicer, and Harris Trust and Savings
Bank, as Indenture Trustee, Collateral Agent Backup
Servicer, filed with the Commission as Exhibit 2 to the
Company's 8-K dated September 26, 1996, is incorporated
herein by reference.

10.45 Receivables Purchase Agreement, dated as of September 1,
1996, between the Company and First Merchants Auto
Receivable Corporation II filed with the Commission as
Exhibit 3 to the Company's 8-K dated September 26, 1996, is
incorporated herein by reference.

10.46* Consent and Amendment to Fourth Amended and Restated Loan
and Security Agreement dated as of October 29, 1996, by and
among the Company as Borrower; NBD Bank; Firstar Bank
Milwaukee, N.A., Harris Trust and Savings Bank; The
Boatmen's National Bank of St. Louis; First Bank, National
Association; CoreStates Bank, N.A., Fleet Bank, National
Association, f/k/a Natwest Bank N.A. and Mellon Bank, N.A.
as Lenders; and LaSalle National Bank as Lender and Agent
for the Lenders.

10.47* Second Amendment to Fourth Amended and Restated Loan and
Security Agreement dated as of December 26, 1996, by and
among the Company as Borrower; NBD Bank; Firstar Bank
Milwaukee, N.A.; Harris Trust and Savings Bank; The
Boatmen's National Bank of St. Louis; First Bank, National
Association; CoreStates Bank, N.A., Fleet Bank, National
Association; and Mellon Bank, N.A. as Lenders; and LaSalle
National Bank as Lender and Agent for the Lenders.

-30-
<PAGE> 31

EXHIBIT NO. DESCRIPTION

10.48* Underwriting Agreement dated October 29, 1996 among the
Company as Seller, J.C. Bradford & Co., Piper Jaffray Inc.,
Keefe, Bruyette & Woods, Inc., and Stifel, Nicolas &
Company, Incorporated as Underwriters.

11.1** Statement regarding computation of earnings per share.

13.1** First Merchants Acceptance Corporation Annual Report to
Stockholders for December 31, 1996 (such report, except to
the extent incorporated herein, is furnished to the
Commission for informational purposes only and is not to be
part of this annual report on Form 10-K).

21.1* Subsidiaries of the Registrant.

23.1* Consent of Deloitte & Touche LLP.

27.1** Financial Data Schedule.

* Filed as an exhibit to the Company's original Annual Report on Form 10-K
for the year ended December 31, 1996.

** As previously disclosed in a Current Report on Form 8-K dated April 16,
1997, the Company discovered unauthorized entries made in the Company's
financial records and expects that it will restate previously reported
results for 1996. The Company expects to file with the Commission an
additional amendment to this Form 10-K to reflect the results of the
restatement. The Company anticipates that it will refile this exhibit, if
appropriate, with the additional amendment.

-31-

<PAGE> 1
EXHIBIT 3.2

FIRST MERCHANTS ACCEPTANCE CORPORATION
AMENDED AND RESTATED BYLAWS

ARTICLE I

GENERAL

SECTION 1. NAME.
The name of the corporation shall be
FIRST MERCHANTS ACCEPTANCE CORPORATION.

SECTION 2. OFFICE.
(a) The registered office of the corporation shall be at 32
Loockerman Square, Suite L-100, Kent County, Dover, Delaware, c/o The Prentice
Hall Corporation System, Inc.
(b) The corporation may, in addition to its registered office,
establish and maintain such an office or offices, at such place or places, as
the Board of Directors may deem necessary, desirable or expedient from time to
time.

ARTICLE II

STOCKHOLDERS

SECTION 1. PLACE OF MEETINGS.
Each meeting of the stockholders shall be held at the principal office
of the corporation or at such other place, within or without the State of
Delaware, as shall be designated by the Board of Directors in the notice of
meeting.
<PAGE> 2

SECTION 2. ANNUAL MEETING.
The annual meeting of the stockholders shall be held pursuant to
notice and at such date and time as shall be designated by the Board of
Directors in the notice of meeting for the purpose of electing directors and
for the transaction of such other business as may come before the meeting.

SECTION 3. SPECIAL MEETINGS.
Special meetings of stockholders for any purpose or purposes may be
called only by the Board of Directors, pursuant to a resolution adopted by a
majority of the members of the Board of Directors then in office. Special
meetings may be held at any place, within or without the State of Delaware, as
determined by the Board of Directors. The only business that may be conducted
at such a meeting, other than procedural matters and matters relating to the
conduct of the meeting, shall be the matter or matters described in the notice
of the meeting.

SECTION 4. NOTICE OF MEETINGS.
The Secretary or an Assistant Secretary of the corporation shall give
written notice of every meeting of the stockholders to each stockholder of
record entitled to vote at the meeting. Such notice shall be given not less
than ten days, nor more than 60 days, prior to the day named for the meeting,
unless a different period of notice is required by law. Such notice shall be
given either by regular mail, overnight courier, telegram or facsimile

-2-
<PAGE> 3

transmission, or by any other means comparable to any of the foregoing, to each
stockholder at his address appearing on the books of the corporation or
supplied by him to the corporation for the purpose of notice. Such notice
shall specify the place, day and hour of the meeting and, in the case of a
special meeting, the general nature of the business to be transacted.

