EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
NORTHFIELD BANCORP, INC.
The undersigned, G. Ronald Jobson, whose address is 8005 Harford Road,
Baltimore, Maryland 21234, being at least 18 years of age, acting as
incorporator, does hereby form a corporation under the General Laws of the State
of Maryland having the following Articles of Incorporation:
ARTICLE I
Name
The name of the corporation is Northfield Bancorp, Inc. (herein the
"Corporation").
ARTICLE II
Principal Office
The address of the Corporation's principal office in the State of Maryland
is 8005 Harford Road, Baltimore, Maryland 21234, or such other place as may be
designated in the bylaws of the Corporation.
ARTICLE III
Powers
The purpose for which the Corporation is organized is to act as a financial
institution holding company and to transact all other lawful business for which
corporations may be incorporated pursuant to the General Laws of the State of
Maryland. The Corporation shall have all the powers of a corporation organized
under the General Laws of the State of Maryland.
ARTICLE IV
Resident Agent
The name and mailing address of the initial resident agent of the
Corporation in the State of Maryland is G. Ronald Jobson, 8005 Harford Road,
Baltimore, Maryland 21234. The resident agent is a citizen of the State of
Maryland.
ARTICLE V
Initial Directors
The number of directors constituting the initial board of directors of the
Corporation is six, which number may be increased or decreased pursuant to the
bylaws of the Corporation and Article XI of these Articles, but shall never be
less than the minimum number permitted by the General Laws of the State of
Maryland now or hereafter in force. The names of the persons who are to serve
as directors until the first annual meeting and until their successors are
elected and qualified, are:
Name
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Gary R. Bozel
J. Thomas Hoffman
G. Ronald Jobson
E. Thomas Lawrence, Jr.
David G. Rittenhouse
William R. Rush
ARTICLE VI
Capital Stock
The aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 10,000,000, of which 8,000,000 are to be
shares of common stock, $.01 par value per share, and of which 2,000,000 are to
be shares of serial preferred stock, $.01 par value per share. The aggregate
par value of all shares of capital stock is $100,000. The shares may be issued
by the Corporation from time to time as approved by the board of directors of
the Corporation without the approval of the stockholders except as otherwise
provided in this Article VI or to the extent that such approval is required by
governing law, rule or regulation. The consideration for the issuance of the
shares shall be paid to or received by the Corporation in full before their
issuance and shall not be less than the par value per share. The consideration
for the issuance of the shares, other than cash, shall be determined by the
board of directors in accordance with the General Laws of the State of Maryland.
In the absence of actual fraud in the transaction, the judgment of the board of
directors as to the value of such consideration shall be conclusive. Upon
payment of such consideration such shares shall be deemed to be fully paid and
nonassessable. In the case of a stock dividend or stock split, the part of the
surplus of the Corporation which is transferred to stated capital upon the
issuance of shares as a stock dividend or stock split shall be deemed to be the
consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in these Articles, the holders of the
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common stock shall exclusively possess all voting power. Each holder of shares
of common stock shall be entitled to one vote for each share held by such
holder.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the common stock as to the payment of dividends, the full amount of
dividends and sinking fund or retirement fund or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock, and on any class or
series of stock entitled to participate therewith as to dividends, out of any
assets legally available for the payment of dividends, but only as declared by
the board of directors of the Corporation.
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In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class having preference
over the common stock in any such event, the full preferential amounts to which
they are respectively entitled, the holders of the common stock and of any class
or series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.
Each share of common stock shall have the same relative powers, preferences
and rights as, and shall be identical in all respects with, all the other shares
of common stock of the Corporation.
