**Exhibit3.2**

 

**AMENDEDAND RESTATED**

**BY-LAWS**

**OF**

**SUN BANCORP, INC.**

 

Selinsgrove, Pennsylvania

 

Effective as of July 10, 1990

 

ARTICLE I.

 

MEETINGS OF STOCKHOLDERS

 

Section 1.               AnnualMeeting of Stockholders.  The annualmeeting of the stockholders of SUN BANCORP, INC. (the “Corporation”) for thepurpose of electing a Board of Directors of the Corporation, and for thetransaction of such other business as may properly come before it, shall beheld on the fourth Thursday of April in each year between the hours of teno’clock a.m. and twelve o’clock noon, local time, at the principal office ofthe Corporation or such other time and place as designated by the Board ofDirectors. Written notice stating the time and the place of said meeting shallbe mailed by the Secretary, to each stockholder entitled to vote at themeeting, to the address of the stockholder on the stock records of theCorporation, at least ten (10) days before the date of said meeting, unless agreater period is required by law. Such notice shall be deemed to be given atthe time it is deposited in the United States mail.

 

Section 2.               SpecialMeetings of Stockholders.

 

(a)           Special meetings ofthe stockholders may be called at any time by the Chairman of the Board, thePresident or the Board of Directors.

 

(b)           The holders of notless than forty percent (40%) of all the shares outstanding and entitled tovote may at any time apply to the Secretary of the Corporation to call aspecial meeting of the stockholders and upon such application shall state theobject of the meeting. The Secretary shall estimate the cost of thepreparation, printing and mailing of the notice of the meeting and the proxymaterial and the review thereof by the appropriate regulatory authorities andcounsel for the Corporation. The stockholders who desire the special meetingshall deposit the sum of the estimated cost of holding the special meeting withthe Secretary and as determined by the Board may be liable for the cost of themeeting in addition to the deposit. After receipt of such deposit, the Board ofDirectors shall call such meeting at a time and place determined by it. TheBoard of Directors in its sole discretion shall determine whether thestockholder(s) requesting the special meeting shall pay the cost of holding thespecial meeting or whether the Corporation shall pay such costs and, in thelatter event, the Secretary shall refund the estimated costs so deposited.

 

(c)           Stockholder requestsfor inclusion of matters in proxy materials for the annual or special meetingsshall be handled in accordance with applicable law. Stockholder requests for

 

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inclusionof matters in the proxy material for the annual meeting must be submitted inthe form required by law in writing before the end of the calendar yearpreceding the annual meeting.

 

(d)           Notice of specialmeetings of stockholders is to be likewise mailed as required by Section 1 ofthis Article I for the annual stockholders meetings. Such notice of a specialmeeting shall state its purpose and no business shall be transacted at anyspecial meeting unless such business shall be included in the purpose stated insuch notice.

 

Section 3.               Quorum.At all regular and special meetings of the stockholders, a quorum shall consistof a majority of the total number of shares outstanding, represented in personor by proxy, unless otherwise provided by law. If a majority of the Corporation’s stock is not represented at anymeeting, the stockholders may adjourn the meeting to any subsequent time or daywithout any further notice to stockholders.

 

Section 4.               Proxies.

 

(a)           Stockholders mayvote by proxy authorized in writing. No proxy shall be valid or entitle theholder to vote unless executed and dated within two (2) months previous to anymeeting or election at which it my be offered. All proxies must be filed withthe Secretary before the start of voting.

 

(b)           The Board ofDirectors shall select proxies for annual and special meetings of thestockholders on or before the record date for the meeting. If any proxy soselected shall be unwilling or unable to act, the Board of Directors maydesignate one or more successors.

 

(c)           Except as providedin Section 2 of this Article I, proxy forms shall be printed at the expense ofthe Corporation and shall be forwarded to all stockholders, indicating that theproxy is solicited on behalf of the Board of Directors and the then presentmanagement of the Corporation and that the proxies so selected shall vote forthose nominated for the office of Director as selected by the Corporationmanagement.  In the event of any contestfor the position of Director, the Board of Directors shall have the right touse the funds of the Corporation for advertising, notice, telegram or letter orany reasonable means to induce the stockholders to vote for the nominees selectedby the Board of Directors.

 

Section 5.               Electionof Directors. All elections of Directors shall be by ballot and eachstockholder shall be entitled to one vote for each share of stock for eachDirector to be elected. Upon failure to elect Directors at the annual meeting,a special meeting of stockholders shall be called for that purpose by theDirectors within sixty (60) days of the annual meeting. Such election to besubject to similar notice and procedure as required by Section 1 of thisArticle I for the annual stockholders’ meeting.

 

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Section 6.               Voting.

