-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BC26owxIV4rmapfoYfxKaff6VyVfkfOttIBoiG7YKNIjq+P2UoDA5vl4TrF7qu/j 1yFw6f8PfuTy4lhvTlWarA== 0000950144-96-007059.txt : 19961016 0000950144-96-007059.hdr.sgml : 19961016 ACCESSION NUMBER: 0000950144-96-007059 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19961015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARDINAL BANCSHARES INC CENTRAL INDEX KEY: 0000888184 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 611128205 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-14089 FILM NUMBER: 96643208 BUSINESS ADDRESS: STREET 1: 400 E VINE ST STE 300 CITY: LEXINGTON STATE: KY ZIP: 40507 BUSINESS PHONE: 6062558300 MAIL ADDRESS: STREET 1: 400 E VINE ST STREET 2: STE 300 CITY: LEXINGTON STATE: KY ZIP: 40507 S-3 1 CARDINAL BANCSHARES, INC. FORM S-3 1 As filed with the Securities and Exchange Commission on October 15, 1996 REGISTRATION NO. 333-__________ - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- CARDINAL BANCSHARES, INC. (Exact Name of Registrant as Specified in Its Charter) KENTUCKY 61-1128205 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
400 EAST VINE STREET, SUITE 300 LEXINGTON, KENTUCKY 40507 (606) 255-8300 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) JACK H. BROWN CARDINAL BANCSHARES, INC. 400 EAST VINE STREET, SUITE 300 LEXINGTON, KENTUCKY 40507 (606) 255-8300 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service) COPIES TO: STUART G. STEIN LAWRENCE D. KAPLAN HOGAN & HARTSON L.L.P. 555 THIRTEENTH STREET, N.W. WASHINGTON, D.C. 20004-1109 (202) 637-5600 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as possible after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [X] CALCULATION OF REGISTRATION FEE =================================================================================================================================== PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE PRICE PER AGGREGATE OFFERING AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED SHARE (1) PRICE REGISTRATION FEE - ------------------------------------------------------------------------------------------------------------------------------------ Common Stock, no par value per share 85,246 $40.275 $3,433,282.65 $1,040.39 ====================================================================================================================================
(1) Pursuant to Rule 457(c) the registration fee has been calculated on the average of the high and low price as of October 14, 1996. -------------------- THE REGISTRANT HEREBY AMENDS THE REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. 2 SUBJECT TO COMPLETION October 15, 1996 PROSPECTUS 85,246 SHARES CARDINAL BANCSHARES, INC. COMMON STOCK ______________________________ This Prospectus relates to the offer and sale from time to time by certain holders (the "Selling Stockholders") of up to 85,246 shares (the "Offered Shares") of common stock, no par value per share (the "Common Stock"), of Cardinal Bancshares, Inc., Lexington, Kentucky ("Company," "Cardinal" or "Registrant"). The Company is registering the Offered Shares as required under the terms of certain agreements between the Company and the Selling Stockholders. The registration of the Offered Shares does not necessarily mean that any of the Offered Shares will be offered or sold by the Selling Stockholders. The Company will receive no part of the proceeds of any sales of the Offered Shares, but will incur certain expenses in connection with the offering. See "Selling Stockholders" and "Plan of Distribution." The Common Stock is quoted on the Nasdaq Stock Market's National Market System under the symbol "CARD." On October 14, 1996, the last reported sale price of the Common Stock on the Nasdaq Stock Market's National Market System was $40.50. _____________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. _____________________ The Selling Stockholders may from time to time offer and sell all or a portion of the Offered Shares in transactions on the Nasdaq Stock Market's National Market System, in the over-the-counter market, on any other national securities exchange on which the Common Stock is listed or traded, in negotiated transactions or otherwise, at prices then prevailing or related to the then-current market price or at negotiated prices. The Offered Shares may be sold directly or through agents or broker-dealers acting as principal or agent, or in block trades or pursuant to a distribution by one or more underwriters on a firm commitment or best-efforts basis. To the extent required, the names of any agents or broker-dealers and applicable commissions or discounts and any other required information with respect to any particular offer will be set forth in this Prospectus under the caption "Plan of Distribution" or any accompanying Prospectus Supplement. Each of the Selling Stockholders reserves the right to accept or reject, in whole or in part, any proposed purchase of the Offered Shares to be made directly or through agents. The Selling Stockholders and any agents or broker-dealers participating in the distribution of the Offered Shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), and any profit on the sale of Offered Shares by the Selling Stockholders and any commissions received by any such agents or broker-dealers may be deemed to be underwriting commissions or discounts under the Securities Act. _____________________ THE DATE OF THIS PROSPECTUS IS OCTOBER ___, 1996. 3 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SHARES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. 4 AVAILABLE INFORMATION The Company is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission in accordance with the Exchange Act can be inspected and copied at the Public Reference Section maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional offices of the Commission: Seven World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a site on the World Wide Web ("Web") of the Internet that contains reports, proxy and information statements and other information regarding registrants that file reports electronically with the Commission. The Commission's web site is located at . In addition, the Common Stock is listed on the Nasdaq Stock Market's National Market System under the symbol "CARD" and such reports, proxy statements and other information concerning the Company can be inspected and copied at the offices of the National Association of Securities Dealers, Inc. (the "NASD"). The Company has filed with the Commission a registration statement on Form S-3 (the "Registration Statement"), of which this Prospectus is a part, under the Securities Act, with respect to the Offered Shares. This Prospectus does not contain all of the information set forth in the Registration Statement, certain portions of which have been omitted as permitted by the rules and regulations of the Commission. Statements contained in this Prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance, reference is made to the copy of such contract or other documents filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference and the exhibits and schedules thereto. For further information regarding the Company and the Offered Shares, reference is hereby made to the Registration Statement and such exhibits and schedules which may be obtained from the Commission at its principal office in Washington, D.C. upon payment of the fees prescribed by the Commission. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The Company hereby incorporates the following documents into this Registration Statement: A. The Company's Annual Report on Form 10-K for the year ended December 31, 1995, filed pursuant to Section 13(a) or 15(d) of the Exchange Act. B. All other reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the Annual Report referred to above, including the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996; and the Company's Current Reports on Form 8-K dated March 15, 1996, March 19, 1996, April 8, 1996, April 19, 1996, April 25, 1996, May 29, 1996 and June 7, 1996. C. The description of the Common Stock contained in the Form 8-A filed by the Company on August 4, 1992, as updated by any amendment or report filed for the purpose of updating such description. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c) 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the - 2 - 5 termination of the offering of all Offered Shares shall be deemed to be incorporated by reference in this Prospectus and shall be part hereof from the date of filing such documents. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in the Prospectus (in the case of a statement in a previously filed document incorporated or deemed to be incorporated by reference herein), in any applicable Prospectus Supplement (as defined below) relating to a specific offering of Offered Shares or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus or any accompanying Prospectus Supplement. Subject to the foregoing, all information appearing in this Prospectus and each accompanying Prospectus Supplement is qualified in its entirety by the information appearing in the documents incorporated by reference. The Company will provide without charge to each person to whom this Prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated herein by reference (other than exhibits to such documents, unless such exhibits are specifically incorporated by reference in such information). Written requests for such copies should be directed to Cardinal Bancshares, Inc., 400 East Vine Street, Suite 300, Lexington, Kentucky 40507, Attention: Jack H. Brown, telephone number: (606) 255-8300. THE COMPANY The Company is a bank holding company registered under the Bank Holding Company Act of 1956, as amended. As of June 30, 1996, the Company had total consolidated assets of approximately $622.9 million and its total consolidated stockholders' equity was approximately $49.6 million. The Company's business is conducted primarily through its four bank subsidiaries: The Vine Street Trust Company ("Vine Street"); HNB Bank ("HNB"); First & Peoples Bank ("First & Peoples") and the Jefferson Banking Company ("Jefferson"), and through its thrift subsidiary Alliance Bank, FSB ("Alliance"). Vine Street, HNB, First & Peoples and Jefferson conduct a commercial banking business throughout Fayette, Harlan, Estill, Washington and Jefferson counties in Kentucky, which includes accepting demand and time deposits, providing checking and money market accounts, making commercial, consumer and mortgage loans and providing safe deposit facilities. Vine Street also offers personal and corporate trust services. As part of Vine Street's activities, it originates Small Business Administration and Farmer's Home Administration loans through loan production offices of its subsidiary, VST Financial Services, Inc., which is located in Atlanta, Georgia, Wilmington, North Carolina and Tampa, Florida well as its Lexington, Kentucky office. Mutual Insurance Agency, Inc., a subsidiary of HNB, offers general insurance products, including property and casualty insurance policies and annuity insurance products. Alliance is principally engaged in the business of attracting retail deposits from the general public and investing those funds in mortgage loans (secured primarily by one-to-four family real estate), construction loans, consumer loans and investment securities. Alliance has a subsidiary, Mutual Service Corporation, which offers a broad range of securities products through an agreement with Compulife Investor Services. The Company's principal executive offices are located at 400 East Vine Street, Suite 300, Lexington, Kentucky, and its telephone number is (606) 255-8300. - 3 - 6 USE OF PROCEEDS The Company will not receive any of the proceeds from sales of the Offered Shares by the Selling Stockholders. All costs and expenses incurred in connection with the registration under the Securities Act of the offering made hereby will be paid by the Company, other than any brokerage fees and commissions, fees and disbursements of legal counsel for the Selling Stockholders and stock transfer and other taxes attributable to the sale of the Offered Shares, which will be paid by the Selling Stockholders. SELLING STOCKHOLDERS The Selling Stockholders own 85,246 Offered Shares in the aggregate, which were acquired in a private placement of the Offered Shares in April 1996 by the Company. The following table provides the name of each Selling Stockholder, the number of shares of Common Stock owned by each Selling Stockholder before the offering to which this Prospectus relates, and the number of Offered Shares offered by each Selling Stockholder. Because the Selling Stockholders may sell all or some of their Offered Shares, no estimate can be made of the number of Offered Shares that will be sold by the Selling Stockholders or that will be owned by each of the Selling Stockholders upon completion of the offering. There is no assurance that the Selling Stockholders will sell any of the Offered Shares. The Offered Shares represent approximately 5.38% of the total shares of Common Stock outstanding as of July 31, 1996.
SHARES BENEFICIALLY OWNED NUMBER OF PRIOR TO SHARES BEING NAME OF SELLING STOCKHOLDER OFFERING OFFERED - --------------------------- ------------ ------------ Argonaut Partnership, L.P...................... 0 3,688 Dawson Development Company Limited Partnership. 0 16,393 DC Investment Partners......................... 3,600 8,197 J. Rex Fuqua................................... 1,000 16,394 Gerstenhaber Investments L.P. 0 410 Richard A. Horstmann........................... 0 24,590 The Alan W. Steinberg, L.P..................... 0 7,377 West Broadway Partners, L.P.................... 0 8,197 ----- ------ TOTAL......................................... 4,600 85,246 ===== ======
PLAN OF DISTRIBUTION Any of the Selling Stockholders may from time to time, in one or more transactions, sell all or a portion of the Offered Shares on the Nasdaq Stock Market's National Market System, on any other national securities exchange on which the Common Stock is listed or traded, in negotiated transactions, in underwritten transactions or otherwise, at prices then prevailing or related to the then current market price or at negotiated prices. The offering price of the Offered Shares from time to time will be determined by the Selling Stockholders and, at the time of such determination, may be higher or lower than the market price of the Common Stock on the Nasdaq Stock Market's National Market System. In connection with an underwritten offering, underwriters or agents may receive compensation in the form of discounts, concessions or commissions from a Selling Stockholder or from purchasers of Offered Shares for whom they may act as agents, and underwriters may sell Offered Shares to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Under agreements that may be entered into by the Company, underwriters, dealers and agents who participate in the distribution of Offered Shares - 4 - 7 may be entitled to indemnification by the Company against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. The Offered Shares may be sold directly or through broker-dealers acting as principal or agent, or pursuant to a distribution by one or more underwriters on a firm commitment or best-efforts basis. The methods by which the Offered Shares may be sold include: (a) a block trade in which the broker-dealer so engaged will attempt to sell the Offered Shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this Prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers; (d) an exchange distribution in accordance with the rules of the Nasdaq Stock Market's National Market System; (e) privately-negotiated transactions; and (f) underwritten transactions. The Selling Stockholders and any underwriters, dealers or agents participating in the distribution of the Offered Shares may be deemed to be "underwriters" within the meaning of the Securities Act, and any profit on the sale of the Offered Shares by the Selling Stockholders and any commissions received by an such broker-dealers may be deemed to be underwriting commissions under the Securities Act. When a Selling Stockholder elects to make a particular offer of Offered Shares, a prospectus supplement, if required, will be distributed which will identify any underwriters, dealers or agents and any discounts, commissions and other terms constituting compensation from such Selling Stockholder and any other required information ("Prospectus Supplement"). In order to comply with the securities laws of certain states, if applicable, the Offered Shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the Offered Shares may not be sold unless they have been registered or qualified for sale in such state or an exemption from such registration or qualification requirement is available and is complied with. The Company has agreed to pay all costs and expenses incurred in connection with the registration under the Securities Act of the Offered Shares. The Selling Stockholders will pay any brokerage fees and commissions, fees and disbursements of legal counsel for the Selling Stockholders and stock transfer and other taxes attributable to the sale of the Offered Shares. The