UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 27, 2023
(Date of earliest event reported)
PEOPLES FINANCIAL SERVICES CORP.
(Exact name of registrant as specified in its Charter)
PA |
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001-36388 |
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23-2391852 |
(State or other jurisdiction |
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(Commission file number) |
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(IRS Employer |
of incorporation) |
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Identification No.) |
150 North Washington Avenue, Scranton, Pennsylvania 18503-1848
(Address of Principal Executive Offices) (Zip Code)
(570) 346-7741
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General
Instruction A.2. below):
x | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $2.00 par value |
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PFIS |
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The Nasdaq Stock Market |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
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On October 27, 2023, the Board of Directors (the
“Board”) of Peoples Financial Services Corp. (the “Company”) approved a second amendment and restatement of the
Company’s Amended and Restated Bylaws (the “Amended and Restated Bylaws”), effective immediately, as well as certain
conditional amendments to Sections 11.3 and 11.5 of the Amended and Restated Bylaws that will become effective, if at all, at the effective
time of the Company’s proposed merger (the “Merger”) with FNCB Bancorp, Inc. (“FNCB”), subject to the completion
of the Merger.
The following sections of the Amended and Restated
Bylaws have been amended to, among other things:
| · | Section 2.1: Expressly provide that a meeting may be held by means of the Internet or other electronic
communications technology; |
| · | Section 2.2: Describe the business to be conducted at each annual meeting of the Company’s shareholders
(other than the elections of directors, which is governed by Section 11.1 of the Amended and Restated Bylaws); |
| · | Section 2.4: Provide greater specificity regarding the contents, delivery requirement and waiver of the
notice of meetings of the Company’s shareholders; |
| · | Section 2.5: Provide the order of presiding officers at each meeting of the Company’s shareholders
in the event that the Chairman of the Board is absent; |
| · | Section 2.6: Provide greater specificity and requirements for a Shareholder Notice (as defined in the
Amended and Restated Bylaws), and provide additional information regarding the proposing shareholder and any Shareholder Associated Person
(as defined in the Amended and Restated Bylaws); |
| · | Section 5.2: Provide that any shareholders soliciting proxies from other shareholders must use a proxy
card other than white, which is reserved for exclusive use by the Company; |
| · | Section 9.1: Confirm procedures of each meeting of shareholders with respect to participation in meetings
by electronic means; |
| · | Section 11.1: Provide updates to the procedures and disclosure requirements for the nomination of director
candidates for election at meetings of shareholders, including to require additional information in a notice of nomination submitted by
a shareholder and to address the adoption by the U.S. Securities and Exchange Commission of the “universal proxy card” rules,
as set forth in Rule 14a-9 of the Securities Exchange Act of 1934, as amended (the “Universal Proxy Card Rules”); such amendments
require that nominating shareholders comply with the Universal Proxy Card Rules and provide that a shareholder nominee’s director
candidate will be disregarded by the Company if the nominating shareholder has failed to provide evidence of its compliance with the Universal
Proxy Card Rules; |
| · | Section 32.1: Provide that, unless the Company consents in writing to the selection of an alternate
forum, the state courts of the Commonwealth of Pennsylvania in and for Lackawanna County shall be the sole and exclusive forum, to
the fullest extent permitted by law, for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action
asserting a claim of a breach of fiduciary duty owed by any director or officer of the Company to the Company or its shareholders;
(iii) any action asserting a claim against the Company arising pursuant to the Business Corporation Law of the Commonwealth of
Pennsylvania, the Articles of Incorporation of the Company (the “Articles”) or the Amended and Restated Bylaws; (iv) any
action seeking to interpret, apply, enforce or determine the validity of the Articles or the Amended and Restated Bylaws; or (v) any
action asserting a claim against the Company governed by the internal affairs doctrine; |
| · | Section 32.2: Provide that, unless the Company consents in writing to the selection of an alternative
forum, the federal district courts of the United States will, to the fullest extent permitted by law, be the sole and exclusive forum
for the resolution of any complaint asserting a cause of action under the Securities Act of 1933, as amended; and |
| · | Delete Exhibit A and references thereto in the Amended and Restated Bylaws in their entirety. |
In addition, subject to completion of the
Merger, at the effective time of the Merger, Sections 11.3 and 11.5 of the Amended and Restated Bylaws would be amended to, among
other things:
| · | Section 11.3: Provide that at the effective time of the Merger, (i) that Mr. William E. Aubrey, II
shall continue to serve as Chairman of the Board and Mr. Louis A. DeNaples, Sr., shall become Vice Chairman of the Board; (ii) that the
Board shall be comprised of 16 directors, of which 8 shall be designated by the Company and 8 shall be designated by FNCB, to hold office
until his or her successor is elected and qualified or otherwise in accordance with the Articles and the Amended and Restated Bylaws; (iii) that such section will remain effective for three years after the closing
date of the Merger (the “Expiration Date”), provided that it may be amended or waived by at least 80% of the Company’s
Board then in office; and (iv) the procedures for filling vacancies on the Board between the Effective Date and Expiration Date; and |
| · | Section 11.5: Provide that certain directors to be appointed to the Company’s Board in connection
with the Merger who are age 73 or older at the effective time and each incumbent director who will be age 73 or older at the
expiration of his or her current term shall be eligible to stand for election to one additional term, regardless of their age. |
The foregoing summary of the Amended and Restated
Bylaws and the conditional amendments to Sections 11.3 and 11.5 are qualified in their entirety by reference to, and should be read in
conjunction with, the Amended and Restated Bylaws filed as Exhibit 3.1 to this Current Report on Form 8-K and incorporated herein by reference,
and the text of Sections 11.3 and 11.5 that would become effective at the effective time of the Merger, which is filed as Exhibit 3.2
to this Current Report on Form 8-K and incorporated herein by reference. In addition, a marked copy of the Amended and Restated Bylaws
showing all changes made to the Company’s prior bylaws is filed as Exhibit 3.3 to this Current Report on Form 8-K.
Forward-Looking Statements
We make statements in this Current Report on Form
8-K, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results
and/or other matters regarding or affecting the Company and Peoples Security Bank and Trust Company (collectively, “Peoples”)
that are considered “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use
of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,”
“intend” and “potential.” For these statements, Peoples claims the protection of the statutory safe harbors for
forward-looking statements.
Peoples cautions you that a number of important
factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors
include, but are not limited to: prevailing economic and political conditions, particularly in our market area; the impact on financial
markets from geopolitical conflicts such as the military conflict between Russia and Ukraine and the developing conflict in Israel; credit
risk associated with our lending activities; changes in interest rates, loan demand, deposit flows, real estate values and competition;
changes in customer behaviors, including consumer spending, borrowing and savings habits; changes in accounting principles, policies,
and guidelines including our adoption of Current Expected Credit Losses (CECL) methodology, and any potential volatility in the Company’s
operating results due to application of the CECL methodology; changes in any applicable law, rule, regulation or practice with respect
to tax or legal issues; our ability to identify and address cyber-security risks and other economic, competitive, governmental, regulatory
and technological factors affecting Peoples’ operations, pricing, products and services; adverse developments in the financial industry
generally, such as recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory
actions and costs, and related impacts on customer and client behavior and other factors that may be described in Peoples’ Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the U.S. Securities and Exchange Commission (“SEC”)
from time to time.
In addition to these risks, acquisitions and business
combinations present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations and,
specifically, the Merger may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may
be significantly harder, or take longer to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition
and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or
legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Peoples following
the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising
as a result of those issues.
The forward-looking statements are made as of
the date of this Current Report on Form 8-K, and, except as may be required by applicable law or regulation, Peoples assumes no obligation
to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking
statements.
Additional Information regarding the Merger
and Where to Find It
In connection with the proposed Merger, the Company
will file a registration statement on Form S-4 with the SEC. The registration
statement will include a joint proxy statement of the Company and FNCB, which also constitutes a prospectus of the Company, that will
be sent to shareholders of the Company and shareholders of FNCB seeking certain approvals related to the proposed transaction.
The information contained in this report does
not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND FNCB AND THEIR RESPECTIVE
AFFILIATES ARE URGED TO READ, WHEN AVAILABLE, THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS TO BE INCLUDED
WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE COMPANY, FNCB AND THE PROPOSED TRANSACTION.
Investors and shareholders will be able to obtain
a free copy of the registration statement, including the joint proxy statement/prospectus as well as other relevant documents filed with
the SEC containing information about the Company and FNCB without charge, at the SEC s website www.sec.gov. Copies of documents filed
with the SEC by the Company will be made available free of charge in the “Investor Relations” section of the Company’s
website, www.psbt.com under the heading “SEC Filings.” Copies of documents filed with the SEC by FNCB will be made available
free of charge in the “About FNCB” section of FNCB’s website, www.fncb.com.
Item 9.01 |
Financial Statements and Exhibits. |
(a) |
Financial statements of businesses acquired. None. |
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(b) |
Pro forma financial information. None. |
(c) |
Shell company transactions: None. |
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(d) |
Exhibits. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PEOPLES FINANCIAL SERVICES CORP. |
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By: |
/s/ Craig W. Best |
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Craig W. Best
Chief Executive Officer |
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(Principal Executive Officer) |
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Dated: November 2, 2023 |
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Exhibit 3.1
SECOND AMENDED AND RESTATED BYLAWS OF
PEOPLES FINANCIAL SERVICES CORP.
Amended and Restated Effective October 27,
2023
Article 1
CORPORATION OFFICE
Section 1.1 The
Corporation shall have and continuously maintain in Pennsylvania a registered office which may, but need not, be the same as its place
of business and at an address to be designated from time to time by the Board of Directors.
Section 1.2 The
Corporation may also have offices at such other places as the Board of Directors may from time to time designate or the business of the
Corporation may require.
Article 2
SHAREHOLDERS’ MEETINGS
Section 2.1 All
meetings of the shareholders shall be held at such time and place as may be fixed from time to time by the Board of Directors; provided,
however, if a meeting is held by means of the Internet or other electronic communications technology in a fashion pursuant to which shareholders
have the opportunity to read or hear the proceedings substantially concurrently with their occurrence, vote on matters submitted to the
shareholders and pose questions to the directors, the meeting need not be held at a particular geographic location. If no place is so
fixed for a meeting, it shall be held at the Corporation’s then principal executive office.
Section 2.2 The
annual meeting of the shareholders shall be held no later than the thirtieth (30th) day of May in each year. At an annual meeting
of shareholders, only such business (other than elections of directors, which must be made in compliance with, and shall be exclusively
governed by, Section 11.1) shall be conducted as shall have been properly brought before the annual meeting (i) pursuant to
the Corporation’s notice of the meeting, (ii) by or at the direction of the Board of Directors, (iii) by the chairman
of the meeting, or (iv) by any shareholder of the Corporation who is a shareholder of record both at the time of giving of the notice
provided for in Section 2.6 and at the time of the annual meeting, who shall be entitled to vote at such meeting and who shall have
complied with the notice procedures set forth in Section 2.6. Clause (iv) in the immediately preceding sentence shall be the
exclusive means for a shareholder to submit such business (other than matters properly brought under Rule 14a-8 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and included in the Corporation’s notice of meeting) before an
annual meeting of shareholders.
Section 2.3 Special
meetings of the shareholders may be called at any time by only the chairman of the Board, the President, a majority of the Board of Directors
or of its Executive Committee. At any time, upon written request of any person or persons who have duly called a special meeting, it shall
be the duty of the secretary to fix the date of the meeting, to be held not more than sixty (60) days after the receipt of the request
and to give due notice thereof. If the secretary shall neglect or refuse to fix the date of the meeting and give notice thereof, the person
or persons calling the meeting may do so.
Section 2.4 Written
notice of all meetings, other than adjourned meetings of shareholders, shall set forth the place (or if held by means of the Internet
or other electronic communications technology, the means of remote communications by which shareholders and proxyholders may be deemed
to be present in person and vote at such meeting), date and hour (each, as determined in accordance with Section 2.1), and, in case
of special meetings of shareholders, the general nature of the business to be transacted in accordance with any requirements set forth
in the Pennsylvania Business Corporation Law of 1988 (as amended from time to time, the “PBCL”). Each such notice shall be
served upon, or mailed, postage prepaid, or telegraphed, charges prepaid, at least ten (10) days before such meeting, unless a greater
period of notice is required by statute or by these Bylaws, to each shareholder entitled to vote thereat at such address as appears on
the transfer books of the Corporation. If such notice is mailed, it shall be deemed to have been given to a shareholder when deposited
in the United States mail, postage prepaid, directed to the shareholder at the address of such shareholder as it appears on the record
of shareholders of the Corporation or supplied by such shareholder to the Corporation for the purpose of notice. Notice given by electronic
transmission shall be deemed given (i) if by facsimile, when directed to a number at which the shareholder has consented to receive
such notice; (ii) if by electronic mail, when directed to an electronic mail address at which the shareholder consented to receive
such notice; (iii) if by posting on an electronic network together with separate notice to the shareholder of such specific posting,
upon the later of (A) such posting and (B) giving of such separate notice; and (iv) if by any other form of electronic
transmission, when directed to the shareholder. No notice of any meeting of shareholders need be given to any shareholder who properly
waives notice, whether before or after the meeting and whether in writing or by electronic transmission or otherwise. Neither the business
to be transacted at, nor the purpose of, any meeting need be specified in a waiver of notice. The attendance, in person or by proxy, of
any shareholder at any meeting of shareholders shall constitute a proper waiver of notice of such meeting, except if the shareholder attends
a meeting solely for the express purpose of objecting, prior to or at the commencement of such meeting, to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
Section 2.5 The
officer presiding over a shareholders’ meeting shall have any and all powers and authority necessary, in such officer’s sole
discretion, to conduct an orderly meeting, preserve order and determine any and all procedural matters. The officer presiding over a shareholders’
meeting may also establish such rules and regulations for the conduct of the meeting as such officer may deem to be reasonably necessary
or desirable for the orderly and expeditious conduct of the meeting, including the ability to impose reasonable limits on the amount of
time at the meeting taken up in remarks by any one shareholder or group of shareholders. In addition, until the business to be completed
at a meeting of shareholders is completed, the officer presiding over the shareholders’ meeting is expressly authorized to temporarily
adjourn and postpone the meeting from time to time subject to any limitations for adjournment specified elsewhere in these Bylaws. At
every meeting of the shareholders, the Chairman of the Board, or in his absence, one of the following persons present shall act as chairman
in the order stated, shall preside: any presiding officer designated by the Board of Directors, the President or the vice presidents in
their order of earliest election to that office; and the Secretary, or in his absence, a person appointed by the chairman, shall act as
secretary.