SECTION 5. WAIVER OF NOTICE.
A waiver of notice in writing signed by the person or persons entitled
to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice. Neither the business to be
transacted nor the purpose of the meeting need be specified in the waiver of
notice of such meeting. Attendance of the person either in person or by proxy
at any meeting shall constitute a waiver of notice of such meeting, except
where such person attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting was not lawfully called or
convened.

SECTION 6. RECORD DATE.
In order that the corporation may determine the stockholders entitled
(i) to notice of or to vote at any meeting of stockholders or any adjournments
thereof, (ii) to receive payment of any dividend or other distribution, or
allotment of any rights, or (iii) to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other

-3-
<PAGE> 4

lawful action, the Board of Directors, in advance, may fix a date as the record
date for any such determination, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than sixty days nor less
than ten days before the date of such meeting, nor more than sixty days prior
to the date of any other action. A determination of the stockholders of record
entitled to notice of or to vote at a meeting of the stockholders shall apply
to any adjournment of the meeting taken pursuant to Article I, Section 8
hereof; provided, however, that the Board of Directors, in its discretion, may
fix a new record date for an adjourned meeting. Only stockholders determined
to be stockholders of record on the record date so fixed shall be entitled to
notice of, or to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend or other distribution, or allotment of rights,
or to exercise such rights in respect of such change, conversion or exchange of
stock, or to participate in any such other lawful action, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.

SECTION 7. LIST OF STOCKHOLDERS.
At least ten days before any meetings of the stockholders, the officer
or transfer agent in charge of the stock transfer books of the corporation
shall prepare and make a complete

-4-
<PAGE> 5

alphabetical list of the stockholders entitled to vote at such meeting, which
list shall show the address of each stockholder and the number of shares
registered in the name of each stockholder. The list so prepared shall be
maintained at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held, and shall be open for inspection
by any stockholder, for any purpose germane to the meeting, during ordinary
business hours during a period of not less than ten days prior to the meeting.
The list shall also be produced and kept open at the meeting (during the entire
duration thereof) and, except as otherwise provided by law, may be inspected by
any stockholder or proxy of a stockholder who is present at such meeting.

SECTION 8. QUORUM.
The presence in person or by proxy of the holders of a majority of the
votes represented by issued and outstanding shares entitled to vote at a
stockholders' meeting shall constitute a quorum, except that the presence in
person or by proxy of the holders of a majority of the issued and outstanding
shares of each class or series of stock which is entitled to vote as a class or
series at a stockholders' meeting shall constitute a quorum for any vote in
which a vote of such class or series is required. If a quorum is not present
at a meeting, those present may adjourn the meeting from time to time without
notice other

-5-
<PAGE> 6

than announcement at the meeting, until a quorum shall be obtained. At any
such adjourned meeting at which there is a quorum, any business may be
transacted that might have been transacted at the meeting originally called.

SECTION 9. STOCKHOLDER PROPOSALS.
(a) Condition of Submission to Stockholders. No proposal for a
stockholder vote shall be submitted by a stockholder (a "Stockholder Proposal")
to the corporation's stockholders unless the stockholder submitting such
proposal (the "Proponent") shall have filed a written notice (a "Proposal
Notice") setting forth with particularity (i) the names and business addresses
of the Proponent and all persons or entities (collectively, the "Persons" and
singularly, a "Person") acting in concert with the Proponent; (ii) the name and
address of the Proponent and the Persons identified in clause (i), as they
appear on the corporation's books (if they so appear); (iii) the class and
number of shares of the corporation beneficially owned by the Proponent and the
Persons identified in clause (i); (iv) a description of the Stockholder
Proposal containing all material information relating thereto; and (v) such
other information as the Board of Directors reasonably determines is necessary
or appropriate to enable the Board of Directors and stockholders of the
corporation to consider the Stockholder Proposal. The presiding officer at any
stockholders' meeting may determine that any Stockholder Proposal was not made
in accordance with the

-6-
<PAGE> 7

procedures prescribed in these Amended and Restated Bylaws (the "Bylaws") or is
otherwise not in accordance with law, and if it is so determined, such officer
shall so declare at the meeting and the Stockholder Proposal shall be
disregarded.
(b) Stockholder Proposal Notice. Proposal Notices shall be
delivered to the Secretary at the principal executive office of the corporation
not later than 120 days in advance of the anniversary date of the corporation's
proxy statement for the previous year's annual meeting or, in the case of
special meetings, at the close of business on the seventh day following the
date on which notice of such meeting is first given to stockholders.