B. Serial Preferred Stock. Except as provided in these Articles, the
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board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of each such series, and the qualifications, limitations or restrictions
thereof, including, but not limited to determination of any of the following:
1. the distinctive designation and the number of shares constituting such
class or series;
2. the dividend rates or the amount of dividends to be paid on the shares
of such class or series, whether dividends shall be cumulative and, if so, from
which date or dates, the payment date or dates for dividends, and the
participating or other special rights, if any, with respect to dividends;
3. the voting powers, full or limited, if any, of the shares of such class
or series;
4. whether the shares of such class or series shall be redeemable and, if
so, the price or prices at which, and the terms and conditions upon which such
shares may be redeemed;
5. the amount or amounts payable upon the shares of such class or series
in the event of voluntary or involuntary liquidation, dissolution or winding up
of the Corporation;
6. whether the shares of such class or series shall be entitled to the
benefits of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and, if so entitled, the amount of such fund and the
manner of its application, including the price or prices at which such shares
may be redeemed or purchased through the application of such funds;
7. whether the shares of such class or series shall be convertible into,
or exchangeable for, shares of any other class or classes or any other series of
the same or any other class or classes of stock of the Corporation and, if so
convertible or exchangeable, the conversion price or prices, or the rate or
rates of exchange, and the adjustments thereof, if any, at which such conversion
or exchange may be made, and any other terms and conditions of such conversion
or exchange;
8. the subscription or purchase price and form of consideration for which
the shares of such class or series shall be issued;
9. whether the shares of such class or series which are redeemed or
converted shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of the same or
any other class or series; and
10. any other preferences, rights, restrictions, including restrictions on
transferability, and qualifications of shares of such class or series, not
inconsistent with law and these Articles.
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Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of preferred stock of the same series.
ARTICLE VII
Preemptive Rights
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of any class or series or carrying
any right to purchase stock of any class or series, but any such unissued stock,
bonds, certificates or indebtedness, debentures or other securities convertible
into or exchangeable for stock or carrying any right to purchase stock may be
issued pursuant to resolution of the board of directors of the Corporation to
such persons, firms, corporations or associations, whether or not holders
thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.
ARTICLE VIII
Repurchase of Shares
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences of indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE IX
Meetings of Stockholders; Cumulative Voting
A. Any action required to be taken or which may be taken at any meeting of
stockholders of the Corporation may be taken without a meeting if a consent in
writing setting forth the action so taken shall be signed by all of the
stockholders entitled to vote with respect to the subject matter thereof and if
a written waiver of any right to dissent is signed by each stockholder entitled
to notice of the meeting but not entitled to vote at it.
B. Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the chairman of the board, by
the president, by the board of directors of the Corporation, by a committee of
the board of directors which has been duly designated by the board of directors
and whose powers and authorities, as provided in a resolution of the board of
directors or in the bylaws of the Corporation, include the power and authority
to call such meetings, or by the holders of not less than 25% of all the
outstanding shares entitled to vote on the matter for which the meeting is
called, but such special meetings may not be called by any other person or
persons. Unless requested by stockholders entitled to cast a majority of all
the votes entitled to be cast at the meeting, a special meeting need not be
called to consider any matter which is substantially the same as a matter voted
on at any special meeting of the stockholders held during the preceding 12
months.
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C. There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.
D. Meetings of stockholders may be held at any place within the United
States as the bylaws may provide.
ARTICLE X
Notice for Nominations and Proposals
A. Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders may be
made by the board of directors of the Corporation or by any stockholder of the
Corporation entitled to vote generally in the election of directors. In order
for a stockholder of the Corporation to make any such nominations and/or
proposals, he or she shall give notice thereof in writing, delivered or mailed
by first class United States mail, postage prepaid, to the secretary of the
Corporation not less than 30 days nor more than 60 days prior to any such
meeting; provided, however, that if less than 40 days' notice of the meeting is
given to stockholders, such written notice shall be delivered or mailed, as
prescribed, to the secretary of the Corporation not later than the close of the
tenth day following the day on which notice of the meeting was mailed to
stockholders. Each such notice given by a stockholder with respect to
nominations for the election of directors shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee. In addition, the stockholder making
such nomination shall promptly provide any other information reasonably
requested by the Corporation.