Section 2.6
(a) Except
as otherwise provided by law or in these Bylaws, or except as permitted by the presiding officer of the meeting in the exercise of such
officer’s sole discretion in any specific instance, the business which shall be voted upon or discussed at any annual or special
meeting of the shareholders shall (i) have been specified in the written notice of the meeting (or any supplement thereto) given
by the Corporation, (ii) be brought before the meeting at the direction of the Board of Directors, or (iii) in the case of an
annual meeting of shareholders, have been specified in a written notice given to the Corporation by or on behalf of any shareholder who
shall have been a shareholder of record on the record date for such meeting and who shall continue to be entitled to vote thereat (the
“Shareholder Notice”), in accordance with all of the requirements set forth below.
(b) Each
Shareholder Notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation addressed to the
attention of the President or Secretary (i) in the case of an annual meeting that is called for a date that is within thirty (30)
days before or after the anniversary date of the immediately preceding annual meeting of shareholders, not less than sixty (60) days nor
more than ninety (90) days prior to such anniversary date, provided, that a proposal submitted by a shareholder for inclusion in the Corporation’s
proxy statement for an annual meeting which is appropriate for inclusion therein and otherwise complies with Exchange Act Rule 14a-8
(including timeliness), or any successor rule, shall be deemed to have also been submitted timely pursuant to these by laws and (ii) in
the case of an annual meeting that is called for a date that is not within thirty (30) days before or after the anniversary date of the
immediately preceding annual meeting, or in the case of a special meeting, not later than the close of business on the fifth (5th) day
following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting date (which
shall include disclosure of the meeting date given to a national securities exchange or the Financial Industry Regulatory Authority) was
made. Each such Shareholder Notice must set forth (i) the name and address of the shareholder who intends to bring the business before
the meeting (“Proposing Shareholder”); (ii) the name and address of any Shareholder Associated Person (as defined below),
if different than the Proposing Shareholder, or any of the shares of the Corporation which are owned of record and beneficially by the
Proposing Shareholder and the number which are owned beneficially by any Shareholder Associated Person; (iii) any interest (other
than an interest solely as a shareholder) which the Proposing Shareholder or a Shareholder Associated Person has in the business being
proposed by the Proposing Shareholder; (iv) a description of all agreements, arrangements and understandings between the Proposing
Shareholder and any Shareholder Associated Person on the one hand and any other person or persons (naming such person or persons) pursuant
to which the proposal in the Shareholder Notice is being made on the other hand, and a representation that the Proposing Shareholder will
notify the Corporation in writing of any such agreement, arrangement or understanding in effect as of the close of business on the record
date for the meeting promptly, and in no event later than ten (10) days, following the later of the record date or the date notice
of the record date is first publicly disclosed; (v) a description of the business which the Proposing Shareholder seeks to bring
before the meeting, the reason for doing so and, if a specific action is to be proposed, the text of the resolution or resolutions which
the Proposing Shareholder proposes that the Corporation adopt;(vi) a representation that the Proposing Shareholder is at the time
of giving the Shareholder Notice, was or will be on the record date for the meeting, and will be on the meeting date a holder of record
of shares of the Corporation entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to bring the
business specified in the Shareholder Notice before the meeting; (vii) a representation that the Proposing Shareholder will notify
the Corporation in writing of the number and class of shares owned beneficially or of record by the Proposing Shareholder and any Shareholder
Associated Person as of the close of business on the record date for the meeting promptly, and in no event later than ten (10) days,
following the later of the record date or the date notice of the record date is first publicly disclosed; (viii) such other information
regarding or each matter of business to be proposed by such Proposing Shareholder as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission (the “Commission”) had the matter been proposed,
or intended to be proposed by the Board of Directors; and (ix) the information required by Section 2.6(c), and a representation
that the Proposing Shareholder will notify the Corporation in writing of any changes in that information as of the close of business on
the record date for the meeting promptly, and in no event later than ten (10) days, following the later of the record date or the
date notice of the record date is first publicly disclosed. This Section 2.6 shall be the exclusive means for a Proposing Shareholder
to submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act, and included in the Corporation’s
notice of meeting) before any shareholder meeting. The presiding officer of the meeting may, in such officer’s sole discretion,
refuse to acknowledge any business proposed by a shareholder which the presiding officer determines is not made in compliance with the
foregoing procedure. The provisions of this Section 2.6 shall also govern what constitutes timely notice for purposes of Rule 14a-4(c) of
the Exchange Act.
(c) A
notice submitted by a Proposing Shareholder under this Section 2.6 must describe in reasonable detail, with respect to the Proposing
Shareholder and any Shareholder Associated Person: (i) any class or series and number of the Corporation’s securities, including
shares of the Corporation and Derivative Instruments (as defined below), directly or indirectly beneficially owned by the Proposing Shareholder
or a Shareholder Associated Person, or any other direct or indirect opportunity for the Proposing Shareholder or Shareholder Associated
Person to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (ii) any
interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which
the Proposing Shareholder or Shareholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest
in a general partner; (iii) any hedging or other transaction or series of transactions that has been entered into by or on behalf
of, or any other agreement, arrangement or understanding (including, without limitation, any put, short position or any borrowing or lending
of shares) that has been made by or on behalf of, a Proposing Shareholder or any Shareholder Associated Person, the effect or intent of
which is to mitigate loss to, or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, the
Proposing Shareholder or any Shareholder Associated Person with respect to any share of the Corporation; (iv) any proxy, contract,
arrangement, understanding, or relationship pursuant to which such Proposing Shareholder or Shareholder Associated Person has a right
to vote any shares of any class or series of the Corporation’s capital stock; (v) any short interest of such Proposing Shareholder
or Shareholder Associated Person in any security of the Corporation (for purposes of this Section 2.6(c), a person shall be deemed
to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (vi) any
rights to dividends on any securities of the Corporation owned beneficially by such Proposing Shareholder or Shareholder Associated Person
that are separated or separable from the underlying securities of the Corporation; (vii) any proportionate interest in shares of
any class or series of the Corporation’s capital stock or Derivative Instruments held, directly or indirectly, by a general or limited
partnership in which such Proposing Shareholder or Shareholder Associated Person is a general partner or, directly or indirectly, beneficially
owns an interest in a general partner; (viii) any performance-related fees (other than an asset-based fee) to which such Proposing
Shareholder or Shareholder Associated Person is entitled based on any increase or decrease in the value of securities of the Corporation
or Derivative Instruments as of the date of such notice, including any such interests held by members of the immediate family of such
Proposing Shareholder or Shareholder Associated Person sharing the same household (which information shall be supplemented by such Proposing
Shareholder and Shareholder Associated Person not later than ten (10) days after the record date for the meeting to disclose such
ownership as of the record date); (ix) any significant equity interests or any Derivative Instruments or short interests in any principal
competitor of the Corporation held by such Proposing Shareholder or Shareholder Associated Person; (x) any direct or indirect interest
of such Proposing Shareholder or any Shareholder Associated Person in any contract with the Corporation, any affiliate of the Corporation
or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement
or consulting agreement); (xi) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or
an amendment pursuant to Rule 13d-2(a) if such a statement were required to be filed under the Exchange Act and the rules and
regulations promulgated thereunder by such Proposing Shareholder or Shareholder Associated Person, if any; (xii) any other information
relating to such Proposing Shareholder or Shareholder Associated Person that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election
of Directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(xiii) any material interest of the Proposing Shareholder or Shareholder Associated Person on whose behalf the proposal is made in
such business; (xiv) a description of all agreements, arrangements and understandings between such Proposing Shareholder or such
Shareholder Associated Person and any other person or persons (including their names) in connection with the proposal of such business;
(xv) a representation that the Proposing Shareholder is a holder of record of capital stock of the Corporation, is entitled to vote
at such meeting and intends to appear, in person or by proxy, at the meeting to propose such business; and (xvi) a representation
as to whether the shareholder or such Shareholder Associated Person is or intends to be part of a group that intends (A) to deliver
a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required
to approve or adopt the proposal and/or (B) otherwise to solicit proxies from shareholders in support of such proposal.
(d) As
used in this Section 2.6, the following terms have the meanings indicated: (i) “Derivative Instrument” means an
option, warrant, convertible security, stock appreciation right, or other right with an exercise or conversion privilege or a settlement
payment or mechanism at a price related to the value of any class or series of shares of the Corporation or with a value derived in whole
or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right is subject to settlement
in the underlying class or series of shares of the Corporation or otherwise; and (ii) “Shareholder Associated Person”
of a Proposing Shareholder means (i) any person controlling, controlled by, under common control with, or acting in concert with,
the Proposing Shareholder, (ii) any beneficial owner of shares of the Corporation owned of record or beneficially by the Proposing
Shareholder, (iii) any entity of which the Proposing Shareholder is an employee, officer, member, partner, trustee, director or,
except for entities the shares of which are registered under the Exchange Act, a shareholder, and (iv) any person controlling, controlled
by or under common control with, the Shareholder Associated Person.
Article 3
QUORUM OF SHAREHOLDERS
Section 3.1 The
presence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled
to cast on the particular matter shall constitute a quorum for purposes of considering such matter, and unless otherwise provided by statute
the acts of such shareholders at a duly organized meeting shall be the acts of the shareholders. If, however, any meeting of shareholders
cannot be organized because of lack of a quorum, those present, in person or by proxy, shall have the power, except as otherwise provided
by statute, to adjourn the meeting to such time and place as they may determine, without notice other than an announcement at the meeting,
until the requisite number of shareholders for a quorum shall be present, in person or by proxy, except that in the case of any meeting
called for the election of directors such meeting may be adjourned only for periods not exceeding fifteen (15) days as the holders, present
in person or by proxy, of shares entitled to cast at least a majority of the votes which all shareholders are entitled to cast, shall
direct, and those who attend the second of such adjourned meetings, although less than a quorum, shall nevertheless constitute a quorum
for the purpose of electing directors. At any adjourned meeting at which a quorum shall be present or so represented, any business may
be transacted which might have been transacted at the original meeting if a quorum had been present. The shareholders present, in person
or by proxy, at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders
to leave less than a quorum.
Article 4
VOTING RIGHTS
Section 4.1 Except
as may be otherwise provided by statute or by the Articles of Incorporation of the Corporation (as amended from time to time, the “Articles
of Incorporation”), at every shareholders’ meeting, every shareholder entitled to vote thereat shall have the right to one
vote for every share having voting power standing in his name on the books of the Corporation on the record dated fixed for the meeting.
No share shall be voted at any meeting if any installment is due and unpaid thereon.
Section 4.2 When
a quorum is present at any meeting, the vote of the holders, present in person or by proxy, of shares entitled to cast at least a majority
of the votes which all shareholders are entitled to cast, shall decide any question brought before such meeting except as may be otherwise
provided by statute or by the Articles of Incorporation.
Section 4.3 Upon
demand made by a shareholder entitled to vote at any election for directors before the voting begins, the election shall be by ballot.
Article 5
PROXIES
Section 5.1 Every
shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his duly
authorized attorney-in-fact and filed with the Secretary of the Corporation. 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 unrevoked proxy shall be valid after eleven (11)
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 after three (3) 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 5.2 Any
shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white, which shall
be reserved for exclusive use by the Corporation.
Article 6
RECORD DATE
Section 6.1 The
Board of Directors may fix a time, not more than ninety (90) days prior to the date of any meeting of shareholders, or the date fixed
for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion or
exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of, and
to vote at, any such meeting, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or exchange of shares. In such case, only such shareholders
as shall be shareholders of record on the date so fixed shall be entitled to notice of, or to vote at, such meeting or to receive payment
of such dividend or to receive such allotment of rights or to exercise such rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Corporation after any record date fixed as aforesaid. The Board of Directors may close the books of the
Corporation against transfers of shares during the whole or any part of such period, and in such case written or printed notice thereof
shall be mailed at least ten (10) days before closing thereof to each shareholder of record at the address appearing on the records
of the Corporation or supplied by him to the Corporation for the purpose of notice. While the stock transfer books of the Corporation
are closed, no transfer of shares shall be made thereon. If no record date is fixed by the Board of Directors for the determination of
shareholders entitled to receive notice of, and vote at, a shareholders’ meeting, transferees of shares which are transferred on
the books of the Corporation within ten (10) days next preceding the date of such meeting shall not be entitled to notice of or to
vote at such meeting.
Article 7
VOTING LISTS
Section 7.1 The
officer or agent having charge of the transfer books for shares of the Corporation shall make, at least five (5) days before each
meeting of shareholders, a complete alphabetical list of the shareholders entitled to vote at the meeting, with their addresses and the
number of shares held by each, which list shall be kept on file at the registered office or principal place of business of the Corporation
and shall be subject to inspection by any shareholder during the entire meeting. The original transfer books for shares of the Corporation,
or a duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to who are the shareholders entitled to exercise the
rights of a shareholder.
Article 8
JUDGES OF ELECTION
Section 8.1 In
advance of any meeting of shareholders, the Board of Directors may appoint judges of election, who need not be shareholders, to act at
such meeting or any adjournment thereof. If judges of election are not so appointed, the Chairman of any such meeting may, and on the
request of any shareholder or his proxy shall, make such appointment at the meeting. The number of judges shall be one or three. If appointed
at a meeting on the request of one or more shareholders or proxies, the holders of shares, present in person or by proxy, entitled to
cast at least nine (9) votes which all shareholders are entitled to cast shall determine whether one (1) or three (3) judges
are to be appointed. No person who is a candidate for office shall act as a judge. The judges of election shall do all such acts as may
be proper to conduct the election or vote, and such other duties as may be prescribed by statute, with fairness to all shareholders, and
if requested by the Chairman of the meeting or any shareholder or his proxy, shall make a written report of any matter determined by them
and execute a certificate of any fact found by them. If there are three (3) judges of election, the decision, act or certificate
of a majority shall be the decision, act or certificate of all.
Article 9
PARTICIPATION IN MEETINGS BY ELECTRONIC MEANS
Section 9.1 The
presiding officer may permit, on such conditions as may be determined by him, one or more shareholders or proxyholders to participate
in a meeting of shareholders, count for the purposes of determining a quorum thereat and exercise all rights and privileges to which such
person or persons might be entitled were such person or persons, as the case may be, personally in attendance at such meeting (including
the right to vote or to consent to or dissent from any action) by means of conference telephone or other electronic means, including the
Internet. Unless the Board of Directors so permits by resolution or the presiding officer so permits, no person may participate in a meeting
of shareholders by means of a conference telephone or other electronic means, including the Internet.
Article 10
CONSENT OF SHAREHOLDERS IN LIEU OF MEETING
Section 10.1 Any
action required to be taken at a meeting of shareholders, or of a class of shareholders, may be taken without a meeting, if a consent
or consents in writing setting forth the action so taken shall be signed by all of the shareholders who would be entitled to vote at a
meeting for such purpose and shall be filed with the Secretary of the Corporation.
Article 11
DIRECTORS
Section 11.1
(a) Only
persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as Directors. For
purposes of this Section 11.1, a “nominee” shall include any person being considered to fill a vacancy on the Board of
Directors.