 

(a)           All persons holdingand owning stock of the Corporation as of the record date, either in their ownright or as trustee or as the legal representative of stockholders shall havethe right to attend and vote at all meetings of the stockholders, and shallhave as many votes as the number of shares held or represented by themrespectively, but no person shall be permitted at any such meeting or electionto act as the proxy or attorney of any stockholder without a power of attorneytherefore duly executed and presented.

 

(b)           For election ofDirectors and amendments to By-Laws, there shall be a vote ballot and all othervoting need not be by ballot except by demand by a majority of stockholdersentitled to vote in person or by proxy or as determined by the Chairman of themeeting before the voting begins.  Whena quorum is present or represented at any meeting, the vote of the holders of amajority of the shares having voting powers and present in person orrepresented by proxy or by an apparent majority in case of a viva voce shalldecide any questions brought before such meeting, unless the question is oneupon which, by express provision of applicable law, the Corporation’s Articlesof Incorporation or these By-Laws, a different vote is required, in which casesuch express provision shall govern and control the decision of suchquestion.  Except as otherwise providedby applicable law, or in the Corporation’s Articles of Incorporation, everystockholder of record shall have the right, at every stockholders’ meeting, toone vote for every share standing in his/her name on the books of theCorporation.

 

Section 7.               StockholderRecord Dates. The Board of Directors may fix a date for the determinationof the stockholders entitled to receive notice of and to vote at any meeting orto receive any dividend, distribution or allotment of rights or a date for anychange, conversion or exchange of shares as required by law.

 

Section 8.               Stockholders’Meeting Procedures.

 

(a)           At the stockholders’meetings, the Chairman of the meeting shall determine the time of the openingof the polls, and the judges of election shall determine the time of theclosing of the polls, and the Secretary shall note these times in the minutes.

 

(b)           At the stockholders’meetings, the Chairman of the meeting shall have the right and authority toprescribe such rules, regulations and procedures and to do all such acts as arenecessary or desirable for the proper conduct of the meeting, including,without limitation, the establishment of procedures for voting, the maintenanceof order, safety, limitations on the time allocated to questions or comments onthe affairs of the Corporation.

 

Section 9.               CumulativeVoting Not Authorized.  As specifiedin the Corporation’s Articles of Incorporation, cumulative voting shall not bepermitted.  Each stockholder shall beentitled to one (1) vote for each share standing in his/her name and may vote,either in person or by proxy, on all matters and elections, including electionof Directors.

 

Section 10.             Removalof Directors. The stockholders of the Corporation may, by vote of seventyfive percent (75%) of all issued and outstanding stock, at any meeting duly convened,

 

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removeany one or more Directors of the Corporation for cause specified in paragraph(c) of Section 4 of Article II of these By-Laws and may then proceed to fillthe vacancy or vacancies caused by such removal or removals.

 

Section 11.             Judgesof Election. All elections of Directors by the stockholders shall beconducted by three (3) judges appointed for that purpose.  Said judges shall be sworn and shall certifythe result of the election.  The judgesshall be appointed by the Board of Directors, and in case of the failure of anyof the judges to act, substitutes may be appointed by the Chairman orelected  at the stockholders’ meeting.

 

Section 12.             List ofStockholders. The Corporation officer or agent having charge of thetransfer books for shares of the Corporation shall prepare and make, at leastfive (5) days before each meeting of stockholders, a complete list of thestockholders entitled to vote at the meeting, arranged in alphabetical order,with the address and the number of shares held by each, which list shall bekept on file at the registered office of the Corporation and shall be subjectto inspection by any stockholder at any time during usual business hours. Suchlist shall also be produced and kept open at the time and place of the meetingand shall be subject to the inspection of any stockholder during the whole timeof the meeting.

 

Section 13.             Addressof Stockholders. Each stockholder shall, in writing, at the time oforiginal issuance of each stock certificate notify the Secretary of theCorporation of the address to which notices relating to meetings and thebusiness of the Corporation may be sent. Changes in address shall be given inwriting to the Secretary. The most recent address of each stockholder appearingon the Corporation’s records shall be conclusively presumed to be the correctaddress, and notice mailed, charges prepaid by ordinary mail, to that addressshall be valid.

 

ARTICLE II.

 

DIRECTORS

 

Section 1.               Numberand Powers.  The property andbusiness of the Corporation shall be managed by a Board of Directors of notless than six (6) nor more than twenty five (25) Directors. The Board shallexercise every corporate right and power of the Corporation not hereinexpressly reserved to the stockholders, and the Board shall be authorized toincrease or decrease within said limits the number of Directors from time totime without the vote of the stockholders.

 

Section 2.               Eligibility.  Any person being the owner of not less thanone hundred and fifty (150) shares of stock of the Corporation shall beeligible as a Director.  No person shallbe considered eligible as a candidate for a Director at any stockholders’meeting, unless written notice of the nomination or candidacy shall have beenfiled with the Secretary of the Corporation, for the information of thestockholders, not less than one hundred and twenty (120) days prior to theelection.  Members of the then existingBoard of Directors are eligible for election as Directors and may be nominatedfor office without such notice being filed with the Secretary.