B. Each such notice given by a stockholder to the secretary of the
Corporation with respect to business proposals to bring before a meeting shall
set forth in writing as to each matter: (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting; (ii) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business; (iii) the
class and number of shares of the Corporation which are beneficially owned by
the stockholder; and (iv) any material interest of the stockholder in such
business. Notwithstanding anything in these Articles to the contrary, no
business shall be conducted at the meeting except in accordance with the
procedures set forth in this Article X.
C. The chairman of the annual or special meeting of stockholders may, if
the facts warrant, determine and declare to such meeting that a nomination or
proposal was not made in accordance with the foregoing procedure, and, if he
should so determine, he shall so declare to the meeting and the defective
nomination or proposal shall be disregarded and laid over for action at the next
succeeding adjourned, special or annual meeting of the stockholders taking place
thirty days or more thereafter. This provision shall not require the holding of
any adjourned or special meeting of stockholders for the purpose of considering
such defective nomination or proposal.
ARTICLE XI
Directors
A. Number; Vacancies. The number of directors of the Corporation shall be
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such number, not less than five nor more than fifteen (exclusive of directors,
if any, to be elected by holders of preferred stock of the Corporation, voting
separately as a class), as shall be provided from time to time in or in
accordance with the bylaws, provided that no action shall be taken to decrease
or increase the number of directors unless at least two-thirds of the directors
then in office shall concur in said action, and further provided that no
increase or decrease in the number of directors shall affect the tenure of
office of any director. Subject to the rights of the holders of any class of
preferred stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any
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vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be filled
by a majority vote of the stockholders or the directors then in office. A
director so chosen by the stockholders shall hold office for the balance of the
term then remaining. A director so chosen by the remaining directors shall hold
office until the next annual meeting of stockholders and until his successor is
elected and qualifies, at which time the stockholders shall elect a director to
hold office for the balance of the term then remaining.
B. Classified Board. At the first annual meeting of stockholders of the
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Corporation, the board of directors of the Corporation shall be divided into
three classes as nearly equal in number as the then total number of directors
constituting the entire board of directors shall permit, which classes shall be
designated Class I, Class II and Class III. At such annual meeting of
stockholders, directors assigned to Class I shall be elected to hold office for
a term expiring at the first succeeding annual meeting of stockholders
thereafter, directors assigned to Class II shall be elected to hold office for a
term expiring at the second succeeding annual meeting thereafter, and directors
assigned to Class III shall be elected to hold office for a term expiring at the
third succeeding annual meeting thereafter. Thereafter, at each annual meeting
of stockholders of the Corporation, directors of classes the terms of which
expire at such annual meeting shall be elected for terms of three years.
Notwithstanding the foregoing, a director whose term shall expire at any annual
meeting shall continue to serve until such time as his successor shall have been
duly elected and shall have qualified unless his position on the board of
directors shall have been abolished by action taken to reduce the size of the
board of directors prior to said meeting.
Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the immediately
preceding paragraph. The board of directors shall designate, by the name of the
incumbent(s), the position(s) to be abolished. Notwithstanding the foregoing,
no decrease in the number of directors shall have the effect of shortening the
term of any incumbent director. Should the number of directors of the
Corporation be increased, the additional directorships shall be allocated among
classes as appropriate so that the number of directors in each class is as
specified in the immediately preceding paragraph.
Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the board of directors shall consist of said
directors so elected in addition to the number of directors fixed as provided
above in this Article XI. Notwithstanding the foregoing, and except as
otherwise may be required by law and provisions of the preferred stock of the
Corporation, whenever the holders of any one or more series of preferred stock
of the Corporation shall have the right, voting separately as a class, to elect
one or more directors of the Corporation, the terms of the director or directors
elected by such holders shall expire at the next succeeding annual meeting of
stockholders.
ARTICLE XII
Removal of Directors
Notwithstanding any other provision of these Articles or the bylaws of the
Corporation, any director or the entire board of directors of the Corporation
may be removed at any time, but only for cause and only by the affirmative vote
of the holders of at least 80% of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at a meeting of the stockholders called for
that purpose. Notwithstanding the foregoing, whenever the holders of any one or
more series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
preceding provisions of this Article XII shall not apply with respect to the
director or directors elected by such holders of preferred stock.