Company also has agreed to indemnify each of the Selling Stockholders and, if appropriate the respective officers, directors and each person who controls a Selling Stockholder within the meaning of the Securities Act and any underwriters, including officers and directors and any other persons who are participating in the distribution of the Offered Shares from and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses, including without limitation, interest, penalties and reasonable attorneys' fees and disbursements, asserted against, resulting to, imputed upon or incurred, directly or indirectly (collectively "Claims") against a Selling Stockholder , based upon, arising out of, or resulting from any untrue material fact contained in the Registration Statement or any omission to state in the Registration Statement a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, to the extent that such Claim is based upon, arises out of or results from information furnished to the Company by a Selling Stockholder in a written document provided by a Selling Stockholder for use in the Registration Statement. Each of the Selling Stockholders has agreed to indemnify the Company, its officers and directors and each person, if any, who controls the Company, within the meaning of the Securities Act, against any Claims based upon any untrue statement of material fact contained in the Registration Statement or any omission to state therein a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, to the extent such Claim is based upon, arises out of or results from information furnished by the Company to the Selling Stockholder in a written document provided by the Company for use in connection with a Registration Statement. - 5 - 8 EXPERTS The consolidated financial statements of Cardinal Bancshares, Inc. and Subsidiaries as of December 31, 1995 and 1994, and for each of the years in the three-year period ended December 31, 1995, have been incorporated by reference herein in reliance on the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated by reference herein, and given on the authority of said firm as experts in auditing and accounting. - 6 - 9 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- No dealer, salesperson or other individual has been authorized to give any information or to make any representations not contained or incorporated by reference in this Prospectus in connection with the offering covered by this Prospectus. If given or made, such information or representations must not be relied upon as having been authorized by the Company or the Acquirers. This Prospectus does not constitute an offer to sell, or a solicitation of any offer to buy, the Offered Shares, in any jurisdiction where, or to any person to whom, it is unlawful to make any such offer or solicitation. Neither the delivery of this Prospectus nor any offer or sale made hereunder shall, under any circumstances, create an implication that there has not been any change in the facts set forth in this Prospectus or in the affairs of the Company since the date hereof. ----------------- TABLE OF CONTENTS PAGE
Available Information................................................... 2 Incorporation of Certain Documents by Reference.......................................................... 2 The Company............................................................. 3 Use of Proceeds......................................................... 4 Selling Stockholders.................................................... 4 Plan of Distribution.................................................... 4 Experts................................................................. 6
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 85,246 SHARES CARDINAL BANCSHARES, INC. COMMON STOCK --------------------- PROSPECTUS --------------------- OCTOBER ___, 1996 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the estimated fees and expenses payable by the Company in connection with the issuance and distribution of the securities being registered: Registration Fee ................... $ 1,040.39 Printing and Duplicating Expenses .. 500 Legal Fees and Expenses ............ 7,500 Accounting Fees and Expenses ....... 1,200 Blue Sky Fees and Expenses ......... 1,625 Miscellaneous ...................... 1,000 ---------- Total $12,865.39 ==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS (a) Article IX of the Registrant's Articles of Restatement of the Articles of Incorporation, entitled "Indemnification," is set forth as Exhibit 99.1 to this Registration Statement and incorporated herein by reference. (b) Section 271B.8-500 et. seq. of the Business Corporations Law of the State of Kentucky, entitled "Indemnification," is set forth as Exhibit 99.2 to this Registration Statement and is incorporated herein by reference. (c) The Registrant has in effect a policy of liability insurance covering its directors and officers. ITEM 16. EXHIBITS 4.1 - Articles of Restatement of The Articles of Incorporation of the Registrant 4.2 - By-laws of the Registrant 5 - Opinion of Hogan & Hartson L.L.P. 23.1 - Consent of KPMG Peat Marwick LLP 23.2 - Consent of Hogan & Hartson L.L.P. (included in Exhibit 5) 99.1 - Article IX of Registrant's Articles of Restatement of the Articles of Incorporation entitled "Indemnification" 99.2 - Section 271B.8-500 et seq. of the Business Corporations Law of the State of Kentucky, entitled "Indemnification" 11 ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in this registration statement; Provided, however, that subparagraphs (i) and (ii) above do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in the periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the Offered Shares offered herein, and the offering of such Offered Shares at that time shall be deemed to be the initial bona fide offering thereof. The undersigned Registrant hereby further undertakes that, for the purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the Offered Shares offered herein, and the offering of such Offered Shares at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to existing provisions or arrangements whereby the registrant may indemnify a director, officer or controlling person of the registrant against liabilities arising under the Securities Act of 1933, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, - 2 - 12 suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. - 3 - 13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Lexington, Kentucky, on October 15, 1996. CARDINAL BANCSHARES, INC. BY: /s/ John S. Penn --------------------------- John S. Penn, President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below appoints John S. Penn and Jack H. Brown, either of whom may act without the joinder of the others, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her, and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed on October 15, 1996, by the following persons in the capacities indicated: /s/ John S. Penn President and Director -------------------------------- (Principal Executive Officer) John S. Penn /s/ Jack H. Brown Chief Financial Officer -------------------------------- (Principal Financial and Accounting Jack H. Brown Officer) /s/ Samuel A.B. Boone Director -------------------------------- Samuel A.B. Boone /s/ Vernon J. Cole Director -------------------------------- Vernon J. Cole /s/ Loyd G. Jasper Director -------------------------------- Loyd G. Jasper - 4 - 14 /s/ Ryan R. Mahan Director -------------------------------- Ryan R. Mahan Director -------------------------------- Ronald C. Switzer - 5 - 15
INDEX TO EXHIBITS Exhibit Sequentially Number Description of Exhibit Numbered ------ ---------------------- -------- Page ---- 4.1 - Articles of Restatement of The Articles of Incorporation of the Registrant 4.2 - By-laws of the Registrant 5 - Opinion of Hogan & Hartson L.L.P. 23.1 - Consent of KPMG Peat Marwick LLP 23.2 - Consent of Hogan & Hartson L.L.P. (included in Exhibit 5) 99.1 - Article IX of Registrant's Articles of Restatement of the Articles of Incorporation entitled "Indemnification" 99.2 Section 271B.8-500 et seq. of the Business Corporations Law of the State of Kentucky, entitled "Indemnification"