 

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Onlypersons so nominated or eligible as Directors may be voted for as candidatesfor Directors of the Corporation at an annual meeting or a special meeting forelection of Directors as provided in Section 5 of Article I of these By-Laws.

 

Section 3.               Termof Service of Directors.  At thefirst corporate election, the stockholders shall determine the number ofDirectors to be elected at such election. If such number be divisible by three, a third of such number shall beseverally elected for one, two and three year terms.  The assignment of Directors to the several terms to be determinedby lot by the judges of election.  Ifnot so divisible, one extra Director shall be elected to the shortest term anda second extra Director to the next shortest term. All subsequent electionsshall be for a three (3) year term and for a sufficient number to fill the termexpiring at such annual election. The stockholders may, at any annual election,determine the period of service of extra Directors to be elected at suchmeeting.  Each Director shall holdoffice, unless removed or disqualified for some cause, until the expiration ofthe term for which the Director was elected or until a successor shall bechosen, except as provided in paragraph (b) of Section 4 of this Article II.

 

Section 4.               Vacancieson Board of Directors.

 

(a)           Vacancies on theBoard of Directors or in nominees for election to membership on the Board ofDirectors occurring before the record date preceding the annual meeting, causedby death, resignation, disqualification or otherwise, may be filled by theremaining members of the Board even though less than a quorum. Each person soelected shall be a Director until the next annual meeting of the stockholders,and then a successor shall be chosen, except as provided in paragraph (b) ofthis Section 4.

 

(b)           Vacancies on theBoard of Directors or in nominees for election to membership on the Board ofDirectors occurring after the record date preceding the annual meeting, causedby death, removal, resignation, disqualification or otherwise, may also befilled by the remaining members of the Board even though less than a quorum. However,because of the time requirements relating to the preparation of proxymaterials, the term of the person filling the vacancy shall automaticallycontinue to, through and beyond the annual meeting and until the next annualmeeting thereafter and until a successor is chosen, qualified and takes office,when it shall terminate and that person seeks to continue in office for theunexpired portion of the term of office, if any.  The foregoing shall apply regardless of the length of the term ofthe office in which the vacancy occurred, except if the vacancy occurred in aterm ending at the annual meeting with respect to a person not intending toseek a new term and where a nomination is properly made before the record datefor the new term. In this latter instance, the nomination shall be disclosed tothe stockholders in a timely distributed proxy statement and the stockholdersshall vote at the annual election upon whether the nominee shall be elected afull term as a Director of the Corporation.

 

(c)           The Board ofDirectors shall be the sole judge as to when a vacancy has occurred on theBoard of Directors and it shall make the determination by majority vote of theentire Board. Continued unexcused absence for six (6) months, conviction of afelony, adjudication of

 

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incompetence,and such other grounds as are set forth in the Pennsylvania BusinessCorporation Law, as amended, shall be grounds for the Board of Directors toremove a Director or determine if a vacancy exists on the Board. Thedetermination of the Board may be appealed to the Court of Common Pleas ofSnyder County, Pennsylvania.

 

Section 5.               RegularMeetings of Directors.  Regularmeetings shall be held on such day and at such hour and place as agreed upon bya resolution adopted by a majority of the Board of Directors. The Directors mayfrom time to time, by resolution, change the time, place and number of suchmeetings.

 

Section 6.               Specialand Emergency Meetings of Directors.  Special meetings of the Board of Directors shall be all meetings otherthan regular meetings, and notice of the same shall be given at least twentyfour (24) hours before the time called for such meeting and at such meeting nobusiness shall be transacted for which notice was not given in the call.  Special meetings of the Board may at anytime be called by the President and shall be called whenever requested inwriting by not less than four (4) members of the Board, and in the absence,disability, or refusal of the President, any five (5) Directors may make suchcall.  In case of emergency, requiring,in the opinion of the President, prompt attention, the President may callspecial meetings of the Board at any time by giving the Directors notice bytelephone or messenger sent to the address of each Director.

 

Section 7.               InformalAction.  Any action which may betaken at a meeting of the Directors or the members of the Executive Committeeor other Committees of the Board of Directors may be taken without a meeting ifa consent or consents in writing setting forth the action so taken shall besigned by all Directors or the members of the Executive Committee or otherBoard Committee, as the case may be, and is filed with the Secretary of theCorporation.

 

Section 8.               RecordingVote.  All questions shall bedecided by a majority of the Directors present. On request of any Director, theyeas and nays shall be taken on any question and recorded in the minutes.

