LEEDS FEDERAL BANKSHARES, INC.
FEDERAL STOCK CHARTER
Section 1. Corporate Title. The full corporate title of
the subsidiary holding company is Leeds Federal Bankshares, Inc.
(the "Company").
Section 2. Duration. The duration of the Company is
perpetual.
Section 3. Purpose and Powers. The purpose of the Company
is to pursue any or all of the lawful objectives of a federal
mutual holding company chartered under section 10(o) of the Home
Owners' Loan Act, 12 U.S.C. 1467a(o), and to exercise all of the
express, implied, and incidental powers conferred thereby and by
all acts amendatory thereof and supplemental thereto, subject to
the Constitution and laws of the United States as they are now in
effect, or as they may hereafter be amended, and subject to all
lawful and applicable rules, regulations, and orders of the
Office of Thrift Supervision (the "Office").
Section 4. Capital Stock. The total number of shares of all
classes of capital stock which the Company has authority to issue
is 30,000,000, of which 20,000,000 shall be common stock, par
value $1.00 per share, and 10,000,000 shall be preferred stock,
par value $1.00 per share. The shares may be issued from time to
time as authorized by the Board of Directors without approval of
shareholders, except as otherwise provided in this Section 4 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 in full before their issuance and shall not
be less than the par value. Neither promissory notes nor future
services shall constitute payment or part payment for the
issuance of shares of the Company. The consideration for the
shares shall be cash, tangible or intangible property (to the
extent the Company would be permitted to directly invest in such
property), labor or services actually performed for the Company,
or any combination of the foregoing. In the absence of actual
fraud in the transaction, the value of such property, labor, or
services, as determined by the Board of Directors of the Company,
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, that part of the surplus of the Company
which is transferred to stated capital upon the issuance of
shares as a share dividend shall be deemed to be the
consideration for their issuance.
Except for shares issuable in the initial organization of
the Company, no shares of capital stock (including shares
issuable upon conversion, exchange, or exercise of other
securities) shall be issued, directly or indirectly, to officers,
directors, or controlling persons of the Company other than as
part of a general public offering or as qualifying shares to a
director, unless their issuance or the plan under which they
would be issued has been approved by a majority of the total
votes eligible to be cast at a legal meeting.
Nothing contained in this Section 4 (or in any supplementary
sections hereto) shall entitle the holders of any class or series
of capital stock to vote as a separate class or series or to more
than one vote per share. Provided, that this restriction on
voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of
preferred stock, voting as a class or series, to elect some
members of the Board of Directors, less than a majority thereof,
in the event of default in the payment of dividends on any class
or series of preferred stock;
(ii) To any provision which would require the holders of
preferred stock, voting as a class or series, to approve the
merger or consolidation of the Company with another corporation,
or the sale, lease, or conveyance (other than by mortgage or
pledge) of properties or business in exchange for securities of a
corporation other than the Company if the preferred stock is
exchanged for securities of such other corporation: Provided,
that no provision may require such approval for transactions
undertaken with the assistance or pursuant to the direction of
the Office;
(iii) To any amendment which would adversely change the
specific terms of any class or series of capital stock as set
forth in this Section 4 (or in any supplementary sections
hereto), including any amendment which would create or enlarge
any class or series ranking prior thereto in rights and
preferences. An amendment which increases the number of
authorized shares of any class or series of capital stock, or
substitutes the surviving Company in a merger or consolidation
for the Company, shall not be considered to be such an adverse
change.
A description of the different classes and series (if any)
of the Company's capital stock and a statement of the
designations, and the relative rights, preferences, and
limitations of the shares of each class of and series (if any) of
capital stock and a statement of the authority of the Board of
Directors to divide the preferred stock into classes or series or
both and to determine or change for any such class or series its
designation, number of shares, relative rights, preferences and
limitations are as follows:
A. Common Stock. Except as provided in this Section 4,
the holders of the 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 and shall
not be entitled to cumulate votes for the election of directors.