- 6 - EX-4.1 2 ARTICLES OF RESTATEMENT 1 Exhibit 4.1 Articles of Restatement of The Articles of Incorporation of the Registrant ARTICLES OF RESTATEMENT OF THE ARTICLES OF INCORPORATION OF CARDINAL BANCSHARES, INC. Pursuant to the provisions of KRS 271B.10-070, the undersigned corporation executes these Articles of Restatement of its Articles of Incorporation. First: The name of the Corporation is Cardinal Bancshares, Inc. Second: The following Articles of Restatement contain amendments to the Articles which amend and substitute in the entirety Articles IV and IX. Third: The amendments included in these Articles of Restatement do not provide for an exchange, reclassification or cancellation of issued shares. Fourth: The amendments to the following Articles of Restatement required shareholder approval and were approved by the shareholders of the Corporation on April 16, 1992 in the manner prescribed by the Kentucky Business Corporation Act. Fifth: There were 869,708 shares of common stock entitled to be cast on the amendments and 647,932 shares of common stock were indisputably represented at the meeting. Sixth: There were 626,682 votes cast in favor of the amendments and the number of votes cast for the amendments was sufficient for approval by the common stockholders, the only voting group entitled to a vote on the amendments. The Corporation's Articles of Incorporation are Restated as follows: ARTICLE I NAME The name of the Corporation is Cardinal Bancshares, Inc. - 7 - 2 ARTICLE II REGISTERED OFFICE AND RESIDENT AGENT The registered office of the Corporation in the Commonwealth of Kentucky is 400 East Vine Street, Suite 300, Lexington, Kentucky 40507. The registered agent at the same address is James S. Mahan III. ARTICLE III PRINCIPAL OFFICE The address of the principal office of the Corporation is 400 East Vine Street, Suite 300, Lexington, Kentucky 40507. ARTICLE IV CAPITAL STOCK The total number of shares which may be issued by the Corporation is 5,000,000 shares of common stock having no par value. Every shareholder is entitled to one vote per share and may vote same as provided by law. ARTICLE V INCORPORATOR The name and address of the Incorporator is Joseph H. Terry, Lexington Financial Center, 250 West Main Street, Lexington, Kentucky 40507. ARTICLE VI DIRECTORS The business and affairs of the Corporation are to be conducted by a Board of Directors of not less than one nor more than twenty members, the number to be set in the manner provided in the bylaws. ARTICLE VII BYLAWS The bylaws for the Corporation shall be adopted and may be amended or repealed by the Board of Directors, subject to repeal or change by action of the shareholders. - 8 - 3 ARTICLE VIII ELIMINATION OF DIRECTOR LIABILITY No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for a breach of his or her duties as a director except for liability: (a) for any transaction in which director's personal financial interest is in conflict with the financial interest of the Corporation or its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or are known to the director to be a violation of law; (c) for distributions made in violation of the Kentucky Business Corporation Act; or (d) for any transaction from which the director derives an improper personal benefit. If the Kentucky Business Corporation Act is amended, modified or supplemented or any other statutory provision is adopted, in either case, after approval by the stockholders of this Article to eliminate or limit further the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Kentucky Business Corporation Act, as so amended, or the statutory provision as adopted. Any repeal or modification of this Article by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. ARTICLE IX INDEMNIFICATION A. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative - 9 - 4 (hereinafter a "proceeding"), by reason of the fact that he or she or a person for whom he or she is the legal representative is or was a director or executive officer of the Corporation or is or was serving at the request of the Corporation as a director of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director or executive officer of the Corporation shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Kentucky Business Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director or executive officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, such indemnitee shall be entitled to indemnification only if he or she has discharged his or her duties in good faith, on an informed basis, and in a manner the indemnitee honestly believes to be in the best interests of the Corporation; and provided, however, that, except as provided in paragraph C hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the Corporation. B. Right to Advancement of Expenses. The right to indemnification conferred in paragraph A of this Section shall include the right to be paid by the Corporation the expenses incurred in defending any proceeding for - 10 - 5 which such right to indemnification is applicable in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise and a written affirmation of the indemnitee's good faith belief that the indemnitee has discharged his or her duties in good faith, on an informed basis, and in a manner the indemnitee honestly believes to be in the best interests of the Corporation. C. Right of Indemnitee to Bring Suit. The right to indemnification and to the advancement of expenses conferred in paragraphs A and B of this Article shall be contract rights. If a claim under paragraph A or B of this Article is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to answer the unpaid amount of the claim. It shall be a defense to any such action that the indemnitee has not discharged his duties in good faith on an informed basis and in a manner he honestly believes to be in the best interests of the Corporation. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. Neither the failure of the Corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper - 11 - 6 in the circumstances because the indemnitee has discharged his duties in good faith, on an informed basis and in a manner he or she honestly believes to be in the best interests of the Corporation, nor an actual determination by the Corporation (including its board of directors, independent legal counsel, or its stockholders) that the indemnitee has not met such aforementioned applicable standard of conduct, shall create a presumption that indemnitee has not met the aforementioned applicable standard of conduct or in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article or otherwise shall be on the Corporation. If the standard of care provided in paragraphs A, B, C, or F of this Article is found not to be permissible under Kentucky law, the indemnitee shall be held to the applicable standard of conduct under the Kentucky Business Corporation Act. D. Non-Exclusivity of Rights. The rights of indemnification and to the advancement of expense conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, these articles of incorporation, by-law, agreement, vote of stockholders of disinterested directors or otherwise both as to action in his official capacity and as to action in another capacity while holding office. E. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Kentucky Business Corporation Act. - 12 - 7 F. Officer's Employee's and Agent's Rights to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, ("proceeding"), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as an officer, employee or agent, of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as an officer, employee or agent or in any other capacity while serving as an officer, employee or agent, may, by action of the Board of Directors, be indemnified and held harmless by the Corporation to the fullest extent authorized by the Kentucky Business Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment) against all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, such indemnitee shall be entitled to indemnification only if he or she has discharged his or her duties in good faith, on an informed basis and in a manner the indemnitee honestly believes to be in the best interests of the Corporation; and provided, however, that the Corporation may, by action of the Board of Directors, indemnify any such person seeking indemnity in connection with an action, suit or proceeding (or part thereof) initiated by such person only if such action, suit or proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The Board of Directors may, in its discretion, advance the payment of expenses. - 13 - 8 Dated this 23rd day of April, 1992. CARDINAL BANCSHARES, INC. /s/ John S. Penn --------------------------------- John S. Penn, President THIS INSTRUMENT PREPARED BY: /s/ Lisa E. Underwood - ---------------------------- Lisa E. Underwood WYATT, TARRANT & COMBS Lexington Financial Center 250 West Main Street Lexington, Kentucky 40507 (606) 233-2012 - 14 - EX-4.2 3 AMENDED AND RESTATED BYLAWS 1 Exhibit 4.2 By-laws of the Registrant AMENDED AND RESTATED BYLAWS OF CARDINAL