(b) Nominations
of persons who satisfy the eligibility requirements of subsection (d) of this Section 11.1 for the election of Directors may
be made by the Board of Directors, by a committee appointed by the Board of Directors with authority from the Board of Directors to do
so, or by any shareholder who complies with subsection (c) of this Section 11.1.
(c) Nominations
of persons who satisfy the eligibility requirements of subsection (d) of this Section 11.1 for the election of Directors may
be made by any person that (i) is a shareholder of record both at the time of giving of the notice provided for in this Section 11.1
and at the time of the annual meeting, (ii) is entitled to vote for the election of Directors at the annual meeting and (iii) complies
with the notice procedures set forth in this Section 11.1. Nomination for the election of Directors pursuant to this subsection (c) of
this Section 11.1 is the exclusive means for a shareholder to make nominations before a meeting of shareholders. For nominations
to be properly brought before a meeting of shareholders pursuant to subsection (c) of this Section 11.1, such nomination (other
than a nomination to fill a vacancy resulting from removal from office by a vote of the shareholders under Section 1726(a) of
the PBCL) may be made by a shareholder only if:
i. Advance
written notice of a proposed nomination by a shareholder setting forth the information required under subsection (e) of this Section 11.1
is delivered or mailed by certified mail to the Secretary in accordance with the time periods set forth in Section 2.6(b);
ii. Any
update or supplement to the notice delivered pursuant to Section 11.1(c)(i) above is delivered pursuant to the requirements
of subsections (f) and (g) of this Section 11.1;
iii. The
nominating shareholder has complied in all respects with the requirements of Section 14 of the Exchange Act, including without limitation,
the requirements of Rule 14a-19 (as such rule and regulations may be amended from time to time by the Commission, including
any Commission staff interpretation relating thereto); and
iv. The
Board of Directors or an executive officer designated thereby has determined that the shareholder has reasonably satisfied the requirements
of this Section 11.1.
(d) To
be eligible to be a nominee for election as a Director pursuant to this Section 11.1, the prospective nominee (whether nominated
by or at the direction of the Board of Directors or by a shareholder), or someone acting on such prospective nominee’s behalf, must
deliver (with respect to any nomination by a shareholder pursuant to this Section 11.1, in accordance with any applicable time periods
prescribed for delivery of notice under this Section 11.1) to the Secretary at the principal executive offices of the Corporation
a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity
on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request). Upon request,
the prospective nominee must also provide a written representation and agreement, in the form provided by the Secretary upon written request,
that such prospective nominee:
i. is
not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance
to, any person or entity as to how such prospective nominee, if elected as a director of the Corporation, will act or vote on any issue
or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that
could limit or interfere with such prospective nominee’s ability to comply, if elected as a director of the Corporation, with such
prospective nominee’s fiduciary duties under applicable laws;
ii. is
not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with
respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that
has not been disclosed therein; and
iii. would
be in compliance if elected as a director of the Corporation, and will comply with all applicable corporate governance, conflict of interest,
confidentiality and stock ownership and trading policies and guidelines of the Corporation.
(e) Any
shareholder who intends to nominate or to cause to have nominated any candidate for election to the Board of Directors (other than any
candidate proposed by the Corporation’s then existing Board of Directors) shall so notify the Secretary of the Corporation in accordance
with Section 2.6(b). Such notification, in addition to complying with the requirements of Sections 2.6(b) and 2.6(c), shall
contain the following information to the extent known by the notifying shareholder:
i. the
name and address of each proposed nominee;
ii. the
age of each proposed nominee;
iii. the
principal occupation of each proposed nominee;
iv. the
number of shares of the Corporation owned by each proposed nominee;
v. the
total number of shares, to the knowledge of the notifying shareholder, which will be voted for each proposed nominee;
vi. the
name and residence address of the notifying shareholder;
vii. the
number of shares of the Corporation owned by the notifying shareholder
viii. all
information relating to such person that would be required to be disclosed in solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act (including such person’s
written consent to (A) being named as a nominee in any proxy materials relating to the Corporation’s next annual meeting or
special meeting, as applicable, and (B) to serving as a Director if elected); and
ix. a
description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the
past three years, and any other material relationships, between or among such shareholder and beneficial owner on whose behalf the nomination
is being made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed
nominee, and such nominees’ respective affiliates and associates, or others acting in concert therewith, on the other hand, including
all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making
the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting
in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer
of such registrant.
(f) The
shareholder and any Shareholder Associated Person shall update and supplement the notice required by this Section 11.1 by giving
notice that the information provided or required to be provided in such notice shall be true and correct (1) as of the record date
for the meeting and (2) as of the date that is ten (10) business days prior to the meeting or any adjournment, postponement
or recess thereof. Such updates and supplements shall be delivered or mailed by certified mail to the Secretary and received at the principal
executive offices of the Corporation not later than five (5) business days after the record date for the meeting (in the case of
the update and supplement required to be made as of the record date), and (in the case of the update and supplement required to be made
as of ten (10) business days prior to the meeting or any adjournment, postponement or recess thereof) not later than five (5) business
days prior to the date for the meeting or, if practicable, any adjournment, postponement or recess thereof (and, if not practicable, on
the first practicable date prior to the date to which the meeting has been adjourned, postponed or recessed). No such supplement or update
may include any new nominees who were not named in the original notice of nomination or to be deemed to cure any defects or limit the
remedies (including without limitation under these Bylaws) available to the Corporation relating to any defect.
(g) In
addition, the shareholder making such nomination shall promptly provide any other information reasonably requested by the Corporation,
including information to determine (1) the eligibility of such proposed nominee to serve as an independent Director of the Corporation
or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee; (2) whether
the proposed nominee has any direct or indirect relationship with the Corporation other than those relationships that have been deemed
categorically immaterial pursuant to the Corporation’s corporate governance guidelines or its related party transaction policy;
(3) whether the proposed nominee would, by serving on the Board of Directors, violate or cause the Corporation to be in violation
of these Bylaws, the Articles of Incorporation, the rules and listing standards of the principal U.S. exchange upon which the common
stock of the Corporation is listed or any applicable law, rule or regulation, and (4) whether the proposed nominee is or has
been subject to any event specified in Item 401(f) of Regulation S-K (or successor rule) of the Commission.
(h) A
shareholder who has delivered a notice of nomination pursuant to this Section 11.1 shall promptly certify to the Corporation in writing
that it has complied with the requirements of Rule 14a-19 promulgated under the Exchange Act and deliver no later than five (5) business
days prior to the annual meeting or special meeting, as applicable, reasonable evidence that it has complied with such requirements.
(i) Notwithstanding
anything to the contrary in these Bylaws, unless otherwise required by law, if any shareholder (i) provides notice pursuant to Rule 14a-19
promulgated under the Exchange Act and (ii) subsequently (1) notifies the Corporation that such shareholder no longer intends
to solicit proxies in support of director nominees other than the Corporation’s director nominees in accordance with Rule 14a-19,
(2) fails to comply with the requirements of Rule 14a-19 or (3) fails to provide reasonable evidence sufficient to satisfy
the Corporation that such requirements have been met, such shareholder’s nomination(s) shall be deemed null and void and the
Corporation shall disregard any proxies or votes solicited for any nominee proposed by such shareholder.
(j) The
presiding officer may, if the facts warrant, determine that any proposed nomination was not properly brought before the annual meeting
in accordance with the provisions of this Section 11.1; and if the presiding officer shall so determine, the presiding officer shall
so declare to the meeting, and any such nomination not properly brought before the meeting shall not be considered. A shareholder proposing
a nomination for Director shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder
with respect to the matters set forth in this Section 11.1; provided, however, that any references in these Bylaws to the Exchange
Act or the rules promulgated thereunder are not intended to and shall not limit the applicable requirements pursuant to this Section 11.1.
(k) In
the event that the same person is nominated by more than one shareholder, if at least one nomination for such person complies with this
Section 11.1, the nomination shall be honored and all votes cast for such nominee shall be counted.
(l) Subject
to Rules 14a-8 and 14a-19 promulgated under the Exchange Act, nothing in these Bylaws shall be construed to permit any shareholder,
or give any shareholder the right to include or have disseminated or described in any proxy materials relating to the Corporation’s
next annual meeting or special meeting, as applicable, any nomination of a director or directors or any other business proposal.
Section 11.2 The
number of directors that shall constitute the whole Board of Directors shall be not less than five (5) nor more than twenty-five
(25). The Board of Directors shall be classified into three (3) classes, each class to be as nearly equal in number as possible and
each class to be elected for a term of three (3) years. The terms of the respective classes shall expire in successive years. Each
class shall be elected in a separate election. At each annual meeting of shareholders thereafter, successors to the class of directors
whose term shall then expire shall be elected to hold office for a term of three (3) years, so that the term of office of one class
of directors shall expire in each year. Within the foregoing limits, the Board of Directors may from time to time fix the number of directors
and their respective classifications. Except as otherwise provided in Section 11.5, no person may serve as a director after the age
of 73 years old.
Section 11.3
(a) At
the consummation of the merger (the “Effective Time”) of Penseco Financial Services Corporation (“Penseco”) with
and into the Corporation (the “Merger”), the total number of persons serving on the board of directors of the Corporation
shall be fourteen (14). Six (6) of the fourteen (14) persons to serve initially on the board of directors of the Corporation at the
Effective Time shall be selected by Peoples board of directors and eight (8) of the fourteen (14) persons shall be selected by the
Penseco board of directors from among the current directors of Peoples and Penseco, respectively, who, except for executive officers,
are independent directors, as provided in the NASDAQ Stock Market Marketplace Rules and who meet the eligibility requirements for
a director under the Corporation’s bylaws. The directors from each Peoples and Penseco shall be evenly distributed as close as possible
among the three (3) classes, A, B, and C, of the Corporation after the Effective Time with two (2) classes having five (5) directors
and one (1) class having four (4) directors each to serve until their successors are duly elected and qualified in accordance
with applicable law, the articles of incorporation, and the bylaws of the Corporation.
(b) For
three (3) years immediately after the Effective Time, unless the board of directors of the Corporation shall determine otherwise
upon the approval of at least 80% of the board of directors of the Corporation, director nominees shall be selected, or recommended for
the board of directors’ selection, by a nominating committee comprised solely of independent directors (the “Nominating Committee”),
and more particularly as follows. With respect to any directorship held by an incumbent Continuing Peoples Director whose term is expiring
at any such meeting, a subcommittee of the Nominations Committee comprised solely of Continuing Peoples Directors shall select, or recommend
for the board’s selection, a director nominee who, except for executive officers, is an independent director as provided in the
NASDAQ Stock Market Marketplace Rules and who meets the requirements for a director under the Corporation’s bylaws for election
or reelection to such directorship. A “Continuing Peoples Director” shall mean any member of the board of directors of the
Corporation who was a director of Peoples immediately prior to the Effective Time, or any other member of the board of directors of the
Corporation who was nominated in accordance with the preceding sentence. With respect to any directorship held by an incumbent Continuing
Penseco Director whose term is expiring at any such meeting, a subcommittee of the Nominations Committee comprised solely of Continuing
Penseco Directors shall select, or recommend for the board’s selection, a director nominee who, except for executive officers, is
an independent director as provided in the NASDAQ Stock Market Marketplace Rules and who meets the requirements for a director under
the Corporation’s bylaws above for election or reelection to such directorship. A “Continuing Penseco Director” shall
mean any member of the board of directors of the Surviving Corporation who was a director of Penseco immediately prior to the Effective
Time, or any other member of the board of directors of the Corporation who was nominated in accordance with the preceding sentence.
Section 11.4 The
Board of Directors may declare vacant the office of a director if he or she is declared of unsound mind by an order of court or convicted
of a felony or for any other proper cause or if, within thirty (30) days after notice of election, he or she does not accept such office
either in writing or by attending a meeting of the Board of Directors.
Section 11.5 All
Directors, upon reaching the mandatory retirement age of 73 years, shall be permitted to serve as a director for the remainder of their
term after which they shall no longer be eligible to serve as a director. Notwithstanding the foregoing, each director appointed to the
Corporation’s Board of Directors in connection with the Merger and Section 10.3 hereof shall be eligible to stand for election
to one additional three (3) year term, regardless of their age, unless the Board of Directors of the Corporation shall determine
otherwise upon the approval of 80% of the directors of the entire Board of Directors.
Article 12
VACANCIES ON BOARD OF DIRECTORS
Section 12.1 Except
as provided in Section 11.3 above, vacancies on the Board of Directors, including vacancies resulting from an increase in the number
of directors, shall be filled by a majority of the remaining members of the Board of Directors, though less than a quorum, and each person
so appointed shall be a director until the expiration of the term of office of the class of directors to which he was appointed.
Article 13
POWERS OF BOARD OF DIRECTORS
Section 13.1 The
business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required
to be exercised and done by the shareholders.
Section 13.2 The
Board of Directors shall have the power and authority to appoint an Executive Committee and such other committees as may be deemed necessary
by the Board of Directors for the efficient operation of the Corporation. The Executive Committee shall consist of the Chairman of the
Board, if any, the Vice Chairman of the Board, if any, the President and not less than one (1) nor more than three (3) other
directors (which other directors shall not be employees of the Corporation or any of its subsidiaries). The Executive Committee shall
meet at such time as may be fixed by the Board of Directors, or upon call of the Chairman of the Board or the President. A majority of
members of the Executive Committee shall constitute a quorum. The Executive Committee shall have and exercise the authority of the Board
of Directors in the intervals between the meetings of the Board of Directors as far as may be permitted by law.
Article 14
MEETINGS OF THE BOARD OF DIRECTORS
Section 14.1 An
organization meeting may be held immediately following the annual shareholders’ meeting without the necessity of notice to the directors
to constitute a legally convened meeting, or the directors may meet at such time and place as may be fixed by either a notice or waiver
of notice or consent signed by all of such directors.
Section 14.2 Regular
meetings of the Board of Directors shall be held not less often than semi-annually at a time and place determined by the Board of Directors
at the preceding meeting. One or more directors may participate in any meeting of the Board of Directors, or of any committee thereof,
by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can
hear one another.
Section 14.3 Special
meetings of the Board of Directors may be called by the Chairman of the Board or the President on one day’s notice to each director,
either personally or by mail, courier service, facsimile transmission, email or other electronic communication, or telephone; special
meetings shall be called by the Chairman of the Board or the President in like manner and on like notice upon the written request of three
(3) directors.
Section 14.4 At
all meetings of the Board of Directors, a majority of the directors shall constitute a quorum for the transaction of business, and the
acts of a majority of the directors present at a meeting in person or by conference telephone or similar communications equipment at which
a quorum is present in person or by such communications equipment shall be the acts of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Articles of Incorporation or by these Bylaws. If a quorum shall not be present in person or
by communications equipment at any meeting of the directors, the directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present or as permitted herein.
Article 15
INFORMAL ACTION BY THE BOARD OF DIRECTORS
Section 15.1 If
all the directors shall severally or collectively consent in writing, to any action to be taken by the Corporation, such action shall
be as valid corporate action as though it had been authorized at a meeting of the Board of Directors.