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ARTICLE XIII
Acquisition of Capital Stock
A. Five-Year Prohibition. For a period of five years from the effective
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date of the completion of the conversion of Northfield Federal Savings (the
"Bank") from mutual to stock form (which entity shall become a wholly owned
subsidiary of the Corporation upon such conversion), no person shall directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of any class of equity security of the Corporation, unless such offer or
acquisition shall have been approved in advance by a two-thirds vote of the
Continuing Directors, as defined in Article XIV. In addition, for a period of
five years from the completion of the conversion of the Bank from mutual to
stock form (which entity shall become a wholly owned subsidiary of the
Corporation upon such conversion), and notwithstanding any provision to the
contrary in these Articles or in the bylaws of the Corporation, where any person
directly or indirectly acquires beneficial ownership of more than 10% of any
class of equity security of the Corporation in violation of this Article XIII,
the securities beneficially owned in excess of 10% shall not be counted as
shares entitled to vote, shall not be voted by any person or counted as voting
shares in connection with any matter submitted to the stockholders for a vote,
and shall not be counted as outstanding for purposes of determining a quorum or
the affirmative vote necessary to approve any matter submitted to the
stockholders for a vote.
B. Prohibition after Five Years. If, at any time after five years from
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the effective date of the completion of the conversion of the Bank from mutual
to stock form (which entity shall become a wholly owned subsidiary of the
Corporation upon such conversion), any person shall acquire the beneficial
ownership of more than 10% of any class of equity security of the Corporation
without the prior approval by a two-thirds vote of the Continuing Directors, as
defined in Article XIV, then the record holders of voting stock of the
Corporation beneficially owned by such acquiring person shall have only the
voting rights set forth in this paragraph B on any matter requiring the vote or
consent of shareholders. With respect to each vote in excess of 10% of the
voting power of the outstanding shares of voting stock of the Corporation which
such record holders would otherwise be entitled to cast without giving effect to
this paragraph B, the record holders in the aggregate shall be entitled to cast
only one-hundredth of a vote, and the aggregate voting power of such record
holders, so limited for all shares of voting stock of the Corporation
beneficially owned by such acquiring person, shall be allocated proportionately
among such record holders. For each such record holder, this allocation shall
be accomplished by multiplying the aggregate voting power, prior to imposing the
limitations of this paragraph B, of the outstanding shares of voting stock of
the Corporation beneficially owned by such record holder by a fraction whose
numerator is the number of votes equal to 10% of the shares of voting stock of
the Corporation and whose denominator is the total number of votes represented
by the shares of voting stock of the Corporation that are beneficially owned by
such acquiring person; any share held by such record holder in excess of the
allocated amount as determined in accordance with the previous clause shall be
entitled to cast one-hundredth of a vote. A person who is a record owner of
shares of voting stock of the Corporation that are beneficially owned
simultaneously by more than one person shall have, with respect to such shares,
the right to cast the least number of votes that such person would be entitled
to cast under this paragraph B by virtue of such shares being so beneficially
owned by any of such acquiring persons.
C. Definitions. The term "person" means an individual, a group acting in
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concert, a corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate or any
other group acting in concert formed for the purpose of acquiring, holding,
voting or disposing of securities of the Corporation. The term "acquire"
includes every type of acquisition, whether effected by purchase, exchange,
operation of law or otherwise. The term group "acting in concert" includes (a)
knowing participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, and (b) a
combination or pooling of voting or other interest in the Corporation's
outstanding shares for a common purpose, pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise. The term "beneficial ownership" shall have the meaning defined in
Rule 13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended, as in effect on the date of filing of these Articles.