SECTION 10. VOTING POWER.
Unless otherwise provided in a resolution or resolutions providing for
any class or series of Preferred Stock pursuant to Article IV of the Amended
and Restated Certificate of Incorporation (the "Certificate of Incorporation")
or by the Delaware General Corporation Law (the "DGCL"), every stockholder of
record shall be entitled to vote, in person or by proxy, the shares of voting
stock of every share of each class or series held of record by such
stockholder. All questions shall be decided by the vote of the majority of the
capital stock present in person or represented by proxy and entitled to vote at
any meeting, or if the voting is by class or series, a majority of the votes of
each class or series of capital stock present in

-7-
<PAGE> 8

person or represented by proxy and entitled to vote at any meeting, unless
otherwise specially provided by law or by the Certificate of Incorporation or
these Bylaws. Abstentions shall not be considered to be votes cast.

SECTION 11. PROXIES.
Every stockholder may vote either in person or by proxy. Every proxy
shall be executed in writing by the stockholder or by his duly authorized
attorney-in-fact. A proxy, unless coupled with an interest, shall be revocable
at will, notwithstanding any other agreement or any provision in the proxy to
the contrary, but the revocation of a proxy shall not be effective until notice
thereof has been given to the Secretary of the corporation. No proxy shall be
valid after eleven months from the date of its execution unless a longer time
is expressly provided therein, but in no event shall a proxy, unless coupled
with an interest, be voted on after three years from the date of its execution.
A proxy shall not be revoked by the death or incapacity of the maker unless
before the vote is counted or the authority is exercised, written notice of
such death or incapacity is given to the Secretary of the corporation.

SECTION 12. INSPECTORS.
Elections for directors need not be by ballot, except upon demand made
by a stockholder at the election and before the voting begins. In advance of
any meeting of stockholders, the

-8-
<PAGE> 9

Board of Directors shall appoint inspectors, who need not be stockholders, to
act at such meeting and make a written report thereof. Such inspectors may
include individuals who serve the corporation in other capacities, including,
without limitation, as officers, employees, agents or representatives of the
corporation. The number of inspectors shall be one or three. One or more
persons may be designated by the Board of Directors as alternate inspectors to
replace any inspector who fails to act. In case any person appointed as
inspector fails to appear or fails or refuses to act, the vacancy may be filled
by appointment made by the Board of Directors in advance of the convening of
the meeting, or at the meeting by the person or officer acting as chairman.
Each inspector, before discharging his or her duties, shall take and sign an
oath faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspectors shall have the
duties prescribed by the DGCL.

SECTION 13. PRESIDING OFFICERS AND ORDER OF BUSINESS.
All meetings of stockholders shall be called to order and presided
over by the President, or in his absence, by the highest ranking Vice
President, or in the absence of all of them, by the Treasurer, or if none of
these be present by a chairman designated by the Board of Directors. The
Secretary of the corporation shall act as secretary, but in the absence of the
Secretary, the presiding officer may appoint a secretary.

-9-
<PAGE> 10

SECTION 14. PROCEDURAL MATTERS.
At each meeting of stockholders, the chairman of the meeting shall fix
and announce the date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at the meeting and shall
determine the order of business and all other matters of procedure. Except to
the extent inconsistent with any such rules and regulations as adopted by the
Board of Directors, the chairman of the meeting may establish rules, which need
not be in writing, to maintain order for the conduct of the meeting, including,
without limitation, restricting attendance to bona fide stockholders of record
and their proxies and other persons in attendance at the invitation of the
chairman and making rules governing speeches and debates. The chairman of the
meeting acts in his or her absolute discretion and his or her rulings are not
subject to appeal.

ARTICLE III

DIRECTORS

SECTION 1. POWERS; QUALIFICATIONS; NUMBER AND TERM.
The business and affairs of the corporation shall be managed by or
under the direction of the Board of Directors of the corporation. A director
need not be a stockholder, a citizen of the United States, or a resident of the
State of Delaware. The Board of Directors shall consist of six persons;
provided, however, that such number of directors may from time to time be

-10-
<PAGE> 11

increased and decreased by amendment of this Article III, Section 1 but shall
in no event be reduced to less than three. Each director shall be elected for
a term ending on the next succeeding annual meeting of stockholders and shall
hold office for the term for which such director is elected or until a
successor shall have been duly elected and qualified.

SECTION 2. VACANCIES.
Any vacancies in the Board of Directors for any reason and any newly
created directorships resulting by reason of any increase in the number of
directors may be filled only by the Board of Directors, acting by a majority of
the remaining directors then in office, although less than a quorum, or by a
sole remaining director, and any directors so appointed shall hold office until
the next election of the class for which such directors have been chosen and
until their successors are elected and qualified.

SECTION 3. REMOVAL OF DIRECTORS.
Except as may be provided in a resolution or resolutions providing for
any class or series of Preferred Stock pursuant to Article IV of the
Certificate of Incorporation with respect to any directors elected by the
holders of such class or series, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 66 2/3% of the voting

-11-
<PAGE> 12

power of all of the shares of capital stock of the corporation then entitled to
vote generally in the election of directors, voting together as a single class.