Article 16
COMPENSATION OF DIRECTORS
Section 16.1 Directors,
as such, may receive a stated salary for their services or a fixed sum and expenses for attendance at regular and special meetings, or
any combination of the foregoing as may be determined from time to time by resolution of the Board of Directors, and nothing contained
herein shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore.
Article 17
OFFICERS
Section 17.1 The
officers of the Corporation shall be elected by the Board of Directors at its organization meeting and shall be a President, a Secretary
and a Treasurer. At its option, the Board of Directors may elect a Chairman of the Board. The Board of Directors may also elect one or
more Vice Presidents and such other officers and appoint such agents as it shall deem necessary, who shall hold their offices for such
terms, have such authority and perform such duties as may from time to time be prescribed by the Board of Directors. Any two (2) or
more offices may be held by the same person.
Section 17.2 The
compensation of all officers of the Corporation shall be fixed by the Board of Directors.
Section 17.3 The
Board of Directors may remove any officer or agent elected or appointed, at any time and within the period, if any, for which such person
was elected or employed whenever in the Board of Directors’ judgment it is in the best interests of the Corporation, and all persons
shall be elected and employed subject to the provisions thereof. If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board of Directors.
Article 18
THE CHAIRMAN OF THE BOARD
Section 18.1 The
Chairman of the Board shall preside at all meetings of shareholders and directors. He shall supervise the carrying out of the policies
adopted or approved by the Board of Directors. He shall have general executive powers, as well as the specific powers conferred by these
Bylaws. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned to him
by the Board of Directors.
Article 19
THE PRESIDENT
Section 19.1 The
President shall be the chief executive officer of the Corporation. The President shall (a) have general and active management of
the business of the Corporation, (b) see that orders and resolutions of the Board of Directors are put into effect, subject, however,
to the right of the Board of Directors to delegate any specific powers, except such as may be by statue exclusively conferred on the president,
to any other officer or officers of the Corporation and (c) execute bonds, mortgages and other contracts requiring a seal under the
seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. In the absence
or incapacity of the Chairman of the Board, the President shall preside at meetings of the shareholders and directors. If there is no
Chairman of the Board, the President shall have and exercise all powers conferred by these Bylaws or otherwise on the Chairman of the
Board.
Article 20
THE VICE PRESIDENT
Section 20.1 The
Vice President or, if more than one, the Vice Presidents in the order established by the Board of Directors shall, in the absence or incapacity
of the President, exercise all powers and perform the duties of the President. The Vice Presidents, respectively, shall also have such
other authority and perform such other duties as may be provided in these Bylaws or as shall be determined by the Board of Directors or
the President. Any Vice President may, in the discretion of the Board of Directors, be designated as “executive,” “senior,”
or by departmental or functional classification.
Article 21
THE SECRETARY
Section 21.1 The
Secretary shall attend all meetings of the shareholders and directors and keep accurate records thereof in one or more minute books kept
for that purpose and shall perform the duties customarily performed by the secretary of a Corporation and such other duties as may be
assigned to the Secretary by the Board of Directors or the President.
Article 22
THE TREASURER
Section 22.1 The
Treasurer shall (a) have the custody of the corporate funds and securities, (b) keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation and (c) perform such other duties as may be assigned to him by the Board
of Directors or the President. He shall give bond in such sum and with such surety as the Board of Directors may from time to time direct.
Article 23
ASSISTANT OFFICERS
Section 23.1 Each
assistant officer shall assist in the performance of the duties of the officer to whom he is assistant and shall perform such duties in
the absence of the officer. He shall perform such additional duties as the Board of Directors, the President or the officer to whom he
is assistant may from time to time assign. Such officers may be given such functional titles as the Board of Directors shall from time
to time determine.
Article 24
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 24.1 The
Corporation shall indemnify, to the fullest extent permitted by Pennsylvania law and federal law, any director, officer and/or employee,
or any former director, officer and/or employee, who was or is a party to, or is threatened to be made a party to, or who is called to
be a witness in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director,
officer and /or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Section 24.2 The
Corporation shall indemnify, to the fullest extent permitted by Pennsylvania law and federal law, any director, officer and/or employee,
who was or is a party to, or is threatened by to be made a party to, or who is called as a witness in connection with any threatened,
pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that
such person is or was a director, officer and/or employee or agent of another Corporation, partnership, joint venture, trust or other
enterprise against amounts paid in settlement and expenses (including attorney’s fees) actually and reasonably incurred by him in
connection with the defense or settlement of, or serving as a witness in, such action or suit if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the Corporation and except that no indemnification shall be
made in respect of any such claim, issue or matter as to which such person shall have been adjudged to be liable for misconduct in the
performance of his duty to the Corporation.
Section 24.3 Except
as may be otherwise ordered by a court, there shall be a presumption that any director, officer and/or employee is entitled to indemnification
as provided in Sections 24.1 and 24.2 of this Article unless either a majority of the directors who are not involved in such proceedings
(“disinterested directors”) or, if there are less than three (3) disinterested directors, then the holders of one-third
of the outstanding shares of the Corporation determine that the person is not entitled to such presumption by certifying such determination
in writing to the Secretary of the Corporation. In such event the disinterested director(s) or, in the event of certification by
shareholders, the Secretary of the Corporation shall request of independent counsel, who may be the outside general counsel of the Corporation,
a written opinion as to whether or not the parties involved are entitled to indemnification under Sections 24.1 and 24.2 of this Article.
Section 24.4 Expenses
incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized in the manner provided under Section 24.3 of this Article upon receipt of an
undertaking by or on behalf of the director, officer and/or employee to repay such amount unless it shall ultimately be determined that
he is entitled to be indemnified by the Corporation as authorized in this Article.
Section 24.5 The
indemnification provided by this Article shall not be deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official
capacity while serving as a director, officer and/or employee and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer and/or employee and shall inure to the benefit of the heirs and personal
representatives of such a person.
Article 25
Reserved
Article 26
SHARE CERTIFICATES
Section 26.1 The
share certificates of the Corporation shall be numbered and registered in a share register as they are issued, shall bear the name of
the registered holder, the number and class of shares represented thereby, the par value of each share or a statement that such shares
are without par value, as the case may be, shall be signed by the President or a Vice President and the Secretary or the Treasurer or
any other person properly authorized by the Board of Directors; and shall bear the corporate seal, which seal may be a facsimile engraved
or printed. Where the certificate is signed by a transfer agent or a registrar, the signature of any corporate officer on such certificate
may be a facsimile, engraved or printed. In case any officer who has signed, or whose facsimile signature has been placed upon, any share
certificate shall have ceased to be such officer because of death, resignation or otherwise before the certificate is issued, it may be
issued by the Corporation with the same effect as if the officer had not ceased to be such at the date of its issue.
Section 26.2 Notwithstanding
anything herein to the contrary, any or all classes and series of shares, or any part thereof, may be represented by uncertificated shares
to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall
continue to be represented thereby until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance
or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates. The rights and obligations of the holders of shares represented by certificates and
the rights and obligations of the holders of uncertificated shares of the same class shall be identical. Notwithstanding anything herein
to the contrary, the provisions of Section 26.1 shall not apply to uncertificated shares and, in lieu thereof, the Board of Directors
shall adopt alternative procedures for registration of transfers.
Article 27
TRANSFER OF SHARES
Section 27.1 Upon
surrender to the Corporation of a share certificate duly endorsed by the person named in the certificate or by attorney duly appointed
in writing and accompanied where necessary by proper evidence of succession, assignment or authority to transfer, a new certificate shall
be issued to the person entitled thereto and the old certificate cancelled and the transfer recorded upon the share register of the Corporation.
No transfer shall be made if it would be inconsistent with the provisions of Article 8 of the Pennsylvania Uniform Commercial Code.
Article 28
LOST CERTIFICATES
Section 28.1 Where
a shareholder of the Corporation alleges the loss, theft or destruction of one or more certificates for shares of the Corporation and
requests the issuance of a substitute certificate therefore, the Board of Directors may direct a new certificate of the same tenor and
for the same number of shares to be issued to such person upon such person’s making of an affidavit in form satisfactory to the
Board of Directors setting forth the facts in connection therewith, provided that prior to the receipt of such request the Corporation
shall not have either registered a transfer of such certificate or received notice that such certificate has been acquired by a bona fide
purchaser. When authorizing such issue of a new certificate the Board of Directors may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his heirs or legal representatives, as the
case may be, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such form and with surety
or sureties, with fixed or open penalty, as shall be satisfactory to the Board of Directors, as indemnity for any liability or expense
which it may incur by reason of the original certificate remaining outstanding.
Article 29
DIVIDENDS
Section 29.1 The
Board of Directors may, from time to time, at any duly convened regular or special meeting or by unanimous consent in writing, declare
and pay dividends upon the outstanding shares of capital stock of the Corporation in cash, property or shares of the Corporation, as long
as any dividend shall not be in violation of law or the Articles of Incorporation.
Section 29.2 Before
payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the Board of Directors shall
believe to be for the best interests of the Corporation, and the Board of Directors may reduce or abolish any such reserve in the manner
in which it was created.
Article 30
FINANCIAL REPORT TO SHAREHOLDERS
Section 30.1 The
President and the Board of Directors shall present at each annual meeting of the shareholders a full and complete statement of the business
and affairs of the Corporation for the preceding year.
Article 31
INSTRUMENTS
Section 31.1 All
checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the President
or the Board of Directors may from time to time designate.
Section 31.2 All
agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions,
settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments and documents may be signed,
executed, acknowledged, verified, delivered or accepted, including those in connection with the fiduciary powers of the Corporation, on
behalf of the Corporation by the President or other persons as may be designated by him.
Article 32
VENUE
Section 32.1 Unless
the Corporation consents in writing to the selection of an alternate forum, the state courts of the Commonwealth of Pennsylvania in and
for Lackawanna County shall be the sole and exclusive forum, to the fullest extent permitted by law, for (i) any derivative action
or proceeding brought on behalf of the Corporation; (ii) any action asserting a claim of a breach of fiduciary duty owed by any director
or officer of the Corporation to the Corporation or the Corporation’s shareholders; (iii) any action asserting a claim against
the Corporation arising pursuant to any provision of the Business Corporation Law of the Commonwealth of Pennsylvania, the Articles of
Incorporation of the Corporation or these Bylaws; (iv) any action seeking to interpret, apply, enforce or determine the validity
of the Article of Incorporation or the Bylaws of the Corporation; or (v) any action asserting a claim against the Corporation
governed by the internal affairs doctrine.
Section 32.2 Unless
the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933,
as amended. Any person or entity purchasing or otherwise acquiring any interest in any securities of the Corporation shall be deemed to
have notice of and consented to this Section 32.2.
Article 33
FISCAL YEAR
Section 33.1 The
fiscal year of the Corporation shall be the calendar year.
Article 34
SEAL
Section 34.1 The
corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal,
Pennsylvania.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed in any manner reproduced.
Article 35
NOTICES AND WAIVERS THEREOF
Section 35.1 Whenever,
under the provisions of applicable law or of the Articles of Incorporation or of these Bylaws, written notice is required to be given
to any person, it may be given to such person either personally or by sending a copy thereof through the mail by first class or express
mail postage prepaid, or courier service, charges prepaid, facsimile transmission, email or other electronic communication, to his address
appearing on the books of the Corporation or supplied by him to the Corporation for the purpose of notice. If the notice is sent by mail
or courier service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or the
courier service for transmission to such person. If notice is sent by facsimile transmission, email or other electronic communication
it shall have been deemed to have been given to the person entitled thereto when sent. Such notice shall specify the place, day and hour
of the meeting and, in the case of a special meeting of shareholders, the general nature of the business to be transacted.
Section 35.2 Any
written notice required to be given to any person may be waived in writing signed by the person entitled to such notice whether before
or after the time stated therein. Attendance of any person entitled to notice whether in person or by proxy, at any meeting shall constitute
a waiver of notice of such meeting, except where any 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. Where written notice is required of any meeting, the waiver thereof
must specify the purpose only if it is for a special meeting of the shareholders.
Article 36
AMENDMENTS
Section 36.1 These
Bylaws may be altered, amended or repealed by (a) the affirmative vote of the shareholders entitled to cast at least seventy-five
percent (75%) of the votes which all shareholders are then entitled to cast at any regular or special meeting duly convened after notice
to the shareholders of that purpose or (b) by the affirmative vote of a majority of the members of the Board of Directors, except
Article 11 of these Bylaws which for three (3) years following the Effective Time require the affirmative vote of eighty percent
(80%) or more of the members of the Board of Directors, at any regular or special meeting thereof duly convened after notice to the directors
of that purpose, subject always to the power of the shareholders to change such action of the Board of Directors by the affirmative vote
of the shareholders entitled to cast at least seventy-five percent (75%) of the votes which all shareholders are then entitled to cast.
Exhibit 3.2
Section 11.3
(a) For
all purposes of this Section 11.3, unless specified otherwise, capitalized terms shall have the meanings ascribed to them in the Agreement
and Plan of Merger, dated as of September 27, 2023 (the “Merger Agreement”), by and between the Corporation and FNCB Bancorp,
Inc. (“FNCB”), as the same may be amended from time to time.
(b) The
Board of Directors has resolved that, effective as of the Effective Time, (i) Mr. William E. Aubrey, II shall continue to serve as Chairman
of the Board of Directors of the Corporation, and (ii) Mr. Louis A. DeNaples, Sr., shall become the Vice Chairman of the Board of Directors
of the Corporation.
(c) In accordance
with the provisions of Section 11.2 of these Bylaws, and effective as of the Effective Time, the Board of Directors of the Corporation
shall be comprised of sixteen (16) directors, of which eight (8) shall be members of the Board of Directors of the Corporation as of immediately
prior to the Effective Time, designated by the Corporation (the “Continuing PFIS Directors”), and eight (8) shall be members
of the Board of Directors of FNCB as of immediately prior to the Effective Time, designated by FNCB (the “Continuing FNCB Directors”).
Each director of the Corporation immediately after the Effective Time shall hold office until his or her successor is elected and qualified
or otherwise in accordance with the Articles of Incorporation and these Bylaws.
(d) This
Section 11.3 shall remain in effect until the date that is three (3) years after the Closing Date (the “Expiration Date”),
provided, however, that this Section 11.3 may be amended or waived by the approval of at least eighty percent
(80%) of the members of the Corporation’s Board of Directors then in office. In the event of any inconsistency between any provision
of this Section 11.3 and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions of
this Section 11.3 shall control.