 

Section 9.               Orderof Business.  The order of businessat regular meetings of the Board shall be as follows or as altered by the Boardfrom time to time:

 

1.                                       Call to Order.

2.                                       Reading and approval of minutes of precedingmeeting.

3.                                       Review of financial statements.

4.                                       Reports of Committees.

5.                                       Business fixed for consideration at themeeting, and such as, in the opinion of the President, calls for action of theBoard.

6.                                       Reports of Chairman of the Board.

7.                                       Deferred business.

8.                                       New business.

9.                                       Adjournment.

 

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Section 10.             Quorum.  A majority of the whole number of Directorsshall constitute a quorum for the transaction of business, but a lesser numbermay meet and adjourn from time to time until a quorum shall be present. One ormore Directors may participate in a meeting of the Board by means of conferencetelephone or similar communications equipment by means of which all personsparticipating in the meeting can hear each other.

 

Section 11.             Duty ofDirector to Corporation.

 

(a)           A Director of theCorporation shall stand in a fiduciary relation to the Corporation and shallperform his duties as a Director, including his duties as a member of anycommittee of the Board of Directors upon which he may serve, in good faith, ina manner he reasonably believes to be in the best interests of the Corporation,and with such care, including reasonable inquiry, skill and diligence, as aperson of ordinary prudence would use under similar circumstances. Inperforming his duties, a Director shall be entitled to rely in good faith oninformation, opinions, reports or statements, including financial statementsand other financial data, in each case prepared or presented by any of thefollowing:

 

1.                                       One or more officers or employees of theCorporation whom the Director reasonably believes to be reliable and competentin the matters presented.

 

2.                                       Counsel, public accountants or other personsas to matters which the Director reasonably believes to be within theprofessional or expert competence of such person.

 

3.                                       A committee of the Board of Directors, uponwhich the Director does not serve, duly designated in accordance with law, asto matters within its designated authority, which committee the Directorreasonably believes to merit confidence.

 

A Director shall not be considered to be acting in good faith if he hasknowledge concerning the matter in question that would cause his reliance to beunwarranted.

 

(b)           In discharging theduties of their respective positions, the Board of Directors, committees of theBoard and individual Directors may, in considering the best interests of theCorporation, consider the effects of any action upon employees, upon suppliersand customers of the Corporation and upon communities in which offices or otherestablishments of the Corporation are located, and all other pertinent factors.The consideration of those factors shall not constitute a violation ofparagraph (a) of this Section 11.

 

(c)           Absent a breach offiduciary duty, lack of good faith or self-dealing, actions taken as a Directoror any failure to take any action shall be presumed to be in the best interestsof the Corporation.

 

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Section 12.             Limitationof Personal Liability of a Director. A Director of the Corporation shall not be personally liable formonetary damages as such for any action taken or for any failure to take anyaction, unless:

 

(i)                                     the Director has breached or failed toperform the duties of his office under the provisions of Section 11 of thisArticle II of these By-Laws (relating to standard of care and justifiablereliance); and

 

(ii)                                  the breach or failure to perform constitutesself-dealing, willful misconduct or recklessness.

 

The provisions of this Section 12 shall not apply to (i) theresponsibility or liability of a Director pursuant to any criminal statute, or(ii) the liability of a Director for the payment of taxes pursuant to local,state or federal laws. The provisions of this Section 12 shall be effectiveJanuary 27, 1987 but shall not apply to any action filed prior to that date norto any breach of performance of duty or failure of performance of duty by aDirector occurring prior to that date.

 

Section 13.             StockholderApproval Required to Amend Section 11 and Section 12.  Notwithstanding any other provisions ofthese By-Laws, the approval by the stockholders shall be required to amend,alter, change, repeal or adopt any provision as part of these By-Laws which isinconsistent with the purpose or intent of Sections 11 and 12 of this ArticleII.

 

ARTICLE III.

 

STANDING COMMITTEES

 

Section 1.               ExecutiveCommittee.  An Executive Committeemay be established by a resolution of the Board of Directors. The ExecutiveCommittee shall consist of the President, at least three (3) other Directors,appointed by the President and/or Chairman of the Board and any other officerso appointed.  When so determined by theBoard of Directors, the Executive Committee shall be annually constituted andits members shall serve until their successors are appointed. Vacancies duringthe year are to be filled by the President and/or Chairman of the Board ofDirectors at a regular or special meeting of the Board. The Executive Committeeshall meet whenever called by the President for the consideration andexamination of the current business of the Corporation.  All the powers and duties of the Board ofDirectors not herein excepted or delegated to the other Board committees orofficers of the Corporation shall be exercised and discharged during the recessof the said Board by the Executive Committee.

 

Section 2.               AuditCommittee.  An Audit Committee maybe established by resolution of the Board of Directors. The Audit Committeeshall consist of at least three (3) Directors to be appointed by the Presidentand/or Chairman of the Board. The Audit Committee shall recommend to the Boardof Directors their selection of an independent public accounting firm toexamine all the books and assets of the Corporation at least annually, andprepare a written report to the Board of Directors annually and at such othertimes as deemed necessary.