SECTION 4. NOMINATION OF DIRECTORS.
(a) Eligibility. Only persons who are selected and recommended by
the Board of Directors or the committee of the Board of Directors designated to
make nominations, or who are nominated by stockholders in accordance with the
procedures set forth in this Article III, Section 4, shall be eligible for
election, or qualified to serve, as directors. Nominations of individuals for
election to the Board of Directors of the corporation at any annual meeting or
any special meeting of stockholders at which directors are to be elected may be
made by any stockholder of the corporation entitled to vote for the election of
directors at that meeting by compliance with the procedures set forth in this
Article III, Section 4. Nominations by stockholders shall be made by written
notice (a "Nomination Notice"), which shall set forth the following
information: (i) as to each individual nominated, (a) the name, date of birth,
business address and residence address of such individual, (b) the business
experience during the past five years of such nominee, including his or her
principal occupations and employment during such period, the name and principal
business of any corporation or other organization in which such occupations and
employment were carried on, and such other information as to

-12-
<PAGE> 13

the nature of his or her responsibilities and level of professional competence
as may be sufficient to permit assessment of his or her prior business
experience, (c) whether the nominee is or has ever been at any time a director,
officer or owner of 5% or more of any class of capital stock, partnership
interests or other equity interest of any corporation, partnership or other
entity, (d) any directorships held by such nominee in any company with a class
of securities registered pursuant to Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or subject to the requirements of
Section 15(d) of the Exchange Act or any company registered as an investment
company under the Investment Company Act of 1940, as amended; and (e) whether,
in the last five years, such nominee has been convicted in a criminal
proceeding or has been subject to a judgment, order, finding or decree of any
federal, state or other governmental entity, concerning any violation of
federal, state or other law, or any proceeding in bankruptcy, which conviction,
order, finding, decree or proceeding may be material to an evaluation of the
ability or integrity of the nominee; and (ii) as to the Person submitting the
Nomination Notice and any Person acting in concert with such Person, (a) the
name and business address of such Person, (b) the name and address of such
Person as they appear on the corporation's books (if they so appear) and (c)
the class and number of shares of the corporation that are beneficially owned
by such Person. A written consent to being named in a proxy statement as a
nominee, and to serve as a

-13-
<PAGE> 14

director if elected, signed by the nominee, shall be filed with any Nomination
Notice. If the presiding officer at any stockholders' meeting determines that
a nomination was not made in accordance with the procedures prescribed by these
Bylaws, he shall so declare to the meeting and the defective nomination shall
be disregarded.
(b) Stockholder Nomination Notice. Nomination Notices shall be
delivered to the Secretary at the principal executive office of the corporation
not later than 120 days in advance of the anniversary date of the corporation's
proxy statement for the previous year's annual meeting or, in the case of
special meetings, at the close of business on the seventh day following the
date on which notice of such meeting is first given to stockholders.

SECTION 5. PLACE OF MEETINGS.
The Board of Directors may hold annual, regular and special meetings,
and have an office or offices, either within or outside the State of Delaware,
at such place as the Board of Directors from time to time deems advisable.

SECTION 6. REGULAR MEETINGS.
The Board of Directors shall, without notice, hold an annual meeting
immediately after the annual meeting of the stockholders, or after the last
adjournment thereof, and shall hold other regular meetings at such time and
place as it may determine. No

-14-
<PAGE> 15

notice to the newly elected directors of such meeting shall be necessary for
such meeting to be lawful, provided a quorum is present.

SECTION 7. SPECIAL MEETINGS.
The Board of Directors shall hold such special meetings as shall be
called by the President, or Vice President, or Secretary, or any two directors.
Each such meeting shall be held at such time and place as shall be designated
in the notice of meeting.

SECTION 8. NOTICE OF MEETINGS.
Notice of the date, time and place of each meeting, except the annual
meeting, of the Board of Directors shall be mailed by regular mail to each
director, at his address appearing on the books of the corporation or supplied
by the director to the corporation for the purpose of notice ("designated
address"), at least six days before the meeting; or sent by overnight courier
to each director at his designated address at least two days before the meeting
(with delivery scheduled to occur no later than the day before the meeting); or
given orally by telephone or other means, or by telegraph or facsimile
transmission, or by any other means comparable to any of the foregoing, to each
director at his designated address at least 24 hours before the meeting;
provided, however, that if less than five days' notice is provided and
one-third of the directors then in office object in

-15-
<PAGE> 16

writing prior to or at the commencement of the meeting, such meeting shall be
postponed until five days after such notice was given pursuant to this sentence
(or such shorter period to which a majority of those who objected in writing
agree), provided that notice of such postponed meeting shall be given in
accordance with this Article III, Section 8. The notice of the meeting shall
state the general purpose of the meeting, but other routine business may be
conducted at the meeting without such matter being stated in the notice.

SECTION 9. WAIVER OF NOTICE.
A waiver of written notice in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Attendance of a person at
any meeting shall constitute a waiver of notice of such meeting, except where
such person attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting was not lawfully called or
convened, and any such person so states his purpose in attending such meeting
and refrains from participation in the business of the meeting.

SECTION 10. QUORUM.
A majority of the directors in office shall be necessary to constitute
a quorum for the transaction of business. The

-16-
<PAGE> 17

affirmative vote of a majority of the directors in office shall be required to
constitute the act of the Board of Directors.