(e) From
and after the Effective Time through the Expiration Date, no vacancy on the Board of Directors of the Corporation created by the cessation
of service of a director shall be filled by the applicable Board of Directors and the applicable Board of Directors shall not nominate
any individual to fill such vacancy, unless (x) in the case of a vacancy created by the cessation of service of a Continuing PFIS Director,
not less than a majority of the Continuing PFIS Directors have approved the appointment or nomination (as applicable) of the individual
appointed or nominated (as applicable) to fill such vacancy, in which case the Continuing FNCB Directors shall vote to approve the appointment
or nomination (as applicable) of such individual, and (y) in the case of a vacancy created by the cessation of service of a Continuing
FNCB Director, not less than a majority of the Continuing FNCB Directors have approved the appointment or nomination (as applicable)
of the individual appointed or nominated (as applicable) to fill such vacancy, in which case the Continuing PFIS Directors shall vote
to approve the appointment or nomination (as applicable) of such individual; provided, that any such appointment or nomination pursuant
to clause (x) or (y) shall be made in accordance with applicable Laws and the rules of the Nasdaq Stock Market (or other national securities
exchange on which the Corporation’s securities are listed). For purposes of this Section 11.3(e), the terms “Continuing
PFIS Directors” and “Continuing FNCB Directors” shall mean, respectively, the directors of the Corporation and FNCB
who were selected to be directors of the Corporation by the Corporation or FNCB, as the case may be, as of the Effective Time, pursuant
to Exhibit E of the Merger Agreement, and any directors of the Corporation who were subsequently appointed or nominated and elected to
fill a vacancy created by the cessation of service of a Continuing PFIS Director or a Continuing FNCB Director, as applicable, pursuant
to this Section 11.3(e) or the provisions of Exhibit E of the Merger Agreement, as applicable.
Section 11.5 All Directors, upon reaching the
mandatory retirement age of 73 years, shall be permitted to serve as a director for the remainder of their term after which they shall
no longer be eligible to serve as a director. Notwithstanding the foregoing, each director appointed to the Corporation’s Board
of Directors in connection with the merger contemplated by the Merger Agreement and Section 11.3 hereof who is age 73 or older at the
Effective Time, and each incumbent director at the Effective Time who will be age 73 or older at the expiration of his or her term in
effect on the date of the Merger Agreement, shall be eligible to stand for election to one additional three (3) year term, regardless
of their age, in each case, unless the Board of Directors of the Corporation shall determine otherwise upon the approval of 80% of the
directors of the entire Board of Directors.
Exhibit 3.3
BYLAWS OF
SECOND
AMENDED AND RESTATED BYLAWS OF
PEOPLES FINANCIAL SERVICES CORP.
AMENDED AND RESTATED (EFFECTIVE
NOVEMBER 30, 2013)
Amended
and Restated Effective October 27, 2023
Article 1
CORPORATION OFFICE
Section 1.1. The
Corporation shall have and continuously maintain in Pennsylvania a registered office which may, but need not, be the same as its place
of business and at an address to be designated from time to time by the Board of Directors.
Section 1.2. The
Corporation may also have offices at such other places as the Board of Directors may from time to time designate or the business of the
Corporation may require.
Article 2
SHAREHOLDERS’ MEETINGS
Section 2.1. All
meetings of the shareholders shall be held at such time and place as may be fixed from time to time by the Board of Directors.
; provided, however, if a meeting is held
by means of the Internet or other electronic communications technology in a fashion pursuant to which shareholders have the opportunity
to read or hear the proceedings substantially concurrently with their occurrence, vote on matters submitted to the shareholders and pose
questions to the directors, the meeting need not be held at a particular geographic location. If no place is so fixed for a meeting, it
shall be held at the Corporation’s then principal executive office.
Section 2.2. The
annual meeting of the shareholders shall be held no later than the thirtieth (30th) day of May in each year,
when they shall select a Board of Directors and transact such other business as may.
At an annual meeting of shareholders, only such business (other than elections of directors, which must be made in compliance with, and
shall be exclusively governed by, Section 11.1) shall be conducted as shall have been properly
be brought before the annual
meeting (i) pursuant to the Corporation’s notice of the meeting, on such date
and at such time as(ii) by or at the
direction of the Board of Directors shall determine. ,
(iii) by the chairman of the meeting, or (iv) by any shareholder of the Corporation who is a shareholder of record both at the
time of giving of the notice provided for in Section 2.6 and at the time of the annual meeting, who shall be entitled to vote at
such meeting and who shall have complied with the notice procedures set forth in Section 2.6. Clause (iv) in the immediately
preceding sentence shall be the exclusive means for a shareholder to submit such business (other than matters properly brought under Rule 14a-8
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and included in the Corporation’s notice
of meeting) before an annual meeting of shareholders.
Section 2.3. Special
meetings of the shareholders may be called at any time by only the
chairman of the Board, the President, a majority of the Board of Directors or of its Executive Committee. At any time, upon written request
of any person or persons who have duly called a special meeting, it shall be the duty of the secretary to fix the date of the meeting,
to be held not more than sixty (60) days after the receipt of the request and to give due notice thereof. If the secretary shall neglect
or refuse to fix the date of the meeting and give notice thereof, the person or persons calling the meeting may do so.
Section 2.4. Written
notice of all meetings, other than adjourned meetings of shareholders, stating the placeshall
set forth the place (or if held by means of the Internet or other electronic communications technology, the means of remote communications
by which shareholders and proxyholders may be deemed to be present in person and vote at such meeting),
date and hour (each, as determined in accordance with Section 2.1),
and, in case of special meetings of shareholders, the purpose thereof,general
nature of the business to be transacted in accordance with any requirements set forth in the Pennsylvania Business Corporation Law of
1988 (as amended from time to time, the “PBCL”). Each such notice shall be served upon,
or mailed, postage prepaid, or telegraphed, charges prepaid, at least ten (10) days
before such meeting, unless a greater period of notice is required by statute or by these Bylaws, to each shareholder entitled to vote
thereat at such address as appears on the transfer books of the Corporation. If
such notice is mailed, it shall be deemed to have been given to a shareholder when deposited in the United States mail, postage prepaid,
directed to the shareholder at the address of such shareholder as it appears on the record of shareholders of the Corporation or supplied
by such shareholder to the Corporation for the purpose of notice. Notice given by electronic transmission shall be deemed given (i) if
by facsimile, when directed to a number at which the shareholder has consented to receive such notice; (ii) if by electronic mail,
when directed to an electronic mail address at which the shareholder consented to receive such notice; (iii) if by posting on an
electronic network together with separate notice to the shareholder of such specific posting, upon the later of (A) such posting
and (B) giving of such separate notice; and (iv) if by any other form of electronic transmission, when directed to the shareholder.
No notice of any meeting of shareholders need be given to any shareholder who properly waives notice, whether before or after the meeting
and whether in writing or by electronic transmission or otherwise. Neither the business to be transacted at, nor the purpose of, any meeting
need be specified in a waiver of notice. The attendance, in person or by proxy, of any shareholder at any meeting of shareholders shall
constitute a proper waiver of notice of such meeting, except if the shareholder attends a meeting solely for the express purpose of objecting,
prior to or at the commencement of such meeting, to the transaction of any business on the ground that the meeting is not lawfully called
or convened.
Section 2.5. The
officer presiding over a shareholders’ meeting shall have any and all powers and authority necessary, in such officer’s sole
discretion, to conduct an orderly meeting, preserve order and determine any and all procedural matters. The officer presiding over a shareholders’
meeting may also establish such rules and regulations for the conduct of the meeting as such officer may deem to be reasonably necessary
or desirable for the orderly and expeditious conduct of the meeting, including the ability to impose reasonable limits on the amount of
time at the meeting taken up in remarks by any one shareholder or group of shareholders. In addition, until the business to be completed
at a meeting of shareholders is completed, the officer presiding over the shareholders’ meeting is expressly authorized to temporarily
adjourn and postpone the meeting from time to time subject to any limitations for adjournment specified elsewhere in these bBylaws.
. At every meeting of the shareholders,
the Chairman of the Board, or in his absence, one of the following persons present shall act as chairman in the order stated, shall preside:
any presiding officer designated by the Board of Directors, the President or the vice presidents in their order of earliest election to
that office; and the Secretary, or in his absence, a person appointed by the chairman, shall act as secretary.
Section 2.6.
(a) Except
as otherwise provided by law or in these bBylaws,
or except as permitted by the presiding officer of the meeting in the exercise of such officer’s sole discretion in any specific
instance, the business which shall be voted upon or discussed at any annual or special meeting of the shareholders shall (i) have
been specified in the written notice of the meeting (or any supplement thereto) given by the Corporation, (ii) be brought before
the meeting at the direction of the Board of Directors, or (iii) in the case of an annual meeting of shareholders, have been specified
in a written notice given to the Corporation by or on behalf of any shareholder who shall have been a shareholder of record on the record
date for such meeting and who shall continue to be entitled to vote thereat (the “Shareholder Notice”), in accordance with
all of the requirements set forth below.
(b) Each
Shareholder Notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation addressed to the
attention of the President or Secretary (i) in the case of an annual meeting that is called for a date that is within thirty (30)
days before or after the anniversary date of the immediately preceding annual meeting of shareholders, not less than sixty (60) days nor
more than ninety (90) days prior to such anniversary date, provided, that a proposal submitted by a shareholder for inclusion in the Corporation’s
proxy statement for an annual meeting which is appropriate for inclusion therein and otherwise complies with Securities
Exchange Act of 1934 Rule 14a-8
(including timeliness), or any successor rule, shall be deemed to have also been submitted timely pursuant to these by laws and (ii) in
the case of an annual meeting that is called for a date that is not within thirty (30) days before or after the anniversary date of the
immediately preceding annual meeting, or in the case of a special meeting, not later than the close of business on the fifth (5th) day
following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting date (which
shall include disclosure of the meeting date given to a national securities exchange or the Financial Industry Regulatory Authority) was
made. Each such Shareholder Notice must set forth (i) the name and address of the shareholder who intends to bring the business before
the meeting (“Proposing Shareholder”); (ii) the name and address of the beneficial
ownerany Shareholder Associated Person (as
defined below), if different than the Proposing Shareholder, or any of the shares of the Corporation
which are owned of record and beneficially by the Proposing Shareholder and the number which are owned beneficially by any beneficial
ownerShareholder Associated Person;
(iii) any interest (other than an interest solely as a shareholder) which the Proposing Shareholder or a beneficial
ownerShareholder Associated Person
has in the business being proposed by the Proposing Shareholder; (iv) a description of all agreements,
arrangements and understandings between the Proposing Shareholder and any beneficial ownerShareholder
Associated Person on the one hand and any other person or persons (naming such person or persons)
pursuant to which the proposal in the Shareholder Notice is being made on
the other hand, and a representation that the Proposing Shareholder will notify the Corporation in writing of any such agreement, arrangement
or understanding in effect as of the close of business on the record date for the meeting promptly, and in no event later than ten (10) days,
following the later of the record date or the date notice of the record date is first publicly disclosed; (v) a description
of the business which the Proposing Shareholder seeks to bring before the meeting, the reason for doing so and, if a specific action is
to be proposed, the text of the resolution or resolutions which the Proposing Shareholder proposes that the Corporation adopt;
and (vi) a representation that the Proposing Shareholder
is at the time of giving the Shareholder Notice, was or will be on the record date for the meeting, and will be on the meeting date a
holder of record of shares of the Corporation entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting
to bring the business specified in the Shareholder Notice before the meeting;
(vii) a representation that the Proposing Shareholder will notify the Corporation in writing of the number and class of shares owned
beneficially or of record by the Proposing Shareholder and any Shareholder Associated Person as of the close of business on the record
date for the meeting promptly, and in no event later than ten (10) days, following the later of the record date or the date notice
of the record date is first publicly disclosed; (viii) such other information regarding or each matter of business to be proposed
by such Proposing Shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities
and Exchange Commission (the “Commission”) had the matter been proposed, or intended to be proposed by the Board of Directors;
and (ix) the information required by Section 2.6(c), and a representation that the Proposing Shareholder will notify the Corporation
in writing of any changes in that information as of the close of business on the record date for the meeting promptly, and in no event
later than ten (10) days, following the later of the record date or the date notice of the record date is first publicly disclosed.
This Section 2.6 shall be the exclusive means for a Proposing Shareholder to submit other business (other than matters properly brought
under Rule 14a-8 under the Exchange Act, and included in the Corporation’s notice of meeting) before any shareholder meeting.
The presiding officer of the meeting may, in such officer’s sole discretion, refuse to acknowledge any business proposed by a shareholder
which the presiding officer determines is not made in compliance with the foregoing procedure. The
provisions of this Section 2.6 shall also govern what constitutes timely notice for purposes of Rule 14a-4(c) of the Exchange
Act.
(c) A
notice submitted by a Proposing Shareholder under this Section 2.6 must describe in reasonable detail, with respect to the Proposing
Shareholder and any Shareholder Associated Person: (i) any class or series and number of the Corporation’s securities, including
shares of the Corporation and Derivative Instruments (as defined below), directly or indirectly beneficially owned by the Proposing Shareholder
or a Shareholder Associated Person, or any other direct or indirect opportunity for the Proposing Shareholder or Shareholder Associated
Person to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation; (ii) any
interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which
the Proposing Shareholder or Shareholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest
in a general partner; (iii) any hedging or other transaction or series of transactions that has been entered into by or on behalf
of, or any other agreement, arrangement or understanding (including, without limitation, any put, short position or any borrowing or lending
of shares) that has been made by or on behalf of, a Proposing Shareholder or any Shareholder Associated Person, the effect or intent of
which is to mitigate loss to, or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, the
Proposing Shareholder or any Shareholder Associated Person with respect to any share of the Corporation; (iv) any proxy, contract,
arrangement, understanding, or relationship pursuant to which such Proposing Shareholder or Shareholder Associated Person has a right
to vote any shares of any class or series of the Corporation’s capital stock; (v) any short interest of such Proposing Shareholder
or Shareholder Associated Person in any security of the Corporation (for purposes of this Section 2.6(c), a person shall be deemed
to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (vi) any
rights to dividends on any securities of the Corporation owned beneficially by such Proposing Shareholder or Shareholder Associated Person
that are separated or separable from the underlying securities of the Corporation; (vii) any proportionate interest in shares of
any class or series of the Corporation’s capital stock or Derivative Instruments held, directly or indirectly, by a general or limited
partnership in which such Proposing Shareholder or Shareholder Associated Person is a general partner or, directly or indirectly, beneficially
owns an interest in a general partner; (viii) any performance-related fees (other than an asset-based fee) to which such Proposing
Shareholder or Shareholder Associated Person is entitled based on any increase or decrease in the value of securities of the Corporation
or Derivative Instruments as of the date of such notice, including any such interests held by members of the immediate family of such
Proposing Shareholder or Shareholder Associated Person sharing the same household (which information shall be supplemented by such Proposing
Shareholder and Shareholder Associated Person not later than ten (10) days after the record date for the meeting to disclose such
ownership as of the record date); (ix) any significant equity interests or any Derivative Instruments or short interests in any principal
competitor of the Corporation held by such Proposing Shareholder or Shareholder Associated Person; (x) any direct or indirect interest
of such Proposing Shareholder or any Shareholder Associated Person in any contract with the Corporation, any affiliate of the Corporation
or any principal competitor of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement
or consulting agreement); (xi) all information that would be required to be set forth in a Schedule 13D filed pursuant to Rule 13d-1(a) or
an amendment pursuant to Rule 13d-2(a) if such a statement were required to be filed under the Exchange Act and the rules and
regulations promulgated thereunder by such Proposing Shareholder or Shareholder Associated Person, if any; (xii) any other information
relating to such Proposing Shareholder or Shareholder Associated Person that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election
of Directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;
(xiii) any material interest of the Proposing Shareholder or Shareholder Associated Person on whose behalf the proposal is made in
such business; (xiv) a description of all agreements, arrangements and understandings between such Proposing Shareholder or such
Shareholder Associated Person and any other person or persons (including their names) in connection with the proposal of such business;
(xv) a representation that the Proposing Shareholder is a holder of record of capital stock of the Corporation, is entitled to vote
at such meeting and intends to appear, in person or by proxy, at the meeting to propose such business; and (xvi) a representation
as to whether the shareholder or such Shareholder Associated Person is or intends to be part of a group that intends (A) to deliver
a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required
to approve or adopt the proposal and/or (B) otherwise to solicit proxies from shareholders in support of such proposal.