 

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Section 3.               PersonnelCommittee.  A Personnel Committeemay be established by resolution of the Board of Directors. The PersonnelCommittee shall consist of at least three (3) Directors to be appointed by thePresident and/or Chairman of the Board. The Personnel Committee shall be responsible to recommend to the Boardof Directors a yearly salary administration program and benefits program. Itwill also be their duty to oversee and evaluate approved programs, analyze andsuggest changes in the programs which will be beneficial to the Corporation andthe employees and officers.

 

Section 4.               OtherCommittees.  The Board of Directorsmay, by resolution passed by a majority of the whole Board, designate one ormore other committees or authorize the President to appoint such othercommittees as they deem the best interests of the Corporation require. Any suchcommittee shall consist of two (2) or more Directors and shall perform suchduties and exercise such authority as my be delegated to it in the resolutionof the Board.  Each Board committeeshall keep regular minutes of its proceedings and report the same to the Boardwhen required.

 

Section 5.               Donations.  The Board of Directors may authorize contributionsand donations for public, charitable, educational and like purposes permittedby law, in such amounts as it may from time to time determine.

 

Section 6.               Compensation.  The Board of Directors shall fix from timeto time the compensation payable to a Director for his service as Director.

 

ARTICLE IV.

 

OFFICERS

 

Section 1.               CorporationOfficers.  The officers of theCorporation shall be chosen by the Board of Directors and shall include aChairman, President, Secretary and Treasurer, and such other officers as theBoard of Directors may from time to time deem advisable for the best interestof the Corporation.  Any two (2) or moreoffices may be held by one person except President and Secretary.  All officers shall be elected annually atthe first meeting of the Board of Directors after their own election, or assoon thereafter as circumstances will permit.

 

Section 2.               TheChairman of the Board.  The Chairmanof the Board shall preside at the meetings of the Board and in general shallperform such duties as are incident to the office or are prescribed by theBoard and he may also serve as its chief executive officer.

 

Section 3.               ThePresident.  The President shall havegeneral supervision of all the departments and business of the Corporation andmay also be its chief executive officer. The President shall prescribe theduties of the other officers and employees, and see to the proper performancethereof.  In the absence of the Chairmanof the Board, the President shall preside at the meetings of the Board, and ingeneral shall perform all the acts incident to that office or prescribed by theBoard.

 

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Section 4.               TheVice President.  The Vice Presidentsshall perform such duties and do such acts as may be prescribed by thePresident, the Board of Directors, or the Executive Committee. The Chairman ofthe Board or the Vice Presidents shall perform the duties and have the powersof the President in the absence of the latter.

 

Section 5.               TheTreasurer.  The Treasurer shallreceive and take charge of all money, securities, and evidences of indebtednessbelonging to or coming into the Corporation. The Treasurer shall see thatproper accounts are kept and that proper reports are made to the Board ofDirectors, other officers, and other persons or authorities entitled thereto.The Treasurer shall deposit such of the funds of the Corporation as are to bedeposited in such other institution or institutions as are authorized by law,to receive the same and as may be designated as a depositor for such funds by amajority of all the members of the Board of Directors. The Treasurer shall alsoperform such other duties as are incident to the office of Treasurer and as mayfrom time to time be prescribed by the Board, the Executive Committee or thePresident.

 

Section 6.               TheSecretary.  The Secretary shall actunder the direction and superintendency of the President, may attend themeetings of the Board of Directors, its committees and the Corporation’sstockholders, and keep in suitable books the minutes thereof; shall have chargeof the records and papers of the Corporation; take charge of and affix the sealof the Corporation to such documents as may require attestation; issue noticesfor all meetings; may assist in the registry and transfer of all stocks ofwhich the Corporation is registrar or transfer agent, and perform the dutiesincident to the office of the Secretary and from time to time are prescribed bythe Board, the Executive Committee or President.

 

Section 7.               Terms ofOffice.  The officers of theCorporation shall hold office until their successors are chosen, qualify andtake office. Any officer elected or appointed by the Board of Directors may beremoved at any time by the affirmative vote of a majority of the Board.

 

ARTICLE V.

 

Section 1.               Dutiesand Authority of Officers.  TheChairman, President or the Vice Presidents, together with the Treasurer orSecretary and the other officers of the Corporation, are authorized to do andperform such corporate and official acts as are appropriate in the carrying onof the business of the Corporation, subject always to the directions of theBoard of Directors, Executive Committee and the President.

 

ARTICLE VI.

 

Section 1.               Dividends.  The Board of Directors may declare, subjectto the limitations prescribed by law, a dividend on the shares of theCorporation of so much of the profits as shall appear advisable to the Board,making the same payable at a time in their discretion.

 

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ARTICLE VII.