SECTION 11. PRESIDING OFFICER AND ORDER OF BUSINESS.
All meetings of the Board of Directors shall be called to order and
presided over by the President, or in his absence or if the President is not a
member of the Board of Directors, by a member of the Board of Directors
selected by the members present. The Secretary of the corporation shall act as
secretary, but in the absence of the Secretary, the presiding officer may
appoint a secretary.

SECTION 12. ACTION BY BOARD WITHOUT FORMAL MEETING.
Unless otherwise restricted by the Certificate of Incorporation or
these Bylaws, any action required or permitted to be taken at any meeting of
the Board of Directors, or of any committee thereof, may be taken without a
meeting if all members of the Board of Directors or of such committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or committee, as the
case may be.

SECTION 13. COMPENSATION.
Directors, as such, shall receive such compensation and reimbursement
for expenses as the Board of Directors may by resolution allow. Directors
shall also be entitled to receive

-17-
<PAGE> 18

such compensation for services rendered to the corporation in any capacity
other than as directors, as may be provided from time to time by resolution of
the Board of Directors.

SECTION 14. RESIGNATION.
Any director, member of a committee, or other officer may resign at
any time by giving written notice to the Board of Directors, the President or
Secretary of the corporation. Such resignation shall be effective at the time
specified therein, or, if no time be specified, at the time of its receipt by
the Board of Directors or such officer, and the acceptance of the resignation
shall not be necessary to make it effective. Resignations not submitted in
writing may be evidenced by a written acknowledgement of receipt thereof signed
by the receiving director or officer of the corporation or by acknowledgement
of receipt thereof in the minutes of a subsequent stockholders' or directors'
meeting.

SECTION 15. TELEPHONIC MEETINGS AND PARTICIPATION.
Members of the Board of Directors or any committee designated thereby
may participate in any meeting of such Board of Directors or committee by means
of conference telephone or similar communications equipment by which all
persons participating can hear each other. Participation in a meeting pursuant
to this section shall constitute presence in person at such meeting.

-18-
<PAGE> 19

ARTICLE IV

COMMITTEES

SECTION 1. COMMITTEES GENERALLY.
The Board of Directors may, by resolutions passed by a majority of the
members of the Board of Directors then in office, designate members of the
Board of Directors to constitute committees that, except as otherwise provided
in Sections 2 and 3 of this Article IV, in each case, shall consist of such
number of directors, and shall have and may execute such powers, as may be
determined and specified in the respective resolutions appointing them. Any
such committee may fix its rules of procedure, determine its manner of acting
and the time and place, whether within or without the State of Delaware, of its
meetings and specify what notice thereof, if any, shall be given, unless these
Bylaws, or the Board of Directors by resolution, shall provide otherwise.
Unless otherwise provided by the Board of Directors or such committee, the
quorum, voting and other procedures shall be the same as those applicable to
actions taken by the Board of Directors. A majority of the members of the
Board of Directors then in office shall have the power to change the membership
of any such committee at any time, to fill vacancies therein and to discharge
any such committee or to remove any member thereof, either with or without
cause, at any time.

SECTION 2. AUDIT COMMITTEE. The Audit Committee shall consist of such
number of directors, who shall not be officers or

-19-
<PAGE> 20

employees of the corporation or any of its affiliates, not less than three, as
shall from time to time be determined by the Board of Directors. The Audit
Committee shall each year make a recommendation, based on a review of
qualifications, to the Board of Directors for the appointment of independent
public accountants to audit the financial statements of the corporation and to
perform such other duties as the Board of Directors may from time to time
prescribe. As part of such review of qualifications, the Audit Committee shall
consider management's plans for engaging the independent public accountants for
management advisory services to determine whether such services could impair
the public accountants' independence. The Audit Committee shall examine and
make recommendations to the Board of Directors with respect to the scope of
audits conducted by the corporation's independent public accountants and
internal auditors. The Audit Committee shall review all recommendations made
by the corporation's independent public accountants and internal auditors to
the Audit Committee or the Board of Directors with respect to the accounting
methods and the system of internal control used by the corporation, and shall
advise the Board of Directors with respect thereto. The Audit Committee shall
review reports from the corporation's independent public accountants and
internal auditors concerning compliance by management with governmental laws
and regulations and with the corporation's policies relating to ethics,
conflicts of interest and disbursements of funds. The Audit Committee shall
meet with

-20-
<PAGE> 21

the corporation's independent public accountants and/or internal auditors
without management present whenever the Audit Committee shall deem it
appropriate.

SECTION 3. COMPENSATION COMMITTEE. The Compensation Committee shall consist
of such number of directors, who shall not be officers or employees of the
corporation or any of its affiliates, not less than three, as shall from time
to time be determined by the Board of Directors. As authorized by the Board of
Directors, the Compensation Committee shall make recommendations to the Board
of Directors with respect to the administration of the salaries, bonuses, and
other compensation to be paid to the officers of the corporation, including the
terms and conditions of their employment, and shall administer all stock option
and other benefit plans (unless otherwise specified in plan documents)
affecting officers' direct and indirect remuneration.