(d) As
used in this Section 2.6, the following terms have the meanings indicated: (i) “Derivative Instrument” means an
option, warrant, convertible security, stock appreciation right, or other right with an exercise or conversion privilege or a settlement
payment or mechanism at a price related to the value of any class or series of shares of the Corporation or with a value derived in whole
or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right is subject to settlement
in the underlying class or series of shares of the Corporation or otherwise; and (ii) “Shareholder Associated Person”
of a Proposing Shareholder means (i) any person controlling, controlled by, under common control with, or acting in concert with,
the Proposing Shareholder, (ii) any beneficial owner of shares of the Corporation owned of record or beneficially by the Proposing
Shareholder, (iii) any entity of which the Proposing Shareholder is an employee, officer, member, partner, trustee, director or,
except for entities the shares of which are registered under the Exchange Act, a shareholder, and (iv) any person controlling, controlled
by or under common control with, the Shareholder Associated Person.
Article 3
QUORUM OF SHAREHOLDERS
Section 3.1. The
presence, in person or by proxy, of shareholders entitled to cast at least a majority of the votes which all shareholders are entitled
to cast on the particular matter shall constitute a quorum for purposes of considering such matter, and unless otherwise provided by statute
the acts of such shareholders at a duly organized meeting shall be the acts of the shareholders. If, however, any meeting of shareholders
cannot be organized because of lack of a quorum, those present, in person or by proxy, shall have the power, except as otherwise provided
by statute, to adjourn the meeting to such time and place as they may determine, without notice other than an announcement at the meeting,
until the requisite number of shareholders for a quorum shall be present, in person or by proxy, except that in the case of any meeting
called for the election of directors such meeting may be adjourned only for periods not exceeding fifteen (15) days as the holders, present
in person or by proxy, of shares entitled to cast at least a majority of the votes which all shareholders are entitled to cast, shall
direct, and those who attend the second of such adjourned meetings, although less than a quorum, shall nevertheless constitute a quorum
for the purpose of electing directors. At any adjourned meeting at which a quorum shall be present or so represented, any business may
be transacted which might have been transacted at the original meeting if a quorum had been present. The shareholders present, in person
or by proxy, at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders
to leave less than a quorum.
Article 4
VOTING RIGHTS
Section 4.1. Except
as may be otherwise provided by statute or by the Articles of Incorporation of
the Corporation (as amended from time to time, the “Articles of Incorporation”), at every shareholders’ meeting,
every shareholder entitled to vote thereat shall have the right to one vote for every share having voting power standing in his name on
the books of the Corporation on the record dated fixed for the meeting. No share shall be voted at any meeting if any installment is due
and unpaid thereon.
Section 4.2. When
a quorum is present at any meeting, the vote of the holders, present in person or by proxy, of shares entitled to cast at least a majority
of the votes which all shareholders are entitled to cast, shall decide any question brought before such meeting except as may be otherwise
provided by statute or by the Articles of Incorporation.
Section 4.3. Upon
demand made by a shareholder entitled to vote at any election for directors before the voting begins, the election shall be by ballot.
Article 5
PROXIES
Section 5.1. Every
shareholder entitled to vote at a meeting of shareholders or to express consent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for him by proxy. Every proxy shall be executed in writing by the shareholder or his duly
authorized attorney-in-fact and filed with the Secretary of the Corporation. 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 unrevoked proxy shall be valid after eleven (11)
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 after three (3) 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 5.2 Any
shareholder directly or indirectly soliciting proxies from other shareholders must use a proxy card color other than white, which shall
be reserved for exclusive use by the Corporation.
Article 6
RECORD DATE
Section 6.1. The
Board of Directors may fix a time, not more than ninety (90) days prior to the date of any meeting of shareholders, or the date fixed
for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion or
exchange of shares will be made or go into effect, as a record date for the determination of the shareholders entitled to notice of, and
to vote at, any such meeting, or entitled to receive payment of any such dividend or distribution, or to receive any such allotment of
rights, or to exercise the rights in respect to any such change, conversion or exchange of shares. In such case, only such shareholders
as shall be shareholders of record on the date so fixed shall be entitled to notice of, or to vote at, such meeting or to receive payment
of such dividend or to receive such allotment of rights or to exercise such rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Corporation after any record date fixed as aforesaid. The Board of Directors may close the books of the
Corporation against transfers of shares during the whole or any part of such period, and in such case written or printed notice thereof
shall be mailed at least ten (10) days before closing thereof
to each shareholder of record at the address appearing on the records of the Corporation or supplied by him to the Corporation for the
purpose of notice. While the stock transfer books of the Corporation are closed, no transfer of shares shall be made thereon. If no record
date is fixed by the Board of Directors for the determination of shareholders entitled to receive notice of, and vote at, a shareholders’
meeting, transferees of shares which are transferred on the books of the Corporation within ten (10) days next preceding the date
of such meeting shall not be entitled to notice of or to vote at such meeting.
Article 7
VOTING LISTS
Section 7.1. The
officer or agent having charge of the transfer books for shares of the Corporation shall make, at least five (5) days before each
meeting of shareholders, a complete alphabetical list of the shareholders entitled to vote at the meeting, with their addresses and the
number of shares held by each, which list shall be kept on file at the registered office or principal place of business of the Corporation
and shall be subject to inspection by any shareholder during the entire meeting. The original transfer books for shares of the Corporation,
or a duplicate thereof kept in this Commonwealth, shall be prima facie evidence as to who are the shareholders entitled to exercise the
rights of a shareholder.
Article 8
JUDGES OF ELECTION
Section 8.1. In
advance of any meeting of shareholders, the Board of Directors may appoint judges of election, who need not be shareholders, to act at
such meeting or any adjournment thereof. If judges of election are not so appointed, the Chairman of any such meeting may, and on the
request of any shareholder or his proxy shall, make such appointment at the meeting. The number of judges shall be one or three. If appointed
at a meeting on the request of one or more shareholders or proxies, the holders of shares, present in person or by proxy, entitled to
cast at least nine (9) votes which all shareholders are entitled to cast shall determine whether one (1) or three (3) judges
are to be appointed. No person who is a candidate for office shall act as a judge. The judges of election shall do all such acts as may
be proper to conduct the election or vote, and such other duties as may be prescribed by statute, with fairness to all shareholders, and
if requested by the Chairman of the meeting or any shareholder or his proxy, shall make a written report of any matter determined by them
and execute a certificate of any fact found by them. If there are three (3) judges of election, the decision, act or certificate
of a majority shall be the decision, act or certificate of all.
Article 9
PARTICIPATION IN MEETINGS BY ELECTRONIC MEANS
Section 9.1 The
presiding officer may permit, on such conditions as may be determined by him, one or more shareholders or proxyholders to participate
in a meeting of shareholders, count for the purposes of determining a quorum thereat and exercise all rights and privileges to which such
person or persons might be entitled were such person or persons, as the case may be, personally in attendance at such meeting (including
the right to vote or to consent to or dissent from any action) by means of conference telephone or other electronic means, including the
Internet. Unless the Board of Directors so permits by resolution or the presiding officer so permits, no person may participate in a meeting
of shareholders by means of a conference telephone or other electronic means, including the Internet.
Article 10
CONSENT OF SHAREHOLDERS IN LIEU OF MEETING
Section 9.1.
10.1 Any
action required to be taken at a meeting of shareholders, or of a class of shareholders, may be taken without a meeting, if a consent
or consents in writing setting forth the action so taken shall be signed by all of the shareholders who would be entitled to vote at a
meeting for such purpose and shall be filed with the Secretary of the Corporation.
ARTICLE 10
Article 11
DIRECTORS
Section 11.1
(a) Only
persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for election as Directors. For
purposes of this Section 11.1, a “nominee” shall include any person being considered to fill a vacancy on the Board of
Directors.
(b) Nominations
of persons who satisfy the eligibility requirements of subsection (d) of this Section 11.1 for the election of Directors may
be made by the Board of Directors, by a committee appointed by the Board of Directors with authority from the Board of Directors to do
so, or by any shareholder who complies with subsection (c) of this Section 11.1.
(c) Nominations
of persons who satisfy the eligibility requirements of subsection (d) of this Section 11.1 for the election of Directors may
be made by any person that (i) is a shareholder of record both at the time of giving of the notice provided for in this Section 11.1
and at the time of the annual meeting, (ii) is entitled to vote for the election of Directors at the annual meeting and (iii) complies
with the notice procedures set forth in this Section 11.1. Nomination for the election of Directors pursuant to this subsection (c) of
this Section 11.1 is the exclusive means for a shareholder to make nominations before a meeting of shareholders. For nominations
to be properly brought before a meeting of shareholders pursuant to subsection (c) of this Section 11.1, such nomination (other
than a nomination to fill a vacancy resulting from removal from office by a vote of the shareholders under Section 1726(a) of
the PBCL) may be made by a shareholder only if:
i. Advance
written notice of a proposed nomination by a shareholder setting forth the information required under subsection (e) of this Section 11.1
is delivered or mailed by certified mail to the Secretary in accordance with the time periods set forth in Section 2.6(b);
ii. Any
update or supplement to the notice delivered pursuant to Section 11.1(c)(i) above is delivered pursuant to the requirements
of subsections (f) and (g) of this Section 11.1;
iii. The
nominating shareholder has complied in all respects with the requirements of Section 14 of the Exchange Act, including without limitation,
the requirements of Rule 14a-19 (as such rule and regulations may be amended from time to time by the Commission, including
any Commission staff interpretation relating thereto); and
iv. The
Board of Directors or an executive officer designated thereby has determined that the shareholder has reasonably satisfied the requirements
of this Section 11.1.
(d) To
be eligible to be a nominee for election as a Director pursuant to this Section 11.1, the prospective nominee (whether nominated
by or at the direction of the Board of Directors or by a shareholder), or someone acting on such prospective nominee’s behalf, must
deliver (with respect to any nomination by a shareholder pursuant to this Section 11.1, in accordance with any applicable time periods
prescribed for delivery of notice under this Section 11.1) to the Secretary at the principal executive offices of the Corporation
a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity
on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request). Upon request,
the prospective nominee must also provide a written representation and agreement, in the form provided by the Secretary upon written request,
that such prospective nominee:
i. is
not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance
to, any person or entity as to how such prospective nominee, if elected as a director of the Corporation, will act or vote on any issue
or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that
could limit or interfere with such prospective nominee’s ability to comply, if elected as a director of the Corporation, with such
prospective nominee’s fiduciary duties under applicable laws;
ii. is
not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with
respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that
has not been disclosed therein; and
iii. would
be in compliance if elected as a director of the Corporation, and will comply with all applicable corporate governance, conflict of interest,
confidentiality and stock ownership and trading policies and guidelines of the Corporation.
Section 10.1.
(e) Any
shareholder who intends to nominate or to cause to have nominated any candidate for election to the Board of Directors (other than any
candidate proposed by the Corporation’s then existing Board of Directors) shall so notify the Secretary of the Corporation in accordance
with Section 2.6(b). Such notification, in addition to complying with the requirements of Sections
2.6(b) and 2.6(c), shall contain the following information to
the extent known by the notifying shareholder:
(a)i. the
name and address of each proposed nominee;
(b)ii. the
age of each proposed nominee;
(c)iii. the
principal occupation of each proposed nominee;
(d)iv. the
number of shares of the Corporation owned by each proposed nominee;
(e)v. the
total number of shares, to the knowledge of the notifying shareholder, which will be voted for each proposed nominee;
(f)vi. the
name and residence address of the notifying shareholder; and
(g)vii. the
number of shares of the Corporation owned by the notifying shareholder.
viii. all
information relating to such person that would be required to be disclosed in solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act (including such person’s
written consent to (A) being named as a nominee in any proxy materials relating to the Corporation’s next annual meeting or
special meeting, as applicable, and (B) to serving as a Director if elected); and
ix. a
description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the
past three years, and any other material relationships, between or among such shareholder and beneficial owner on whose behalf the nomination
is being made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed
nominee, and such nominees’ respective affiliates and associates, or others acting in concert therewith, on the other hand, including
all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the shareholder making
the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting
in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer
of such registrant.
(f) The
shareholder and any Shareholder Associated Person shall update and supplement the notice required by this Section 11.1 by giving
notice that the information provided or required to be provided in such notice shall be true and correct (1) as of the record date
for the meeting and (2) as of the date that is ten (10) business days prior to the meeting or any adjournment, postponement
or recess thereof. Such updates and supplements shall be delivered or mailed by certified mail to the Secretary and received at the principal
executive offices of the Corporation not later than five (5) business days after the record date for the meeting (in the case of
the update and supplement required to be made as of the record date), and (in the case of the update and supplement required to be made
as of ten (10) business days prior to the meeting or any adjournment, postponement or recess thereof) not later than five (5) business
days prior to the date for the meeting or, if practicable, any adjournment, postponement or recess thereof (and, if not practicable, on
the first practicable date prior to the date to which the meeting has been adjourned, postponed or recessed). No such supplement or update
may include any new nominees who were not named in the original notice of nomination or to be deemed to cure any defects or limit the
remedies (including without limitation under these Bylaws) available to the Corporation relating to any defect.
(g) In
addition, the shareholder making such nomination shall promptly provide any other information reasonably requested by the Corporation,
including information to determine (1) the eligibility of such proposed nominee to serve as an independent Director of the Corporation
or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee; (2) whether
the proposed nominee has any direct or indirect relationship with the Corporation other than those relationships that have been deemed
categorically immaterial pursuant to the Corporation’s corporate governance guidelines or its related party transaction policy;
(3) whether the proposed nominee would, by serving on the Board of Directors, violate or cause the Corporation to be in violation
of these Bylaws, the Articles of Incorporation, the rules and listing standards of the principal U.S. exchange upon which the common
stock of the Corporation is listed or any applicable law, rule or regulation, and (4) whether the proposed nominee is or has
been subject to any event specified in Item 401(f) of Regulation S-K (or successor rule) of the Commission.