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D. Exclusion for Employee Benefit Plans, Directors, Officers, Employees
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and Certain Proxies. The restrictions contained in this Article XIII shall not
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apply to (i) any underwriter or member of an underwriting or selling group
involving a public sale or resale of securities of the Corporation or a
subsidiary thereof; provided, however, that upon completion of the sale or
resale of such securities, no such underwriter or member of such selling group
is a beneficial owner of more than 10% of any class of equity security of the
Corporation, (ii) any proxy granted to one or more Continuing Directors, as
defined in Article XIV, by a stockholder of the Corporation or (iii) any
employee benefit plans of the Corporation or a subsidiary thereof. In addition,
the Continuing Directors of the Corporation, the officers and employees of the
Corporation and its subsidiaries, the directors of subsidiaries of the
Corporation, the employee benefit plans of the Corporation and its subsidiaries,
entities organized or established by the Corporation or any subsidiary thereof
pursuant to the terms of such plans and trustees and fiduciaries with respect to
such plans acting in such capacity shall not be deemed to be a group with
respect to their beneficial ownership of voting stock of the Corporation solely
by virtue of their being directors, officers or employees of the Corporation or
a subsidiary thereof or by virtue of the Continuing Directors of the
Corporation, the officers and employees of the Corporation and its subsidiaries
and the directors of subsidiaries of the Corporation being fiduciaries or
beneficiaries of an employee benefit plan of the Corporation or a subsidiary of
the Corporation. Notwithstanding the foregoing, no director, officer or
employee of the Corporation or any of its subsidiaries or group of any of them
shall be exempt from the provisions of this Article XIII should any such person
or group become a beneficial owner of more than 10% of any class of equity
security of the Corporation.
E. Determinations. A majority of the Continuing Directors, as defined in
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Article XIV, shall have the power to construe and apply the provisions of this
Article XIII and to make all determinations necessary or desirable to implement
such provisions, including but not limited to matters with respect to (a) the
number of shares beneficially owned by any person, (b) whether a person has an
agreement, arrangement or understanding with another as to the matters referred
to in the definition of beneficial ownership, (c) the application of any other
definition or operative provision of this Article XIII to the given facts or (d)
any other matter relating to the applicability or effect of this Article XIII.
Any constructions, applications, or determinations made by the Continuing
Directors pursuant to this Article XIII in good faith and on the basis of such
information and assistance as was then reasonably available for such purpose
shall be conclusive and binding upon the Corporation and its stockholders.
ARTICLE XIV
Approval of Certain Business Combinations
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.
A. (1) Except as otherwise expressly provided in this Article XIV, the
affirmative vote of the holders of (i) at least 80% of the outstanding
shares entitled to vote thereon (and, if any class or series of shares is
entitled to vote thereon separately, the affirmative vote of the holders of
at least 80% of the outstanding shares of each such class or series), and
(ii) at least a majority of the outstanding shares entitled to vote
thereon, not including shares deemed beneficially owned by a Related Person
(as hereinafter defined), shall be required in order to authorize any of
the following:
(a) any merger, consolidation or share exchange of the
Corporation with or into a Related Person (as hereinafter defined);
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) of
all or any Substantial Part (as hereinafter defined) of the assets of
the Corporation (including without limitation any voting securities of
a subsidiary) or of a subsidiary, to a Related Person;
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(c) any merger, consolidation or share exchange of a Related
Person with or into the Corporation or a subsidiary of the
Corporation;
(d) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) of
all or any Substantial Part of the assets of a Related Person to the
Corporation or a subsidiary of the Corporation;
(e) the issuance of any securities of the Corporation or a
subsidiary of the Corporation to a Related Person;
(f) the acquisition by the Corporation or a subsidiary of the
Corporation of any securities of a Related Person;
(g) any reclassification of the common stock of the Corporation,
or any recapitalization involving the common stock of the Corporation;
and
(h) any agreement, contract or other arrangement providing for
any of the transactions described in this Article XIV.
(2) Such affirmative vote shall be required notwithstanding any other
provision of these Articles, any provision of law, or any agreement with
any regulatory agency or national securities exchange or interdealer
securities system which might otherwise permit a lesser vote or no vote.