ARTICLE V

OFFICERS AND AGENTS

SECTION 1. OFFICERS.
The officers of the corporation shall be a President (or in the event
that the office of the President shall be held by two persons pursuant to
Article V, Section 4 hereof, co-Presidents), one or more Vice Presidents, a
Treasurer and a Secretary, all of whom shall be elected by the Board of
Directors. In addition,

-21-
<PAGE> 22

the Board of Directors may elect one or more Assistant Secretaries or Assistant
Treasurers, or appoint such other additional officers and agents as they may
deem advisable. Any two or more offices may be held by the same person except
the offices of President and Secretary. The officers shall be elected each
year at the annual meeting of the Board of Directors which shall be held each
year pursuant to Article III, Section 6 hereof.

SECTION 2. TERM.
Each officer and each agent shall hold office until his successor is
elected or appointed and qualified or until his death, resignation or renewal
by the Board of Directors.

SECTION 3. AUTHORITY, DUTIES AND COMPENSATION.
All elected or appointed officers and agents shall have such authority
and perform such duties as may be provided in the Bylaws or as may be
determined by the Board of Directors or the President. They shall receive such
compensation for their services as may be determined by the Board of Directors,
or by the President with respect to all officers and agents subordinate to him.
Notwithstanding any other provisions of these Bylaws, the Board of Directors
shall have power from time to time by resolution to prescribe by what officers
or agents particular documents or instruments or particular classes of
documents or instruments shall be signed, countersigned, endorsed or executed,

-22-
<PAGE> 23

provided, however, that any person, firm or corporation shall be entitled to
accept and to act upon any document or instrument signed, countersigned,
endorsed or executed by officers or agents of the company pursuant to the
provisions of these Bylaws unless prior to receipt of such document or
instrument such person, firm or corporation has been furnished with a certified
copy of a resolution of the Board of Directors prescribing a different
signature, countersignature, endorsement or execution.

SECTION 4. OFFICE OF THE PRESIDENT.
The office of the President of the corporation may be held by one or
two persons, at the discretion of the Board of Directors. In the event that
the office of the President shall be held by two persons, they shall be
co-Presidents of the corporation, each of them acting alone with full power and
authority to exercise the rights and discharge the duties of the office of the
President. The President shall be the Chief Executive Officer of the
corporation and shall be the Chief Operating Officer of the corporation. In
the event that the office of the President shall be held by two persons, they
shall be co-Chief Executive Officers of the corporation and co-Chief Operating
Officers of the corporation, each of them acting alone with full power and
authority to exercise the rights and discharge the duties of such offices. The
President(s) shall preside at all meetings of stockholders and of the Board of
Directors. The President(s) shall be charged with and have the

-23-
<PAGE> 24

direction and supervision of all of the corporation's business and operations
with the concurrence of the other officers of the corporation.

SECTION 5. VICE PRESIDENTS.
In the absence or disability of the President, his duties shall be
performed by a Vice President, as authorized by the President. Such officer or
officers shall perform such other duties and have such other powers as may be
assigned by the President.

SECTION 6. TREASURER.
The Treasurer shall keep and account for all moneys, funds and
property of the corporation which shall come into his hands, and shall render
such accounts and present such statements to the Board of Directors as may be
required of him. Unless the Board of Directors shall prescribe otherwise, the
Treasurer shall deposit all funds of the corporation which may come into his
hands in such bank or banks as the Board of Directors may designate and in
accounts in the name of the corporation, shall endorse for collection bills,
notes, checks and other negotiable instruments of the corporation or cause them
to be signed in facsimile or otherwise as the Board of Directors may determine,
and shall pay out money as the business of the corporation may require, making
proper vouchers therefor. In the absence or

-24-
<PAGE> 25

disability of the Treasurer, any Assistant Treasurer shall have the authority
and perform the duties of the Treasurer.

SECTION 7. SECRETARY.
The Secretary shall give or cause to be given all required notices of
meetings of stockholders and of the Board of Directors, shall attend such
meetings when practicable, shall record and keep the minutes and all other
proceedings thereof, shall attest such records after every meeting by his
signature, shall safely keep all documents and papers which shall come into his
possession and shall truly keep the books and accounts of the corporation
appertaining to his office. In the absence or disability of the Secretary, any
Assistant Secretary shall have authority and perform the duties of the
Secretary.

SECTION 8. RESIGNATION AND REMOVAL OF OFFICERS.
Any executive officer of the corporation may be removed, either for
cause or without cause, by the affirmative vote of a majority of the full Board
of Directors. Other officers and agents may be removed either for cause or
without cause by the Board of Directors or the President. Removal of an
executive officer by the Board of Directors or by the President, as the case
may be, shall be without prejudice to the contract rights, if any, of the
person so removed. Any officer may resign at any time by written notice to the
corporation. Unless otherwise stated in such notice of resignation, the
acceptance thereof

-25-
<PAGE> 26

shall not be necessary to make it effective; and such resignation shall take
effect at the time specified therein or, in the absence of such specification,
it shall take effect upon the receipt thereof.