(h) A
shareholder who has delivered a notice of nomination pursuant to this Section 11.1 shall promptly certify to the Corporation in writing
that it has complied with the requirements of Rule 14a-19 promulgated under the Exchange Act and deliver no later than five (5) business
days prior to the annual meeting or special meeting, as applicable, reasonable evidence that it has complied with such requirements.
(i) Notwithstanding
anything to the contrary in these Bylaws, unless otherwise required by law, if any shareholder (i) provides notice pursuant to Rule 14a-19
promulgated under the Exchange Act and (ii) subsequently (1) notifies the Corporation that such shareholder no longer intends
to solicit proxies in support of director nominees other than the Corporation’s director nominees in accordance with Rule 14a-19,
(2) fails to comply with the requirements of Rule 14a-19 or (3) fails to provide reasonable evidence sufficient to satisfy
the Corporation that such requirements have been met, such shareholder’s nomination(s) shall be deemed null and void and the
Corporation shall disregard any proxies or votes solicited for any nominee proposed by such shareholder.
(j) The
presiding officer may, if the facts warrant, determine that any proposed nomination was not properly brought before the annual meeting
in accordance with the provisions of this Section 11.1; and if the presiding officer shall so determine, the presiding officer shall
so declare to the meeting, and any such nomination not properly brought before the meeting shall not be considered. A shareholder proposing
a nomination for Director shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder
with respect to the matters set forth in this Section 11.1; provided, however, that any references in these Bylaws to the Exchange
Act or the rules promulgated thereunder are not intended to and shall not limit the applicable requirements pursuant to this Section 11.1.
Any nomination for director not made
in accordance with this section shall be disregarded by the chairman of the meeting, and votes cast for each such nominee shall be disregarded
by the judges of election. (k) In
the event that the same person is nominated by more than one shareholder, if at least one nomination for such person complies with this
Section 11.1, the nomination shall be honored and all votes cast
for such nominee shall be counted.
(l) Subject
to Rules 14a-8 and 14a-19 promulgated under the Exchange Act, nothing in these Bylaws shall be construed to permit any shareholder,
or give any shareholder the right to include or have disseminated or described in any proxy materials relating to the Corporation’s
next annual meeting or special meeting, as applicable, any nomination of a director or directors or any other business proposal.
Section 101.2. The
number of directors that shall constitute the whole Board of Directors shall be not less than five (5) nor more than twenty-five
(25). The Board of Directors shall be classified into three (3) classes, each class to be as nearly equal in number as possible and
each class to be elected for a term of three (3) years. The terms of the respective classes shall expire in successive years. Each
class shall be elected in a separate election. At each annual meeting of shareholders thereafter, successors to the class of directors
whose term shall then expire shall be elected to hold office for a term of three (3) years, so that the term of office of one class
of directors shall expire in each year. Within the foregoing limits, the Board of Directors may from time to time fix the number of directors
and their respective classifications. Except as otherwise provided in Section 10.611.5,
no person may serve as a director after the age of 73 years old.
Section 101.3.
(a) At the consummation of the merger (the
“Effective Time”) of Penseco Financial Services Corporation (“Penseco”) with and into the Corporation (the “Merger”),
the total number of persons serving on the board of directors of the Corporation shall be fourteen (14). Six (6) of the fourteen
(14) persons to serve initially on the board of directors of the Corporation at the Effective Time shall be selected by Peoples board
of directors and eight (8) of the fourteen (14) persons shall be selected by the Penseco board of directors from among the current
directors of Peoples and Penseco, respectively, who, except for executive officers, are independent directors, as provided in the NASDAQ
Stock Market Marketplace Rules and who meet the eligibility requirements for a director under the Corporations’s bylaws. The
directors from each Peoples and Penseco shall be evenly distributed as close as possible among the three (3) classes, A, B, and C,
of the Corporation after the Effective Time with two (2) classes having five (5) directors and one (1) class having four
(4) directors each to serve until their successors are duly elected and qualified in accordance with applicable law, the articles
of incorporation, and the bylaws of the Corporation.
(b) For three (3) years immediately after
the Effective Time, unless the board of directors of the Corporation shall determine otherwise upon the approval of at least 80% of the
board of directors of the Corporation, director nominees shall be selected, or recommended for the board of directors’ selection,
by a nominating committee comprised solely of independent directors (the “Nominating Committee”), and more particularly as
follows. With respect to any directorship held by an incumbent Continuing Peoples Director whose term is expiring at any such meeting,
a subcommittee of the Nominations Committee comprised solely of Continuing Peoples Directors shall select, or recommend for the board’s
selection, a director nominee who, except for executive officers, is an independent director as provided in the NASDAQ Stock Market Marketplace
Rules and who meets the requirements for a director under the Corporation’s bylaws for election or reelection to such directorship.
A “Continuing Peoples Director” shall mean any member of the board of directors of the Corporation who was a director of Peoples
immediately prior to the Effective Time, or any other member of the board of directors of the Corporation who was nominated in accordance
with the preceding sentence. With respect to any directorship held by an incumbent Continuing Penseco Director whose term is expiring
at any such meeting, a subcommittee of the Nominations Committee comprised solely of Continuing Penseco Directors shall select, or recommend
for the board’s selection, a director nominee who, except for executive officers, is an independent director as provided in the
NASDAQ Stock Market Marketplace Rules and who meets the requirements for a director under the Corporation’s bylaws above for
election or reelection to such directorship. A “Continuing Penseco Director” shall mean any member of the board of directors
of the Surviving Corporation who was a director of Penseco immediately prior to the Effective Time, or any other member of the board of
directors of the Corporation who was nominated in accordance with the preceding sentence.
Section 10.4 For three (3) years following
the Effective Time, directors formerly of Peoples and Penseco shall have prorata representation on all committees based upon the representative
number of directors of each party on the board of directors as of the Effective Time, unless the Board of Directors of the Corporation
shall determine otherwise upon the approval of 80% of the directors of the entire Board of Directors.
(a) For
all purposes of this Section 11.3, unless specified otherwise, capitalized terms shall have the meanings ascribed to them in the
Agreement and Plan of Merger, dated as of September 27, 2023 (the “Merger Agreement”), by and between the Corporation
and FNCB Bancorp, Inc. (“FNCB”), as the same may be amended from time to time.
(b) The
Board of Directors has resolved that, effective as of the Effective Time, (i) Mr. William E. Aubrey, II shall continue
to serve as Chairman of the Board of Directors of the Corporation, and (ii) Mr. Louis A. DeNaples, Sr., shall become the
Vice Chairman of the Board of Directors of the Corporation.
(c) In
accordance with the provisions of Section 11.2 of these Bylaws, and effective as of the Effective Time, the Board of Directors of
the Corporation shall be comprised of sixteen (16) directors, of which eight (8) shall be members of the Board of Directors of the
Corporation as of immediately prior to the Effective Time, designated by the Corporation (the “Continuing PFIS Directors”),
and eight (8) shall be members of the Board of Directors of FNCB as of immediately prior to the Effective Time, designated by FNCB
(the “Continuing FNCB Directors”). Each director of the Corporation immediately after the Effective Time shall hold office
until his or her successor is elected and qualified or otherwise in accordance with the Articles of Incorporation and these Bylaws.
(d) This
Section 11.3 shall remain in effect until the date that is three (3) years after the Closing Date (the “Expiration Date”),
provided, however, that this Section 11.3 may be amended or waived by the approval of at least eighty percent (80%)
of the members of the Corporation’s Board of Directors then in office. In the event of any inconsistency between any provision of
this Section 11.3 and any other provision of these Bylaws or the Corporation’s other constituent documents, the provisions
of this Section 11.3 shall control.
(e) From
and after the Effective Time through the Expiration Date, no vacancy on the Board of Directors of the Corporation created by the cessation
of service of a director shall be filled by the applicable Board of Directors and the applicable Board of Directors shall not nominate
any individual to fill such vacancy, unless (x) in the case of a vacancy created by the cessation of service of a Continuing PFIS
Director, not less than a majority of the Continuing PFIS Directors have approved the appointment or nomination (as applicable) of the
individual appointed or nominated (as applicable) to fill such vacancy, in which case the Continuing FNCB Directors shall vote to approve
the appointment or nomination (as applicable) of such individual, and (y) in the case of a vacancy created by the cessation of service
of a Continuing FNCB Director, not less than a majority of the Continuing FNCB Directors have approved the appointment or nomination (as
applicable) of the individual appointed or nominated (as applicable) to fill such vacancy, in which case the Continuing PFIS Directors
shall vote to approve the appointment or nomination (as applicable) of such individual; provided, that any such appointment or nomination
pursuant to clause (x) or (y) shall be made in accordance with applicable Laws and the rules of the Nasdaq Stock Market
(or other national securities exchange on which the Corporation’s securities are listed). For purposes of this Section 11.3(e),
the terms “Continuing PFIS Directors” and “Continuing FNCB Directors” shall mean, respectively, the directors
of the Corporation and FNCB who were selected to be directors of the Corporation by the Corporation or FNCB, as the case may be, as of
the Effective Time, pursuant to Exhibit E of the Merger Agreement, and any directors of the Corporation who were subsequently appointed
or nominated and elected to fill a vacancy created by the cessation of service of a Continuing PFIS Director or a Continuing FNCB Director,
as applicable, pursuant to this Section 11.3(e) or the provisions of Exhibit E of the Merger Agreement, as applicable.
Section 10.5
11.4 The
Board of Directors may declare vacant the office of a director if he or she is declared of unsound mind by an order of court or convicted
of a felony or for any other proper cause or if, within thirty (30) days after notice of election, he or she does not accept such office
either in writing or by attending a meeting of the Board of Directors.
Section 10.6
11.5 All
Directors, upon reaching the mandatory retirement age of 73 years, shall be permitted to serve as a director for the remainder of their
term after which they shall no longer be eligible to serve as a director. Notwithstanding the foregoing, each director appointed to the
Corporation’s Board of Directors in connection with the merger contemplated
by the Merger Agreement and Section 101.3
hereof who is age 73 or older at the Effective Time, and each incumbent director
at the Effective Time who will be age 73 or older at the expiration of his or her term in effect on the date of the Merger Agreement,
shall be eligible to stand for election to one additional three (3) year term, regardless of their age, in
each case, unless the Board of Directors of the Corporation shall determine otherwise upon the approval of 80% of the directors
of the entire Board of Directors.
ARTICLE 11
Article 12
VACANCIES ON BOARD OF DIRECTORS
ArticleSection 112.1. Except
as provided in Section 101.3
above, vacancies on the Board of Directors, including vacancies resulting from an increase in the number of directors, shall be filled
by a majority of the remaining members of the Board of Directors, though less than a quorum, and each person so appointed shall be a director
until the expiration of the term of office of the class of directors to which he was appointed.
ARTICLE 12
Article 13
POWERS OF BOARD OF DIRECTORS
Section 123.1. The
business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation
and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required
to be exercised and done by the shareholders.
Section 123.2. The
Board of Directors shall have the power and authority to appoint an Executive Committee and such other committees as may be deemed necessary
by the Board of Directors for the efficient operation of the Corporation. The Executive Committee shall consist of the Chairman of the
Board, if any, the Vice Chairman of the Board, if any, the President and not less than one (1) nor more than three (3) other
directors (which other directors shall not be employees of the Corporation or any of its subsidiaries). The Executive Committee shall
meet at such time as may be fixed by the Board of Directors, or upon call of the Chairman of the Board or the President. A majority of
members of the Executive Committee shall constitute a quorum. The Executive Committee shall have and exercise the authority of the Board
of Directors in the intervals between the meetings of the Board of Directors as far as may be permitted by law. The
Committees of the Board of Directors of the Corporation and their respective responsibilities shall be as set forth on Exhibit A
hereto.
ARTICLE 13
Article 14
MEETINGS OF THE BOARD OF DIRECTORS
Section 134.1. An
organization meeting may be held immediately following the annual shareholders’ meeting without the necessity of notice to the directors
to constitute a legally convened meeting, or the directors may meet at such time and place as may be fixed by either a notice or waiver
of notice or consent signed by all of such directors.
Section 134.2. Regular
meetings of the Board of Directors shall be held not less often than semi-annually at a time and place determined by the Board of Directors
at the preceding meeting. One or more directors may participate in any meeting of the Board of Directors, or of any committee thereof,
by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can
hear one another.
Section 134.3. Special
meetings of the Board of Directors may be called by the Chairman of the Board or the President on one day’s notice to each director,
either personally or by mail, courier service, facsimile transmission, email or other electronic communication, or telephone; special
meetings shall be called by the Chairman of the Board or the President in like manner and on like notice upon the written request of three
(3) directors.
Section 134.4. At
all meetings of the Board of Directors, a majority of the directors shall constitute a quorum for the transaction of business, and the
acts of a majority of the directors present at a meeting in person or by conference telephone or similar communications equipment at which
a quorum is present in person or by such communications equipment shall be the acts of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Articles of Incorporation or by these bBylaws.
If a quorum shall not be present in person or by communications equipment at any meeting of the directors, the directors present may adjourn
the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or as permitted
herein.
ARTICLE 14
Article 15
INFORMAL ACTION BY THE BOARD OF DIRECTORS
Section 145.1. If
all the directors shall severally or collectively consent in writing, to any action to be taken by the Corporation, such action shall
be as valid corporate action as though it had been authorized at a meeting of the Board of Directors.
ARTICLE 15
Article 16
COMPENSATION OF DIRECTORS
Section 156.1. Directors,
as such, may receive a stated salary for their services or a fixed sum and expenses for attendance at regular and special meetings, or
any combination of the foregoing as may be determined from time to time by resolution of the Board of Directors, and nothing contained
herein shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefore.
ARTICLE 16
Article 17
OFFICERS
Section 167.1. The
officers of the Corporation shall be elected by the Board of Directors at its organization meeting and shall be a President, a Secretary
and a Treasurer. At its option, the Board of Directors may elect a Chairman of the Board. The Board of Directors may also elect one or
more Vice Presidents and such other officers and appoint such agents as it shall deem necessary, who shall hold their offices for such
terms, have such authority and perform such duties as may from time to time be prescribed by the Board of Directors. Any two (2) or
more offices may be held by the same person.
Section 167.2. The
compensation of all officers of the Corporation shall be fixed by the Board of Directors.
Section 167.3. The
Board of Directors may remove any officer or agent elected or appointed, at any time and within the period, if any, for which such person
was elected or employed whenever in the Board of Directors’ judgment it is in the best interests of the Corporation, and all persons
shall be elected and employed subject to the provisions thereof. If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board of Directors.