 

CORPORATION’S CERTIFICATES OF STOCK

 

Section 1.               Formof Stock Certificates.  Thecertificates of the capital stock of the Corporation shall be issued in suchform as the Board may direct, and shall be numbered and registered as they areissued, shall exhibit the holder’s name and the number of shares, and shall besigned by any two of the following:

 

President, Vice President, Treasurer, Secretary, Assistant Treasurer,Assistant Secretary and sealed with the seal of the Corporation

 

When a certificate is signed by a transfer agent or a registrar, thesignature of any such corporate officer may be a facsimile, engraved orprinted.  If any officer whose signatureappears on such certificate shall cease to be such officer of the Corporationfor any reason, such certificate may nevertheless be adopted by the Corporationand be issued and delivered with the same effect as though the person had notceased to be such officer of the Corporation.

 

Section 2.               RegisteredStockholder.  The Corporation shallbe entitled to treat the registered holder of any share as the absolute ownerthereof, and accordingly shall not be bound to recognize any equitable or otherclaim to, or interest in, such share on the part of any other person whether ornot it shall have express or other notice thereof.

 

Section 3.               Transferof Stock.  Transfer of stock shallbe made only on the books of the Corporation, in the presence of the Treasureror other authorized officer or agent of the Corporation, either by the holderin person, or by power of attorney to his attorney-in-fact and evidence ofauthority to make such transfer shall be produced to the Corporation.  In cases of transfers of stock by executors,administrators, guardians, or other legal representatives, duly authenticatedevidences of their authority shall also be provided to the Corporation.

 

Section 4.               Procedurefor Transfer of Stock.  No transfershall be made until the stock certificate(s) granted to the transferor isdelivered to the Corporation; and the possession of a certificate of stockshall not be regarded as vesting any ownership in the same in any other thanthe person in whose name(s) it is issued (as between the Corporation and suchholder) until the transfer be duly made upon the books of the Corporation, asaforesaid.  Upon the transfer andsurrender of any stock certificate, it shall be immediately canceled andaffixed to the margin of the certificate book from which it was originallytaken. A register shall be kept of every stock certificate issued showing thenumber thereof, the name of the party to whom it was issued and the number ofshares evidenced by each stock certificate which is issued, which registershall be kept by the Secretary of the Corporation. On the transfer andcancellation of any certificate of stock, the Secretary shall note the datethereof on the register of certificates, opposite the proper numbers, and marksuch certificate canceled.

 

Section 5.               LostCertificates.  If any personrequests that a certificate of stock of the

 

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Corporationbe issued in lieu of one lost or destroyed, that person shall make an affidavitor affirmation of the fact and therein state the circumstances of the loss ordestruction and that person shall advertise once a week for two (2) consecutiveweeks in a newspaper which circulates in Snyder County, giving an account ofthe loss or destruction, describing the certificate and its number and thenumber of shares specified in it, and calling on all persons to show cause whya new certificate shall not be issued by the Corporation, in lieu of the onelost or destroyed; and the person claiming the certificate shall transmit tothe Corporation the affidavit or affirmation and proof of publication from thenewspaper containing the advertisements, and give the Corporation a bond ofindemnity with one or more sureties, if so required, in the sum of not lessthan double the market value of the stock for each share of stock to be issued,against any damage that may arise from issuing the new certificate, whereupon,a new certificate shall be issued. The Corporation’s Board of Directors mayrevise this policy concerning lost stock certificates.

 

ARTICLE VIII.

 

BONDING OF OFFICERS AND EMPLOYEES

 

Section 1.               Bondingof Officers and Employees.  Theofficers and employees of the Corporation may be required to give bond withapproved sureties in such sum as the Board of Directors may determine.  No Directors or officer shall be surety insuch bond and these bonds shall be in the custody of the President, (except thebond of the President which shall be held by the Secretary of the Corporation)who shall report their sufficiency annually or more often to the Board andthese bonds shall be retained by the Corporation for two (2) years after thepersons giving the same shall have left its service.

 

ARTICLE IX.

 

SURETYSHIP BY THE CORPORATION

 

Section 1.               Suretyshipby the Corporation.  The Corporationmay become sole surety in any case when by law one or more sureties may berequired for the faithful performance of any trust or office and may demand thedeposit of such securities or property as may in the opinion of the Presidentand Board of Directors sufficient to the Corporation for becoming such surety.

 

ARTICLE X.

 

INDEMNIFICATION

 

Section 1.               Indemnificationof Directors, Officers, Employees and Agents.