SECTION 9. VACANCIES.
Vacancy in any office or position by reason of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
provided in Article V, Section 1 hereof for regular appointment to such office.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS AND OFFICERS

SECTION 1. RIGHT TO INDEMNIFICATION.
Each person who was or is made a party or is threatened to be made a
party to or is involved in or called as a witness in any Proceeding (as
hereinafter defined) because he or she is an Indemnified Person (as hereinafter
defined) shall be indemnified and held harmless by the corporation to the
fullest extent permitted under the DGCL, as the same now exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the corporation to provide broader
indemnification rights than the DGCL permitted the corporation to provide prior
to such amendment). Such indemnification shall cover all expenses incurred by
an Indemnified Person (including, but not limited to, attorneys'

-26-
<PAGE> 27

fees and other expenses of litigation) and all liabilities and losses
(including, but not limited to, judgments, fines, ERISA or other excise taxes
or penalties and amounts paid or to be paid in settlement) incurred by such
person in connection therewith.
Notwithstanding the foregoing, except with respect to indemnification
specified in this Article VI, the corporation shall indemnify an Indemnified
Person in connection with a Proceeding (or part thereof) initiated by such
person only if such Proceeding (or part thereof) was authorized by the Board of
Directors of the corporation.
For purposes of this Article VI:
(i) a "Proceeding" is an action, suit or proceeding, whether
civil, criminal, administrative or investigative, and any appeal
therefrom including, without limitation, any such action, suit,
proceeding or appeal by or in the right of the corporation;
(ii) an "Indemnified Person" is a person who is, was, or had
agreed to become a director, officer, employee, agent or a Delegate,
as defined herein, of the corporation or the legal representative of
any of the foregoing; and
(iii) a "Delegate" is a person serving at the request of the
corporation or a subsidiary of the corporation as a director, trustee,
fiduciary, or officer of such subsidiary or of another corporation,
partnership, joint venture, trust or other enterprise.

-27-
<PAGE> 28

SECTION 2. EXPENSES.
Expenses, including attorneys' fees, incurred by a person indemnified
pursuant to Article VI, Section 1 in defending or otherwise being involved in a
Proceeding shall be paid by the corporation in advance of the final disposition
of such Proceeding, including any appeal therefrom, upon receipt of an
undertaking (the "Undertaking") by or on behalf of such person to repay such
amount if it shall ultimately be determined that he or she is not entitled to
be indemnified by the corporation; provided that in connection with a
Proceeding (or part thereof) initiated by such person, except a Proceeding
authorized by Article VI, Section 3, the corporation shall pay said expenses in
advance of final disposition only if such Proceeding (or part thereof) was
authorized by the Board of Directors. A person to whom expenses are advanced
pursuant hereto shall not be obligated to repay pursuant to the Undertaking
until the final determination of any pending Proceeding in a court of competent
jurisdiction concerning the right of such person to be indemnified or the
obligation of such person to repay pursuant to the Undertaking.

SECTION 3. PROTECTION OF RIGHTS.
If a claim under Article VI, Section 1 is not promptly paid in full by
the corporation after a written claim has been received by the corporation or
if expenses pursuant to Article VI, Section 2 of this Article have not been
promptly advanced

-28-
<PAGE> 29

after a written request for such advancement accompanied by the Undertaking has
been received by the corporation, the claimant may at any time thereafter bring
suit against the corporation to recover the unpaid amount of the claim or the
advancement of expenses. If successful, in whole or in part, in such suit,
such claimant shall also be entitled to be paid the reasonable expense thereof
(including, without limitation, attorneys' fees). It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any Proceeding in advance of its final disposition where
the required Undertaking has been tendered to the corporation) that
indemnification of the claimant is prohibited by law, but the burden of proving
such defense shall be on the corporation. Neither the failure of the
corporation (including its Board of Directors, independent legal counsel, or
its stockholders) to have made a determination, if required, prior to the
commencement of such action that indemnification of the claimant is proper is
the circumstances, nor an actual determination by the corporation (including
its Board of Directors, independent legal counsel, or its stockholders) that
indemnification of the claimant is prohibited, shall be a defense to the action
or create a presumption that indemnification of the claimant is prohibited.

SECTION 4. MISCELLANEOUS.
(a) Non-Exclusivity of Rights. The rights conferred on any person
by this Article VI shall not be exclusive of any other

-29-
<PAGE> 30

rights which such person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise. The Board of Directors
shall have the authority, by resolution, to provide for such indemnification of
employees or agents of the corporation or others and for such other
indemnification of directors, officers or Delegates as it shall deem
appropriate.
(b) Insurance, Contracts and Funding. The corporation may
maintain insurance, at its expense, to protect itself and any director,
officer, employee, or agent of, or person serving in any other capacity with,
the corporation or another corporation, partnership, joint venture, trust or
other enterprise against any expenses, liabilities or losses, whether or not
the corporation would have the power to indemnify such person against such
expenses, liabilities or losses under the DGCL. The corporation may enter into
contracts with any director, officer or Delegate of the corporation in
furtherance of the provisions of this Article VI and may create a trust fund,
grant a security interest or use other means (including, without limitation, a
letter of credit) to ensure the payment of such amounts as may be necessary to
effect the advancing of expenses and indemnification as provided in this
Article VI.
(c) Contractual Nature. The provisions of this Article VI shall
be applicable to all Proceedings commenced or continuing after its adoption,
whether such arises out of events, acts or