BANCSHARES, INC. ARTICLE I OFFICES The principal office of the corporation in the State of Kentucky shall be located at 400 East Vine Street, Suite 300, Lexington, Kentucky. The corporation may have such other offices, either within or without the State of Kentucky, as the business of the corporation may require from time to time. The registered office of the corporation may be, but need not be, identical with the principal office in the State of Kentucky and the address of the registered office may be changed from time to time by the Board of Directors. ARTICLE II SHAREHOLDERS SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall be held on the third Thursday of April beginning with the year 1989 at the hour of 9:00 a.m. for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a Sunday or a legal holiday, such meeting shall be held on the next secular day. If the election of directors shall not be held on the day designated for any annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders to be held as soon thereafter as may be convenient. SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be called by the chief executive officer, the president, by a majority of the members of the Board of Directors or by the holders of not less than one-fifth of all the shares entitled to vote at the meeting. SECTION 3. PLACE OF MEETING. The Board of Directors may designate any place within or without the State of Kentucky as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. A waiver of notice signed by all shareholders may designate any place, either within or without the State of Kentucky, as the place for the holding of such meeting. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the office of the corporation in the State of Kentucky, except as otherwise provided in Section 5 of this article. SECTION 4. NOTICE OF MEETINGS. Written or printed notice stating the place, day and hour of the meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than ten nor more than fifty days before the date of the meeting, either personally or by mail, by or at the direction of the president, or the secretary, or the officer or persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail in a sealed envelope addressed to the shareholder at his address as it appears on the records of the corporation, with postage thereon prepaid. SECTION 5. MEETING OF ALL SHAREHOLDERS. If all of the shareholders shall meet at any time and place, either within or without the State of Kentucky, and consent to the holding of a meeting, such meeting shall be valid without call or notice, and at such meeting any corporate action may be taken. SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board of Directors of the corporation may close its stock transfer books for the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose for a period not to exceed fifty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, the transfer books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty days and, in case of a meeting of shareholders, not less - 15 - 2 than ten days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, the first date on which a resolution of the Board of Directors declaring such dividend or fixing the date for such meeting of shareholders is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided herein, such determination shall apply to any adjournment thereof. SECTION 7. VOTING LISTS. The officer or agent having charge of the transfer book for shares of the corporation shall make a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each shareholder, which list, for a period of ten days prior to such meeting, shall be kept on file at the office of the corporation and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original share ledger or stock transfer book, or a duplicate thereof kept in this State, shall be prima facie evidence as to who are the shareholders entitled to examine such list or share ledger or stock transfer book or to vote at any meeting of shareholders. SECTION 8. QUORUM. A majority of the outstanding shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders. The shareholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney-in- fact. Such proxy shall be filed with the secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy, but in no event shall a proxy, unless coupled with an interest, be voted on three years from the date of its execution. SECTION 10. VOTING OF SHARES. Subject to the provisions of the Articles of Incorporation, each outstanding share of common stock shall be entitled to one vote upon each matter submitted to a vote at a meeting of shareholders. The rights of classes of shares other than common shall be as set forth in the stock certificate. SECTION 11. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be taken at a meeting of the shareholders may be taken without a - 16 - 3 meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof. ARTICLE III DIRECTORS SECTION 1. GENERAL POWERS. The business and affairs of the corporation shall be managed by its Board of Directors. SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The exact number of Directors to be elected by the Shareholders shall be determined by the Board of Directors from to time to time; provided, however, that no decrease in the number of Directors shall operate to shorten the term of any incumbent Director. In the event the number of Directors is increased, that number of Directors shall be within the limit specified in the Articles of Incorporation. The Board of Directors may elect a Director to serve in the vacancy created by an increase in the number of Directors, which Director shall serve until the next meeting of Shareholders at which Directors are elected. Each Director shall hold office for the term for which he is elected or until his successor shall have been elected and qualifies for the office, whichever period is longer. Directors need not be residents of Kentucky, nor need they be holders of any shares of the capital stock of the Corporation. SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without other notice than this bylaw, immediately after, and at the same place as, the annual meeting of shareholders. The Board of Directors may provide, by resolution, the time and place, within or without the State of Kentucky, for the holding of additional regular meetings without other notice than such resolution. SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chief executive officer, the president or any two directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Kentucky, as the place for holding any special meeting of the Board of Directors called by them. SECTION 5. NOTICE. Notice of any special meeting shall be given at least two days previously thereto by written notices delivered personally or mailed to each director at his business address, or by telegram. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail in a sealed envelope so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully - 17 - 4 called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. SECTION 6. QUORUM. A majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that if less than a majority of the directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. SECTION 7. MANNER OF ACTING. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors; provided, however, that the Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an executive committee and one or more other committees, each of which, to the extent provided in such resolution, shall have and may exercise all the authority of the Board of Directors, but no such committee shall have the authority of the Board of Directors in reference to amending the articles of incorporation, adopting a plan of merger or consolidation, recommending to the shareholders the sale, lease, exchange or other disposition of all or substantially all the property and assets of the corporation otherwise than in the usual and regular course of business, recommending to the shareholders a voluntary dissolution of the corporation or a revocation thereof, or amending these Bylaws. SECTION 8. VACANCIES. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by the Board of Directors for a term of office continuing only until the next election of directors by the shareholders. SECTION 9. COMPENSATION. The Board of Directors shall have authority to fix the compensation of directors. SECTION 10. INFORMAL ACTION. Any action required by law to be taken at a meeting of the Board of Directors, or any action which may be taken at a meeting of the Board of Directors or of a committee, may be taken without a meeting if a consent, in writing, setting forth the action so taken shall be signed by all of the directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote. ARTICLE IV OFFICERS SECTION 1. CLASSES. The officers of the corporation shall be a chairman of the board, a chief executive officer, a president, one or more vice - 18 - 5 presidents, a treasurer, a secretary, and such other officers, including a general manager, whose duties may be fixed from time to time by the Board of Directors, as may be provided by the Board of Directors and elected in accordance with the provisions of this article. The Board of Directors may also create the offices of one or more assistant treasurers and assistant secretaries, all of whom shall be elected by the Board of Directors. Any two or more offices may be held by the same person, except if the corporation has more than one shareholder the office of president and secretary may not be held by the same person. SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of shareholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. SECTION 3. REMOVAL. Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interest of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights. SECTION 4. VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors for the unexpired portion of the term. SECTION 5. CHAIRMAN OF THE BOARD. The chairman of the board shall preside at all meetings of the shareholders and of the Board of Directors. He shall have the authority to vote all shares of stock in other corporations owned by the corporation, unless the Board of Directors designates and appoints another person as proxy for the corporation; and in general shall perform all duties incident to the office of the chairman of the board and such other duties as may be prescribed by the Board of Directors from time to time. SECTION 6. CHIEF EXECUTIVE OFFICER. The chief executive officer shall be the principal executive officer of the corporation and shall in general supervise and control all of the business and affairs of the corporation; and shall perform all duties incident to the office of chief executive officer and such other duties as may be prescribed by the Board of Directors from time to time. SECTION 7. PRESIDENT. The president shall be the chief operating officer and in general supervise and control the day to day business and affairs of the corporation. He may sign, with the secretary, or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates for shares of - 19 - 6 the corporation, any deeds, mortgages, bonds, contracts, or other instruments which the Board of Directors has authorized to be executed except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these bylaws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and in general shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time. SECTION 8. VICE PRESIDENT. In the absence of the president or in the event of his inability or refusal to act, the vice president shall perform the duties of the president and, when so acting, shall have all the powers of and be subject to all the restrictions upon the president. The vice president may sign, with the secretary or an assistant secretary, certificates for shares of the corporation and shall perform such other duties as from time to time may be assigned to him by the president or by the Board of Directors. SECTION 9. TREASURER. If required by the Board of Directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall: [a] have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Article V of these bylaws; [b] in general, perform all the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the president or the Board of Directors. SECTION 10. SECRETARY. The secretary shall: [a] keep the minutes of the shareholders' and of the Board of Directors' meetings in one or more books provided for that purpose; [b] see that all notices are duly given in accordance with the provisions of these bylaws or as required by law; [c] be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all certificates for shares prior to the issue thereof and to all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these bylaws; [d] keep a register of the post office address of each shareholder which shall be furnished to the secretary by such shareholder; [e] sign with the president, or vice president, certificates for shares of the corporation, the issue of which shall have been authorized by resolution of the Board of Directors; [f] have general charge of the stock transfer books of the corporation; [g] in general, perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the president or by the Board of Directors. SECTION 11. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant treasurers shall respectively, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums - 20 - 7 and with such sureties as the Board of Directors shall determine. The assistant secretaries, as and if authorized by the Board of Directors, may sign with the president or vice president certificates for shares of the corporation, the issue of which shall have been authorized by a resolution of the Board of Directors. The assistant treasurers and assistant secretaries in general shall perform such duties as shall be assigned to them by the treasurer or the secretary, respectively, or by the president or the Board of Directors. SECTION 12. SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation. ARTICLE V CONTRACTS LOANS, CHECKS AND DEPOSITS SECTION 1. CONTRACTS. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instruments in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation, and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. SECTION 3. CHECKS, DRAFTS, ORDERS, ETC. All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents, of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board of Directors may select. ARTICLE VI CERTIFICATES FOR SHARES AND THEIR TRANSFER SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of the corporation shall be in such form as may be determined by the Board of Directors. Such certificates shall be signed by the president or vice president and by the secretary or an assistant secretary and may be sealed with the seal of the corporation or a facsimile thereof. All certificates for shares shall be consecutively numbered. The name of the person owning the shares represented - 21 - 8 thereby with the number of shares and date of issue shall be entered on the books of the corporation. All certificates surrendered to the corporation for transfer shall be canceled, and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate, a new one may be issued therefor upon such terms and indemnity to the corporation as the Board of Directors may prescribe. No certificate shall be issued for any share until such share is fully paid. SECTION 2. TRANSFER OF SHARES. Transfer of shares of the corporation shall be made only on the books of the corporation by the registered holder thereof or by his attorney thereunto authorized by power of attorney duly executed and filed with the secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed the owner thereof for all purposes as regards the corporation. ARTICLE VII FISCAL YEAR The fiscal year of the corporation shall be the calendar year. ARTICLE VIII WAIVER OF NOTICE Whenever any notice whatever is required to be given under the provisions of these bylaws, or under the provisions of the Articles of Incorporation, or under the provisions of the corporation laws of the State of Kentucky, waiver thereof in writing, signed by the person, or persons, entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. ARTICLE IX AMENDMENT OF BYLAWS The Board of Directors may alter, amend or rescind the bylaws, subject to the right of the shareholders to repeal or modify such actions. CERTIFICATE It is hereby certified that on this date we are, respectively, the duly elected and qualified president and secretary of Cardinal Bancshares, Inc., and that as of the 16th day of July, 1992, the foregoing Bylaws were amended by unanimous action of the board. - 22 - 9 /s/ John S. Penn ----------------------------- John S. Penn, President /s/ Carolyn Gabriel - ------------------------------- Carolyn Gabriel, Secretary - 23 - 10 RESOLUTION OF THE BOARD OF DIRECTORS OF CARDINAL BANCSHARES, INC. FOR ADOPTION OF AN AMENDMENT TO THE BYLAWS WHEREAS, the Board of Directors deems it advisable to amend the Corporation's bylaws as set forth below; BE IT RESOLVED, that the Board of Directors hereby approves the following Amendment to Article II, Section 1 of the Corporation's bylaws, which shall be amended in its entirety to read as follows: Section 1. ANNUAL