(3) The term "Business Combination" as used in this Article XIV shall
mean any transaction which is referred to in any one or more of
subparagraphs A(1)(a) through (h) above.
B. The provisions of paragraph A shall not be applicable to any
particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by any other provision of this
certificate, any provision of law, or any agreement with any regulatory agency
or national securities exchange or interdealer securities system, if the
Business Combination shall have been approved by a two-thirds vote of the
Continuing Directors (as hereinafter defined); provided, however, that such
approval shall only be effective if obtained at a meeting at which a Continuing
Director Quorum (as hereinafter defined) is present.
C. For the purposes of this Article XIV the following definitions apply:
(1) The term "Related Person" shall mean and include (a) any
individual, corporation, partnership or other person or entity which
together with its "affiliates" (as that term is defined in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of
1934, as amended), "beneficially owns" (as that term is defined in Rule
13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended) in the aggregate 10% or more of the outstanding
shares of the common stock of the Corporation; and (b) any "affiliate" (as
that term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended) of any such individual, corporation, partnership or other
person or entity. Without limitation, any shares of the common stock of
the Corporation which any Related Person has the right to acquire pursuant
to any agreement, or upon exercise or conversion rights, warrants or
options, or otherwise, shall be deemed "beneficially owned" by such Related
Person.
(2) The term "Substantial Part" shall mean more than 25 percent of the
total assets of the Corporation, as of the end of its most recent fiscal
year ending prior to the time the determination is made.
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(3) The term "Continuing Director" shall mean any member of the board
of directors of the Corporation who is unaffiliated with the Related Person
and was a member of the board prior to the time that the Related Person
became a Related Person, and any successor of a Continuing Director who is
unaffiliated with the Related Person and is recommended to succeed a
Continuing Director by a majority of Continuing Directors then on the
board.
(4) The term "Continuing Director Quorum" shall mean a majority of the
Continuing Directors capable of exercising the powers conferred on them.
ARTICLE XV
Evaluation of Business Combinations
In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the stockholders, when evaluating a
Business Combination (as defined in Article XIV hereof) or a tender or exchange
offer, the board of directors of the Corporation may, in addition to considering
the adequacy of the amount to be paid in connection with any such transaction,
consider all of the following factors and any other factors which it deems
relevant; (i) the social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and other
customers, creditors and other elements of the communities in which the
Corporation and its subsidiaries operate or are located; (ii) the business and
financial condition and earnings prospects of the acquiring person or entity,
including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
acquisition, and other likely financial obligations of the acquiring person or
entity, and the possible effect of such conditions upon the Corporation and its
subsidiaries and the other elements of the communities in which the Corporation
and its subsidiaries operate or are located; and (iii) the competence,
experience, and integrity of the acquiring person or entity and its or their
management.
ARTICLE XVI
Limitation of Officers' and Directors' Liability
An officer or director of the Corporation, as such, shall not be liable to
the Corporation or its stockholders for money damages, except (i) to the extent
that it is proved that the person actually received an improper benefit or
profit in money, property or services for the amount of the benefit or profit in
money, property or services actually received; (ii) to the extent that a
judgment or other final adjudication adverse to the person is entered in a
proceeding based on a finding in the proceeding that the person's action, or
failure to act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding; or (iii) to the
extent otherwise required by Maryland law. If Maryland law is amended or
enacted after the date of filing of these Articles to further eliminate or limit
the personal liability of officers and directors, then the liability of officers
and directors of the Corporation shall be eliminated or limited to the fullest
extent permitted by Maryland law, as so amended. Any repeal or modification of
the foregoing paragraph 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.
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ARTICLE XVII
Indemnification
A. The Corporation shall indemnify, to the fullest extent permissible
under the Maryland General Corporation Law, any individual who is or was a
director, officer, employee or agent of the Corporation, and any individual who
serves or served at the Corporation's request as a director, officer, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan, in any proceeding in which the
individual is made a party as a result of his service in such capacity.