-30-
<PAGE> 31

omissions which occurred prior or subsequent to such adoption, and shall
continue as to a person who has ceased to be a director, officer or Delegate
and shall inure to the benefit of the heirs, executors and administrators of
such person. This Article VI shall be deemed to be a contract between the
corporation and each person who, at any time that this Article VI is in effect,
serves or agrees to serve in any capacity which entitles him to indemnification
hereafter and any repeal or other modification of this Article or any repeal or
modification of the DGCL or any other applicable law shall not limit any
Indemnified Person's entitlement to the advancement of expenses or
indemnification under this Article VI for Proceedings then existing or later
arising out of events, acts or omissions occurring prior to such repeal or
modification, including, without limitation, the right to indemnification for
Proceedings commenced after such repeal or modification to enforce this Article
VI with regard to Proceedings arising out of acts, omissions or events
occurring prior to such repeal or modification.
(d) Severability. If this Article VI or any portion hereof shall
be invalidated or held to be unenforceable on any ground by any court of
competent jurisdiction, the decision of which shall not have been reversed on
appeal, such invalidity or unenforceability shall not affect the other
provisions hereof, and this Article VI shall be construed in all respects as if
such invalid or unenforceable provisions had been omitted therefrom.

-31-
<PAGE> 32

ARTICLE VII

SHARES OF CAPITAL STOCK

SECTION 1. SHARE CERTIFICATES.
Every holder of stock in the corporation shall be entitled to a
certificate or certificates, to be in such form as the Board of Directors may
from time to time prescribe, signed by the President or a Vice President and by
the Secretary or Treasurer or an Assistant Secretary or Assistant Treasurer,
and where signed by a transfer agent or an assistant transfer agent by a
registrar the signature of such officers of the corporation may be facsimile.
Each such certificate shall exhibit the name of the registered holder thereof,
the number and class of shares and the designation of the series, if any, which
the certificate represents and the number of shares represented thereby. The
Board of Directors may, if it so determines, direct that certificates for
shares of stock of the corporation be signed by a transfer agent and/or
registered by a registrar, in which case such certificates shall not be valid
until so signed and/or registered. In case any officer of the corporation who
shall have signed, or whose facsimile signature shall have been used on any
certificate for shares of stock of the corporation, shall cease to be such
officer, whether because of death, resignation or otherwise, before such
certificate shall have been delivered, it may be delivered by the corporation
as though the person who signed such certificate or whose facsimile signature
shall have been used thereon had not ceased to be such officer.

-32-
<PAGE> 33

SECTION 2. TRANSFERS OF SHARES.
Transfers of shares of stock of the corporation shall be made only on
the books of the corporation by the registered holder thereof or by his
attorney thereunto authorized by an instrument duly executed and witnessed and
filed with the corporation, and on surrender of the certificate or certificates
for such shares properly endorsed and evidence of the payment of all taxes
imposed upon such transfer. Every certificate surrendered for transfer shall
be cancelled and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled.

SECTION 3. TRANSFER AGENTS AND REGISTRARS.
The Board of Directors may appoint any one or more qualified banks,
trust companies or other corporations organized under any law of any state of
the United States or under the laws of the United States as agent or agents for
the corporation in the transfer of the stock of the corporation and likewise
may appoint any one or more qualified banks, trust companies or other
corporations as registrar or registrars of the stock of the corporation.

SECTION 4. LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES.
New certificates for shares of stock may be issued to replace
certificates lost, stolen, destroyed or mutilated upon

-33-
<PAGE> 34

such terms and conditions, which may but need not include the giving of a
satisfactory bond of indemnity, as the Board of Directors may from time to time
determine.

SECTION 5. HOLDERS OF RECORD.
The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder and owner in fact thereof and shall not
be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by the laws of the
State of Delaware.

SECTION 6. TREASURY SHARES.
Shares of the corporation's stock held in its treasury shall not be
voted, directly or indirectly, at any meeting.

ARTICLE VIII

GENERAL PROVISIONS

SECTION 1. CORPORATE SEAL.
The Board of Directors shall prescribe the form of a suitable
corporate seal, which shall contain the full name of the corporation and the
year and state of incorporation. Such seal may be used by causing it or a
facsimile or reproduction thereof to be affixed to or placed upon the document
to be sealed.

-34-
<PAGE> 35

SECTION 2. FISCAL YEAR.
The fiscal year of the corporation shall end on the last day of
December in each year or shall begin and end on such other days as shall be
fixed by resolution of the Board of Directors.

ARTICLE IX

AMENDMENTS

SECTION 1. AMENDMENTS.
The Board of Directors shall have the power to amend, alter, change,
adopt or repeal the Bylaws of the corporation at any annual, regular or special
meeting. The stockholders also shall have the power to amend, alter, change,
adopt or repeal the Bylaws of the corporation at any annual or special meeting,
subject to the requirements of the Certificate of Incorporation.

-35-