MEETING. The annual meeting of the shareholders shall be held on the first Thursday of May beginning with the year 1994 at the hour of 9:00 a.m. for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a Sunday or legal holiday such meeting shall be held on the next secular day. If the election of Directors shall not be held on the day designated for any annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders to be held as soon thereafter as may be convenient. RESOLVED FURTHER, that the bylaws be amended and restated to include the Amendment to Article II, Section 1. It is hereby certified that on this date, January 29, 1994, the foregoing Amendment to Article II, section I of the Corporation's Bylaws was unanimously adopted by action of the board. /s/ Carolyn L. Gabriel --------------------------- Carolyn L. Gabriel Corporate Secretary - 24 - EX-5 4 OPINION OF HOGAN AND HARTSON L.L.P. 1 Exhibit 5 Opinion of Hogan & Hartson L.L.P. Hogan & Hartson L.L.P. Columbia Square 555 Thirteenth Street, N.W. Washington, D.C. 20004-1109 October 11, 1996 Board of Directors Cardinal Bancshares, Inc. 400 East Vine Street, Suite 300 Lexington, Kentucky 40507 Ladies and Gentlemen: We are acting as special counsel to Cardinal Bancshares, Inc., a Kentucky corporation (the "Company"), in connection with its registration statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission relating to the proposed public offering of up to 85,246 shares of the Company's common stock, no par value, all of which shares (the "Shares") may be sold by certain shareholders of the Company. This opinion letter is furnished to you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. Section 229.601(b)(5), in connection with the Registration Statement. For purposes of this opinion letter, we have examined copies of the following documents: 1. An executed copy of the Registration Statement. 2. The Articles of Restatement of the Articles of Incorporation of the Company, as certified by the Secretary of the Company on the date hereof as being complete, accurate and in effect. 3. The Amended By-laws of the Company, as certified by the Secretary of the Company on the date hereof as being complete, accurate and in effect. 4. Purchase Agreements between the Company and each of Argonaut Partnership L.P., Dawson Development Company Limited Partnership, DC Investment Partners, J. Rex Fuqua, Gerstenhaber Investments L.P., Richard A. Horstmann, Thomas Mark Yuele/The Alan W. Steinberg, L.P. and West Broadway Partners (jointly, the "Purchase Agreements"). - 25 - 2 5. Resolutions of the Board of Directors of the Company adopted on April 12, 1996, as certified by the Secretary of the Company on the date hereof as then being complete, accurate and in effect, relating to the Purchase Agreements and the issuance and sale of the Shares and arrangements in connection therewith. 6. Certificate of officers of the Company, dated the date hereof, as to certain facts relating to the original Issuance of the Shares and to the Company. In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity, accuracy, and completeness of all documents submitted to us as certified, telecopied, photostatic or reproduced copies. This opinion letter is given, and all statements herein are made, in the context of the foregoing. This opinion letter is based as to matters of law solely on the applicable provisions of Section 271B.6-210 of the Kentucky Business Corporation Act. We express no opinion as to any other laws, statutes, regulations or ordinances. Based upon, subject to and limited by the foregoing, we are of the opinion that the Shares are validly issued, fully paid and non-assessable under the applicable provisions of Section 271B.6-210 of the Kentucky Business Corporation Act. We assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of this opinion letter. This opinion letter has been prepared solely for your use in connection with the filing of the Registration Statement on the date hereof, and should not be quoted in whole or in part or otherwise be referred to, nor otherwise be filed with or furnished to any governmental agency or other person or entity, without the prior written consent of this firm. We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement. In giving this consent, we do not thereby admit that we are an "expert" within the meaning of the Securities Act of 1933, as amended. Very truly yours, /s/ Hogan & Hartson L.L.P. --------------------------- HOGAN & HARTSON L.L.P. - 26 - EX-23.1 5 CONSENT OF KPMG PEAT MARWICK L.L.P. 1 Exhibit 23.1 Consent of KPMG Peat Marwick LLP The Board of Directors Cardinal Bancshares, Inc.: We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Prospectus. /s/ KPMG Peat Marwick LLP Lexington, Kentucky October 10, 1996 - 27 - EX-99.1 6 ARTICLE IX OF THE REGISTRATION 1 Exhibit 99.1 Article IX of the Registrant's Articles of Restatement of the Articles of Incorporation entitled "Indemnification" ARTICLE IX INDEMNIFICATION A. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she or a person for whom he or she is the legal representative is or was a director or executive officer of the Corporation or is or was serving at the request of the Corporation as a director of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director or executive officer of the Corporation shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Kentucky Business Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director or executive officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, such indemnitee shall be entitled to indemnification only if he or she has discharged his or her duties in good faith, on an informed basis, and in a manner the indemnitee honestly believes to be in the best interests of the Corporation; and provided, however, that, except as provided in paragraph C hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board of directors of the Corporation. B. Right to Advancement of Expenses. The right to indemnification conferred in paragraph A of this Section shall include the right to be paid by the Corporation the expenses incurred in defending any proceeding for which such right to indemnification is applicable in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined that such indemnitee is not entitled to be indemnified for such expenses under this Section or otherwise and a written affirmation of the indemnitee's good faith belief that the indemnitee has discharged his or her duties in good faith, on an informed basis, and in a manner the indemnitee honestly believes to be in the best interests of the Corporation. C. Right of Indemnitee to Bring Suit. The right to indemnification and to the advancement of expenses conferred in paragraphs A and B of this Article shall be contract rights. If a claim under paragraph A or B of this Article is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, - 28 - 2 except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to answer the unpaid amount of the claim. It shall be a defense to any such action that the indemnitee has not discharged his duties in good faith on an informed basis and in a manner he honestly believes to be in the best interests of the Corporation. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. Neither the failure of the Corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has discharged his duties in good faith, on an informed basis and in a manner he or she honestly believes to be in the best interests of the Corporation, nor an actual determination by the Corporation (including its board of directors, independent legal counsel, or its stockholders) that the indemnitee has not met such aforementioned applicable standard of conduct, shall create a presumption that indemnitee has not met the aforementioned applicable standard of conduct or in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article or otherwise shall be on the Corporation. If the standard of care provided in paragraphs A, B, C, or F of this Article is found not to be permissible under Kentucky law, the indemnitee shall be held to the applicable standard of conduct under the Kentucky Business Corporation Act. D. Non-Exclusivity of Rights. The rights of indemnification and to the advancement of expense conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, these articles of incorporation, by-law, agreement, vote of stockholders of disinterested directors or otherwise both as to action in his official capacity and as to action in another capacity while holding office. E. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Kentucky Business Corporation Act. F. Officer's Employee's and Agent's Rights to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, ("proceeding"), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as an officer, employee or agent, of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as an officer, employee or agent or in any other capacity while serving as an officer, employee or agent, may, by action of the Board of Directors, be indemnified and held harmless by the Corporation to the fullest extent authorized by the Kentucky Business Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the - 29 - 3 Corporation to provide prior to such amendment) against all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, such indemnitee shall be entitled to indemnification only if he or she has discharged his or her duties in good faith, on an informed basis and in a manner the indemnitee honestly believes to be in the best interests of the Corporation; and provided, however, that the Corporation may, by action of the Board of Directors, indemnify any such person seeking indemnity in connection with an action, suit or proceeding (or part thereof) initiated by such person only if such action, suit or proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The Board of Directors may, in its discretion, advance the payment of expenses. - 30 - EX-99.2 7 SECTION 271B.8-500 ET SEQ. OF BUSH. CORP. LAW 1 Exhibit 99.2 Section 271B.8-500 et seq. of the Business Corporations Law of the State of Kentucky, entitled "Indemnification" INDEMNIFICATION 271B.8-500 DEFINITIONS FOR KRS 271B.8-510 TO 271B.8-580.--As used in KRS 271B.8-510 to 271B.8-580: (1) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction. (2) "Director" means an individual who is or was a director of a corporation or an individual, while a director of a corporation, is or was serving at the corporation's request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise. A director shall be considered to be serving an employee benefit plan at the corporation's request if his duties to the corporation also impose duties on, or otherwise involve services by, him to the plan or to the participants in or beneficiaries of the plan. "Director" includes, unless the context requires otherwise, the estate or personal representative of a director. (3) "Expenses" include counsel fees. (4) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding. (5) "Official capacity" means: (a) When used with respect to a director, the office of director in a corporation; and (b) When used with respect to an individual other than a director, as contemplated in KRS 271B.8-560, the office in a corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation. "Official capacity" shall not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, employee benefit plan, or other enterprise. (6) "Party" includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding. (7) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal. 271B.8-510 AUTHORITY TO INDEMNIFY.--(1) Except as provided in subsection (4) of this section, a corporation may indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (a) He conducted himself in good faith; and (b) He reasonably believed: 1. In the case of conduct in his official capacity with the corporation, that his conduct was in its best interests; and 2. In all other cases, that his conduct was at least not opposed to its best interests; and (c) In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful. (2) A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan shall be conduct that satisfies the requirement of subsection (1)(b)2. of this section. (3) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent shall not be, of itself, determinative that the director did not meet the standard of conduct described in this section. (4) A corporation may not indemnify a director under this section: (a) In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or (b) In connection with any other proceeding charging improper personal benefit to him, whether or not involving action in his official capacity, in which he was adjudged liable on the basis that personal benefit was improperly received by him. (5) Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation shall be limited to reasonable expenses incurred in connection with the proceeding. 271B.8-520 MANDATORY INDEMNIFICATION.-- Unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he was a party because he is or was a director of the corporation against reasonable expenses incurred by him in connection with the proceeding. 271B.8-530 ADVANCE FOR EXPENSES.--(1) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if: - 31 - 2 (a) The director furnishes the corporation a written affirmation of his good faith belief that he has met the standard of conduct described in KRS 271B.8-510; (b) The director furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and (c) A determination is made that the facts then known to those making the determination would not preclude indemnification under KRS 271B.8-500 to 271B.8-580. (2) The undertaking required by subsection (1)(b) of this section shall be an unlimited general obligation of the director but shall not be required to be secured and may be accepted without reference to financial ability to make repayment. (3) Determinations and authorizations of payments under this section shall be made in the manner specified in RS 271B.8-550. 271B.8-540 COURT-ORDERED INDEMNIFICATION.--Unless a corporation's articles of incorporation provide otherwise, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines: (1) The director is entitled to mandatory indemnification under KRS 271B.8-520, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnifications; or (2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he met the standard of conduct set forth in KRS 271B.8-510 or was adjudged liable as described in subsection (4) of KRS 271B.8-510, but if he was adjudged so liable his indemnification shall be limited to reasonable expenses incurred. 271B.8-550 DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.--(1) A corporation shall not indemnify a director under KRS 271B.8-510 unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he has met the standard of conduct set forth in KRS 271B.8-510. (2) The determination shall be made: (a) By the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding; (b) If a quorum cannot be obtained under subsection (2)(a) of this section, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate) consisting solely of two (2) or more directors not at the time parties to the proceeding; (c) By special legal counsel: 1. Selected by the board of directors or its committee in the manner prescribed in subsection (2)(a) and (b) of this section; or 2. If a quorum of the board of directors cannot be obtained under subsection (2)(a) of this section and a committee cannot be designated under subsection (2)(b) of this section, selected by a majority vote of the full board of directors (in which selection directors who are parties may participate); or - 32 - 3 (d) By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding shall not be voted on the determination. (3) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subsection (2)(c) of this section to select counsel. 271B.8-560 INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS.--Unless a corporation's articles of incorporation provide otherwise: (1) An officer of the corporation who is not a director shall be entitled to mandatory indemnification under KRS 271B.8-520, and is entitled to apply for court-ordered indemnification under KRS 271B.8-540, in each case to the same extent as a director; (2) The corporation may indemnify and advance expenses under KRS 271B.8-500 to 271B.8-580 to an officer, employee, or agent of the corporation who is not a director to the same extent as to a director; and (3) A corporation may also indemnify and advance expenses to an officer, employee, or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors or contract. 271B.8-570 INSURANCE.--A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify him against the same liability under KRS 271B.8-510 or 271B.8-520. 271B.8-580 APPLICATION OF KRS 271B.8-500 TO 271B.8-580.--The indemnification and advancement of expenses provided by, or granted pursuant to, KRS 271B.8-500 to KRS 271B.8-580 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. (2) KRS 271B.8-500 to 271B.8-580 shall not limit a corporation's power to pay or reimburse expenses incurred by a director in connection with his appearance as a witness at a proceeding at a time when he has not been made a named defendant or responded to the proceeding. - 33 - -----END PRIVACY-ENHANCED MESSAGE-----