B. (1) Reasonable expenses incurred by any person identified in paragraph
A of this Article XVII who is a party to a proceeding will be paid or reimbursed
by the Corporation in advance of the final disposition of the proceeding upon
receipt by the Corporation of: (i) a written affirmation by such person of his
good faith belief that the standard of conduct necessary for indemnification by
the Corporation as authorized in this Article XVII has been met; and (ii) a
written undertaking by or on behalf of such person to repay the amount if it
shall ultimately be determined that the standard of conduct has not been met.
(2) The undertaking required by subparagraph (ii) of paragraph (1) of
this subsection shall be an unlimited general obligation of such person but need
not be secured and may be accepted without reference to financial ability to
make the repayment.
C. Nonexclusive. The indemnification and advance payment of expenses
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provided by paragraphs A and B shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
D. Continuation. The indemnification and advancement of expenses provided
------------
by this Article XVII shall be deemed to be a contract between the Corporation
and the persons entitled to indemnification thereunder, and any repeal or
modification of this Article XVII shall not affect any rights or obligations
then existing with respect to any state of facts then or theretofore existing or
any action, suit or proceeding theretofore or thereafter brought based in whole
or in part upon any such state of facts. The indemnification and advance
payment provided by paragraphs A and B shall continue as to a person who has
ceased to hold a position named in paragraph A and shall inure to his heirs,
executors and administrators.
E. Insurance. The Corporation shall purchase and maintain insurance on
---------
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A and B.
F. Intention and Savings Clause. It is the intention of this Article XVII
----------------------------
to provide for indemnification to the fullest extent permitted by the General
Corporation Law of the State of Maryland, and this Article XVII shall be
interpreted accordingly. If this Article XVII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation, to the
full extent permitted by any applicable portion of this Article XVII that shall
not have been invalidated and to the full extent permitted by applicable law.
If the General Corporation Law of the State of Maryland is amended, or other
Maryland law is enacted, to permit further or additional indemnification of the
persons defined in this Article XVII.A, then the indemnification of such persons
shall be to the fullest extent permitted by the General Corporation Law of the
State of Maryland, as so amended, or such other Maryland law.
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Any repeal or modification of the foregoing paragraph 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 XVIII
Amendment of Bylaws
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to adopt,
repeal, alter, amend and rescind the bylaws of the Corporation by a vote of two-
thirds of the board of directors. Notwithstanding any other provision of these
Articles or the bylaws of the Corporation (and notwithstanding the fact that
some lesser percentage may be specified by law), the bylaws shall not be
adopted, repealed, altered, amended or rescinded by the stockholders of the
Corporation except by the vote of the holders of not less than 80% of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed adoption, repeal, alteration, amendment or
rescission is included in the notice of such meeting), or, as set forth above,
by the board of directors.
ARTICLE XIX
Amendment of Articles of Incorporation
The Corporation reserves the right to repeal, alter, amend or rescind any
provision contained in these Articles in the manner now or hereafter prescribed
by law, and all rights conferred on stockholders herein are granted subject to
this reservation. Notwithstanding the foregoing, the provisions set forth in
Articles IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII and this Article XIX of
these Articles may not be repealed, altered amended or rescinded in any respect
unless the same is approved by the affirmative vote of the holders of not less
than 80% of the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this purpose as a
single class) cast at a meeting of the stockholders called for that purpose
(provided that notice of such proposed adoption, repeal, alteration, amendment
or rescission is included in the notice of such meeting); except that such
repeal, alteration, amendment or rescission may be made by the affirmative vote
of the holders of a majority of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as a single class) if the same is first approved by a majority
of the Continuing Directors, as defined in Article XIV of these Articles.
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IN WITNESS WHEREOF, I have signed these articles and acknowledge the same
to be my act this 3rd day of March, 1998.
/s/ G. Ronald Jobson
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G. Ronald Jobson, Incorporator
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