 

(a)           The Corporationshall indemnify any Director or officer, and may indemnify any

 

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otheremployee or agent, who was or is a party to, or is threatened to be made aparty to or who is called as a witness in connection with any threatened,pending or completed action, suit or proceeding, whether civil, criminal,administrative or investigative, including an action by or in the right of theCorporation, by reason of the fact that he is or was a Director, officer,employee or agent of the Corporation, or is or was serving at the request ofthe Corporation as a Director, officer, employee or agent of anotherCorporation, partnership, joint venture, trust or other enterprise, againstexpenses, including attorneys’ fees, judgments, fines and amounts paid insettlement actually and reasonably incurred by him in connection with suchaction, suit or proceeding unless the act or failure to act giving rise to theclaim for indemnification is determined by a court to have constituted willfulmisconduct or recklessness. The discretionary authority granted by thisparagraph (a) shall be exercised by the Board of Directors.

 

(b)           The Corporation shallpay expenses incurred by a Director or officer and may pay expenses incurred byany other employee or agent, in defending a civil or criminal action, suit orproceeding in advance of the final disposition of such action, suit orproceeding upon receipt of an undertaking by or on behalf of such person torepay such amount if it shall ultimately be determined that he is not entitledto be indemnified by the Corporation. The discretionary authority granted bythis paragraph (b) shall be exercised by the Board of Directors.

 

(c)           The indemnificationand advancement of expenses provided by or granted pursuant to this Section 1shall not be deemed exclusive of any other rights to which those seekingindemnification or advancement of expenses may be entitled under any By-Law,agreement, contract, vote of stockholders or Directors or pursuant to thedirection, howsoever embodied, of any court of competent jurisdiction orotherwise, both as to action in his official capacity and as to action inanother capacity while holding such office. It is the policy of the Corporation that indemnification of, andadvancement of expenses to, Directors and officers of the Corporation shall bemade to the fullest extent permitted by law, including without limitation, thelaw of Pennsylvania. To this end, the provisions of this Section 1 shall bedeemed to have been amended for the benefit of Directors and officers of theCorporation, effective immediately upon any modification of the BusinessCorporation Law of the Commonwealth of Pennsylvania (the “Business CorporationLaw”) or the Directors’ Liability Act of the Commonwealth of  Pennsylvania (the “Directors’ LiabilityAct”) or any other applicable law which expands or enlarges the power ofobligation of Corporations organized under the Business Corporation Law orsubject to the Directors’ Liability Act to indemnify, or advance expenses toDirectors and officers of the Corporation.

 

(d)           The indemnificationand advancement of expenses provided by, or granted pursuant to this Section 1shall, unless otherwise provided when authorized or ratified, continue as to aperson who has ceased to be a Director, officer, employee or agent of theCorporation and shall inure to the benefit of the heirs, executors andadministrators of such person.

 

(e)           The Corporationshall have the authority to create a fund of any nature, which may, but neednot be, under the control of a trustee, or otherwise secure or insure in anymanner, its indemnification obligations, whether arising under these By-Laws orotherwise. This authority

 

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shallinclude, without limitation, the authority to (i) deposit funds in trust or inescrow, (ii) establish any form of self-insurance, (iii) secure its indemnityobligation by grant of a security interest, mortgage or other lien on theassets of the Corporation or (iv) establish a letter of credit, guaranty orsurety agreement for the benefit of such persons in connection with theanticipated indemnification or advancement of expenses contemplated in thisSection 1. The provisions in this Section 1 shall not be deemed to preclude theindemnification of, or advancement of expenses to, any person who is notspecified in this Section 1 but whom this Corporation has the power or obligationto indemnify, or to advance expenses for, under the provisions of the BusinessCorporation Law or the Directors’ Liability Act or otherwise. The authoritygranted by this paragraph (e) shall be exercised by the Board of Directors ofthe Corporation.

 

(f)            Notwithstanding anyother provision of these By-Laws, any amendment, alteration, change, repeal oradoption of any provision of these By-Laws, which diminishes, impairs orotherwise adversely affects any right of indemnification or advancement ofexpenses under this Section 1 shall be effective only with regard to claim ofright of indemnification or advancement of expenses arising from transactions,acts or omissions occurring on or after the effective date of such amendment,alteration, change, repeal or adoption and shall not diminish, impair orotherwise adversely affect any claims of right of indemnification oradvancement of expenses arising from transactions, acts or omissions occurringprior to the effective date of such amendment, alteration, change, repeal oradoption.

 

(g)           Each person who is aDirector or officer and when authorized by the Board of Directors, eachemployee and agent of the Corporation shall be deemed to be acting in relianceupon the rights of indemnification provided by this Section 1. All rights toindemnification under this Section 1 shall be deemed a contract between theCorporation and person or entity indemnified pursuant to which the Corporationand each person intend to be legally bound.

 

(h)           Notwithstanding anyother provision of this Section 1, the Corporation shall not indemnify underthis Section, a Director, officer, employee or agent for any liability incurredin a proceeding initiated (which shall not be deemed to include counterclaimsor affirmative defenses) or participated in as an intervenor or amicus curiaeby the person seeking indemnification, unless such initiation of orparticipation in the proceeding is authorized, either before or after itscommencement, by the affirmative vote of a majority of the Directors in office.This paragraph (h) does not apply to reimbursement of expenses incurred insuccessfully prosecuting or defending the rights of an indemnified persongranted by or pursuant to this Section 1.