ARTICLE 17
Article 18
THE CHAIRMAN OF THE BOARD
Section 178.1. The
Chairman of the Board shall preside at all meetings of shareholders and directors. He shall supervise the carrying out of the policies
adopted or approved by the Board of Directors. He shall have general executive powers, as well as the specific powers conferred by these
bBylaws.
He shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned to him by the
Board of Directors.
ARTICLE 18
Article 19
THE PRESIDENT
Section 189.1. The
President shall be the chief executive officer of the Corporation. The President shall (a) have general and active management of
the business of the Corporation, (b) see that orders and resolutions of the Board of Directors are put into effect, subject, however,
to the right of the Board of Directors to delegate any specific powers, except such as may be by statue exclusively conferred on the president,
to any other officer or officers of the Corporation and (c) execute bonds, mortgages and other contracts requiring a seal under the
seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. In the absence
or incapacity of the Chairman of the Board, the President shall preside at meetings of the shareholders and directors. If there is no
Chairman of the Board, the President shall have and exercise all powers conferred by these bBylaws
or otherwise on the Chairman of the Board.
ARTICLE 19
Article 20
THE VICE PRESIDENT
Section 19.1.
20.1 The
Vice President or, if more than one, the Vice Presidents in the order established by the Board of Directors shall, in the absence or incapacity
of the President, exercise all powers and perform the duties of the President. The Vice Presidents, respectively, shall also have such
other authority and perform such other duties as may be provided in these bBylaws
or as shall be determined by the Board of Directors or the President. Any Vice President may, in the discretion of the Board of Directors,
be designated as “executive,” “senior,” or by departmental or functional classification.
ARTICLE 20
Article 21
THE SECRETARY
Section 201.1. The
Secretary shall attend all meetings of the shareholders and directors and keep accurate records thereof in one or more minute books kept
for that purpose and shall perform the duties customarily performed by the secretary of a Corporation and such other duties as may be
assigned to the Secretary by the Board of Directors or the President.
ARTICLE 21
Article 22
THE TREASURER
Section 212.1. The
Treasurer shall (a) have the custody of the corporate funds and securities, (b) keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation and (c) perform such other duties as may be assigned to him by the Board
of Directors or the President. He shall give bond in such sum and with such surety as the Board of Directors may from time to time direct.
ARTICLE 22
Article 23
ASSISTANT OFFICERS
Section 223.1. Each
assistant officer shall assist in the performance of the duties of the officer to whom he is assistant and shall perform such duties in
the absence of the officer. He shall perform such additional duties as the Board of Directors, the President or the officer to whom he
is assistant may from time to time assign. Such officers may be given such functional titles as the Board of Directors shall from time
to time determine.
ARTICLE 23
Article 24
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 234.1 The
Corporation shall indemnify, to the fullest extent permitted by Pennsylvania law and federal law, any director, officer and/or employee,
or any former director, officer and/or employee, who was or is a party to, or is threatened to be made a party to, or who is called to
be a witness in connection with, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person is or was a director,
officer and /or employee of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or
agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney’s fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not of
itself create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed
to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
Section 234.2 The
Corporation shall indemnify, to the fullest extent permitted by Pennsylvania law and federal law, any director, officer and/or employee,
who was or is a party to, or is threatened by to be made a party to, or who is called as a witness in connection with any threatened,
pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that
such person is or was a director, officer and/or employee or agent of another Corporation, partnership, joint venture, trust or other
enterprise against amounts paid in settlement and expenses (including attorney’s fees) actually and reasonably incurred by him in
connection with the defense or settlement of, or serving as a witness in, such action or suit if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the Corporation and except that no indemnification shall be
made in respect of any such claim, issue or matter as to which such person shall have been adjudged to be liable for misconduct in the
performance of his duty to the Corporation.
Section 234.3 Except
as may be otherwise ordered by a court, there shall be a presumption that any director, officer and/or employee is entitled to indemnification
as provided in Sections 234.1
and 234.2
of this Article unless either a majority of the directors who are not involved in such proceedings (“disinterested directors”)
or, if there are less than three (3) disinterested directors, then the holders of one-third of the outstanding shares of the Corporation
determine that the person is not entitled to such presumption by certifying such determination in writing to the Secretary of the Corporation.
In such event the disinterested director(s) or, in the event of certification by shareholders, the Secretary of the Corporation shall
request of independent counsel, who may be the outside general counsel of the Corporation, a written opinion as to whether or not the
parties involved are entitled to indemnification under Sections 234.1
and 234.2
of this Article.
Section 234.4 Expenses
incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding as authorized in the manner provided under Section 234.3
of this Article upon receipt of an undertaking by or on behalf of the director, officer and/or employee to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article.
Section 234.5 The
indemnification provided by this Article shall not be deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official
capacity while serving as a director, officer and/or employee and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer and/or employee and shall inure to the benefit of the heirs and personal
representatives of such a person.
Article 25
Reserved
ARTICLE 24
Article 26
SHARE CERTIFICATES
Section 246.1. The
share certificates of the Corporation shall be numbered and registered in a share register as they are issued, shall bear the name of
the registered holder, the number and class of shares represented thereby, the par value of each share or a statement that such shares
are without par value, as the case may be, shall be signed by the President or a Vice President and the Secretary or the Treasurer or
any other person properly authorized by the Board of Directors; and shall bear the corporate seal, which seal may be a facsimile engraved
or printed. Where the certificate is signed by a transfer agent or a registrar, the signature of any corporate officer on such certificate
may be a facsimile, engraved or printed. In case any officer who has signed, or whose facsimile signature has been placed upon, any share
certificate shall have ceased to be such officer because of death, resignation or otherwise before the certificate is issued, it may be
issued by the Corporation with the same effect as if the officer had not ceased to be such at the date of its issue.
Section 246.2 Notwithstanding
anything herein to the contrary, any or all classes and series of shares, or any part thereof, may be represented by uncertificated shares
to the extent determined by the Board of Directors, except that shares represented by a certificate that is issued and outstanding shall
continue to be represented thereby until the certificate is surrendered to the Corporation. Within a reasonable time after the issuance
or transfer of uncertificated shares, the Corporation shall send to the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates. The rights and obligations of the holders of shares represented by certificates and
the rights and obligations of the holders of uncertificated shares of the same class shall be identical. Notwithstanding anything herein
to the contrary, the provisions of Section 246.1
shall not apply to uncertificated shares and, in lieu thereof, the Board of Directors shall adopt alternative procedures for registration
of transfers.
ARTICLE 25
Article 27
TRANSFER OF SHARES
Section 257.1. Upon
surrender to the Corporation of a share certificate duly endorsed by the person named in the certificate or by attorney duly appointed
in writing and accompanied where necessary by proper evidence of succession, assignment or authority to transfer, a new certificate shall
be issued to the person entitled thereto and the old certificate cancelled and the transfer recorded upon the share register of the Corporation.
No transfer shall be made if it would be inconsistent with the provisions of Article 8 of the Pennsylvania Uniform Commercial Code.
ARTICLE 26
Article 28
LOST CERTIFICATES
Section 268.1. Where
a shareholder of the Corporation alleges the loss, theft or destruction of one or more certificates for shares of the Corporation and
requests the issuance of a substitute certificate therefore, the Board of Directors may direct a new certificate of the same tenor and
for the same number of shares to be issued to such person upon such person’s making of an affidavit in form satisfactory to the
Board of Directors setting forth the facts in connection therewith, provided that prior to the receipt of such request the Corporation
shall not have either registered a transfer of such certificate or received notice that such certificate has been acquired by a bona fide
purchaser. When authorizing such issue of a new certificate the Board of Directors may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his heirs or legal representatives, as the
case may be, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such form and with surety
or sureties, with fixed or open penalty, as shall be satisfactory to the Board of Directors, as indemnity for any liability or expense
which it may incur by reason of the original certificate remaining outstanding.
ARTICLE 27
Article 29
DIVIDENDS
Section 279.1. The
Board of Directors may, from time to time, at any duly convened regular or special meeting or by unanimous consent in writing, declare
and pay dividends upon the outstanding shares of capital stock of the Corporation in cash, property or shares of the Corporation, as long
as any dividend shall not be in violation of law or the Articles of Incorporation.
Section 279.2. Before
payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the Board of Directors shall
believe to be for the best interests of the Corporation, and the Board of Directors may reduce or abolish any such reserve in the manner
in which it was created.
ARTICLE 28
Article 30
FINANCIAL REPORT TO SHAREHOLDERS
Section 28.1.
30.1 The
President and the Board of Directors shall present at each annual meeting of the shareholders a full and complete statement of the business
and affairs of the Corporation for the preceding year.
ARTICLE 29
Article 31
INSTRUMENTS
Section 29.1.
31.1 All
checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the President
or the Board of Directors may from time to time designate.
Section 29.2.
31.2 All
agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions,
settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments and documents may be signed,
executed, acknowledged, verified, delivered or accepted, including those in connection with the fiduciary powers of the Corporation, on
behalf of the Corporation by the President or other persons as may be designated by him.
Article 32
VENUE
Section 32.1 Unless
the Corporation consents in writing to the selection of an alternate forum, the state courts of the Commonwealth of Pennsylvania in and
for Lackawanna County shall be the sole and exclusive forum, to the fullest extent permitted by law, for (i) any derivative action
or proceeding brought on behalf of the Corporation; (ii) any action asserting a claim of a breach of fiduciary duty owed by any director
or officer of the Corporation to the Corporation or the Corporation’s shareholders; (iii) any action asserting a claim against
the Corporation arising pursuant to any provision of the Business Corporation Law of the Commonwealth of Pennsylvania, the Articles of
Incorporation of the Corporation or these Bylaws; (iv) any action seeking to interpret, apply, enforce or determine the validity
of the Article of Incorporation or the Bylaws of the Corporation; or (v) any action asserting a claim against the Corporation
governed by the internal affairs doctrine.
Section 32.2 Unless
the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America
shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933,
as amended. Any person or entity purchasing or otherwise acquiring any interest in any securities of the Corporation shall be deemed to
have notice of and consented to this Section 32.2.
ARTICLE 30
Article 33
FISCAL YEAR
Section 303.1. The
fiscal year of the Corporation shall be the calendar year.
ARTICLE 31
Article 34
SEAL
Section 314.1. The
corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal,
Pennsylvania.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed in any manner reproduced.
ARTICLE 32
Article 35
NOTICES AND WAIVERS THEREOF
Section 325.1. Whenever,
under the provisions of applicable law or of the Articles of Incorporation or of these bBylaws,
written notice is required to be given to any person, it may be given to such person either personally or by sending a copy thereof through
the mail by first class or express mail postage prepaid, or courier service, charges prepaid, facsimile transmission, email or other electronic
communication, to his address appearing on the books of the Corporation or supplied by him to the Corporation for the purpose of notice.
If the notice is sent by mail or courier service, it shall be deemed to have been given to the person entitled thereto when deposited
in the United States mail or the courier service for transmission to such person. If notice is sent by facsimile transmission, email or
other electronic communication it shall have been deemed to have been given to the person entitled thereto when sent. Such notice shall
specify the place, day and hour of the meeting and, in the case of a special meeting of shareholders, the general nature of the business
to be transacted.
Section 325.2. Any
written notice required to be given to any person may be waived in writing signed by the person entitled to such notice whether before
or after the time stated therein. Attendance of any person entitled to notice whether in person or by proxy, at any meeting shall constitute
a waiver of notice of such meeting, except where any 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. Where written notice is required of any meeting, the waiver thereof
must specify the purpose only if it is for a special meeting of the shareholders.
ARTICLE 33
Article 36
AMENDMENTS
Section 336.1. These
bBylaws
may be altered, amended or repealed by (a) the affirmative vote of the shareholders entitled to cast at least seventy-five percent
(75%) of the votes which all shareholders are then entitled to cast at any regular or special meeting duly convened after notice to the
shareholders of that purpose or (b) by the affirmative vote of a majority of the members of the Board of Directors, except Article 1011
of these bBylaws
which for three (3) years following the Effective Time require the affirmative vote of eighty percent (80%) or more of the members
of the Board of Directors, at any regular or special meeting thereof duly convened after notice to the directors of that purpose, subject
always to the power of the shareholders to change such action of the Board of Directors by the affirmative vote of the shareholders entitled
to cast at least seventy-five percent (75%) of the votes which all shareholders are then entitled to cast.
EXHIBIT A
COMMITTEES OF THE BOARD
(Unless otherwise specifically
indicated, Committees are concurrent committees of Peoples Financial Services Corp. and Peoples Neighborhood Bank)
Executive Committee The
Executive Committee shall consist of the Board Chairman, if any, the Vice Chairman, if any, and President plus not less than one, but
no more than three (3), other directors. The Executive Committee will meet on an as necessary basis and may exercise the authority of
the Board to the extent permitted by law during intervals between meetings of the Board. This committee may also be assigned other duties
by the Bank’s Board.
Compensation Committee See
Compensation Committee Charter.
Audit Compliance Committee
See Audit Committee Charter.
Nominating and Governance Committee
See Nominating and Governance Committee Charter.
Asset/Liability Committee
The primary objectives of the Asset/Liability management process include: optimize earnings and return on assets and equity within
acceptable and controllable levels; provide for growth that is sound, profitable and balanced without sacrificing the quality of service;
and manage and maintain policy and procedures that are consistent with the short and long term strategic goals of the Board of Directors.
To this end, the Asset/Liability Committee is responsible for risk management within the following key areas; interest rate; price; liquidity;
investment/credit; and budget. The committee meets monthly and consists of the Board of Directors and key bank officers.
Human Resources and Marketing Committee
The Human Resources and Marketing Committee of the Bank is responsible for sound human resources management and training e.g.,
in employment, compensation, and performance appraisal. This committee is also responsible for evaluation, planning and supervision of
the marketing and advertising of the Bank’s products and services, and also oversees community involvement and other public relations
activities. The Human Resources and Marketing Committees meet on a quarterly basis with the Human Resources and Marketing managers and
other executive officers.
Loan Administration Committee
The Loan Administration Committee of the Bank assists the Bank’s Board of Directors in discharging its responsibility for
the lending activities of the Bank by reviewing loans, lines of credits, floor plans, customers, financial statements, and by monitoring
loan review and compliance. The Loan Administration Committee recommends lending authorizations and is responsible for assuring that the
Bank’s loan activities are carried out in accordance with loan policies. This committee is also responsible for insuring the adequacy
of the Bank’s loan loss reserve. The Loan Administration Committee meets with the Loan Administration manager and other executive
officers on a quarterly basis.
Branch Committee The
Branch Committees of the Bank shall consist of the Directors assigned to or representing a particular community office. This committee
will meet with the Branch Manager, executive officers of the Bank and association directors of that office on a monthly basis to discuss
the progress and/or problems of the particular office they represent. The Committee may make recommendations on unlimited matters concerning
that office for consideration at the monthly Director’s Meeting.
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