 

(i)            The provisions ofthis Section 1 have been adopted by the stockholders of the Corporation and areintended to constitute By-Laws authorized by Section 410F of the BusinessCorporation Law and the Directors’ Liability Act.

 

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ARTICLE XI.

 

GENERAL PROVISIONS

 

Section 1.               FinancialReports.  Subject to the requirementof applicable law, the Board of Directors shall have discretion to determinewhether financial reports shall be sent to stockholders, what such reportsshall contain, and whether such reports shall be audited or accompanied by thereport of an independent or certified public accountant.

 

Section 2.               CorporateSeal.  The common or corporate sealof the Corporation is and, until otherwise ordered by the Board of Directors,shall be an impression upon paper or wax bearing words, SUN BANCORP, INC., inthe form impressed hereon. A facsimile of the corporate seal of the Corporationmy be used whenever lawful.

 

Section 3.               FiscalYear.  The fiscal year of theCorporation shall be fixed by resolution of the Board of Directors.

 

Section 4.               Checks.  All checks or demands for money and notesof  the Corporation shall be signed bysuch officer or officers or such other person or persons as the Board ofDirectors may from time to time designate.

 

 

Section 5.               Waiverof Notice.  Whenever any notice isrequired to be given under the provisions of the statutes or these By-Laws, awaiver thereof in writing signed by the person or persons entitled to saidnotice, whether before or after the time stated thereon, shall be deemedequivalent to the giving of such notice. Attendance of a person, either in person or by proxy, at any meetingshall constitute a waiver of notice of such meeting.

 

Section 6.               Participationin Meetings via Communications Equipment. One or more Directors’ may participate in a meeting of the Board ofDirectors (or a committee thereof) by means of conference telephone or othercommunications equipment by means of which all persons participating in themeeting can hear each other.  A Directorparticipating in a meeting by such a means shall be deemed to be present inperson at the meeting for all purposes, including without limitation, forpurposes of determining whether a quorum is present at the meeting and forvoting on any matters before the meeting.

 

ARTICLE XII.

 

AMENDMENTS OF BY-LAWS

 

Section 1.               Amendmentof By-Laws.  The authority to make,amend or repeal these By-Laws shall be vested in the Board of Directors by amajority vote of the whole Board, subject to the power of the stockholders tochange or repeal such By-Laws by a vote of seventy five percent (75%) or moreof shares, entitled to vote in the election of Directors, in favor of anyamendment of these By-Laws, which is opposed by the Board of Directors.  If the Board of 

 

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Directorsapproves a proposed amendment of these By-Laws by a vote of at least threefourths (3/4) of its members, then a vote of at least sixty six and two thirdspercent (66 2/3%) of the shares entitled to vote in the election of Directorsis required to authorize such an amendment to these By-Laws.

 

ARTICLE XIII.

 

OPT OUT AND NONAPPLICABILITY OF SUBSECTIONS (d) THROUGH (f) OFSECTION 511, SUBSECTIONS (e) THROUGH (g) OF SECTION 1721 OF THEBUSINESSCORPORATION LAW OF 1988, AS ADDED AND AMENDED BY ACT 36, ANDSUBCHAPTER G AND SUBCHAPTER H OF CHAPTER 25 OF THE BUSINESSCORPORATION LAW OF 1988 AS ADDED AND AMENDED BY ACT 36 OF 1990

 

Section 1.               OptOut and Nonapplicability of Subsections (d) through (f) of Section 511 andSubsections (e) through (g) of Section 1721 and Subchapters G and H.  This Corporation specifically opts out andshall not be governed by Subsections (d) through (f) of Section 511,Subsections (e) through (g) of Section 1721, pertaining to Standards of Careand Fiduciary Duties of Directors, of the Business Corporation Law of 1988, asadded and amended by Act 36 of 1990, and Subchapter G, Control-shareAcquisitions, and Subchapter H, Disgorgement by Certain ControllingShareholders Following Attempts to Acquire Control, of Chapter 25 of theBusiness Corporation Law of 1988, as added and amended by Act 36 of 1990.  Subsections (d) through (f) of Section 511,Subsections (e) through (g) of Section 1721, pertaining to Standards of Careand Fiduciary Duties of Directors, of the Business Corporation Law of 1988, asadded and amended by Act 36 of 1990, and Subchapter G, Control-shareAcquisitions, and Subchapter H, Disgorgement by Certain ControllingShareholders Following Attempts to Acquire Control, of Chapter 25 of theBusiness Corporation Law of 1988, as added and amended by Act 36 of 1990, shallnot be applicable to the Corporation.

 

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