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 of
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.
If at any time Leeds Federal Bankshares, M.H.C., the parent
mutual holding company of the Company (the "Mutual Holding
Company") converts from the mutual-to-stock form of organization,
a liquidation account shall be established by any stock holding
company parent of Leeds Federal Savings Bank (the "Bank"), and,
if required by the Office, the Bank. Subject to such, or any
other provision for a liquidation account, in the event of any
liquidation, dissolution, or winding up of the Company, the
holders of the common stock (and the holders of any class or
series of stock entitled to participate with the common stock in
the distribution of assets) shall be entitled to receive, in cash
or in kind, the assets of the Company available for distribution
remaining after: (i) payment or provision for payment of the
Company's debts and liabilities; and (ii) distributions or
provisions for distributions to holder of any class or series of
stock having preference over the common stock in the liquidation,
dissolution, or winding up of the Company. Each share of common
stock shall have the same rights as and be identical in all
respects with all the other shares of common stock.
B. Preferred Stock. The Company may provide for one or
more classes of preferred stock, which shall be separately
identified. The shares of any class may be divided into and
issued in series, with each series separately designated so as to
distinguish the shares thereof from the shares of all other
series and classes. All shares of the same class shall be
identical except as to the following relative rights and
preferences, as to which there may be variations between
different series:
(a) The distinctive serial designation and the number of
shares constituting such series;
(b) The dividend rate or the amount of dividends to be paid
on the shares of such series, whether dividends shall be
cumulative and, if so, from which date(s), the payment date(s)
for dividends, and the participating or other special rights, if
any, with respect to dividends;
(c) The voting powers, full or limited, if any, of the
shares of such series;
(d) Whether the shares of such series shall be redeemable
and, if so, the price(s) at which, and the terms and conditions
on which, such shares may be redeemed;
(e) The amount(s) payable upon the shares of such series in
the event of voluntary or involuntary liquidation, dissolution,
or winding up of the Company;
(f) Whether the shares of such series shall be entitled to
the benefit 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(s) at which such shares may be redeemed or purchased
through the application of such fund;
(g) Whether the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or classes
of stock of the Company and, if so, the conversion price(s) or
the rate(s) 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;
(h) The price or other consideration for which the shares
of such series shall be issued; and
(i) Whether the shares of such 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 series of serial preferred
stock.
Each share of each series of serial preferred stock shall
have the same relative rights as and be identical in all respects
with all the other shares of the same series.
The board of directors shall have authority to divide, by
the adoption of supplementary charter sections, any authorized
class of preferred stock into series and, within the limitations
set forth in this section and the remainder of this charter, fix
and determine the relative rights and preferences of the shares
of any series so established.
Prior to the issuance of any preferred shares of a series
established by a supplementary charter section adopted by the
board of directors, the Company shall file with the Secretary to
the Office a dated copy of that supplementary section of this
charter establishing and designating the series and fixing and
determining the relative rights and preferences hereof.
Section 5. Preemptive Rights. Holders of the capital stock
of the Company shall not be entitled to preemptive rights with
respect to any shares of the Company which may be issued.
Section 6. Beneficial Ownership Limitation.
Notwithstanding anything contained in the Company's charter or
bylaws to the contrary, for a period of five years from the date
of the organization of the Bank in capital stock form, no person
other than the Mutual Holding Company shall directly or
indirectly offer to acquire or acquire the beneficial ownership
of more than 10% of any class of any equity security of the
Company. This limitation shall not apply to the purchase of
shares by underwriters in connection with a public offering, or
the purchase of shares by a tax-qualified employee stock benefit
plan which is exempt from the approval requirements under
574.3(c)(l)(vii) of the Office's regulations.
In the event shares are acquired in violation of this
Section 6, all shares beneficially owned by any person in excess
of 10% shall be considered "excess shares" and shall not be
counted as shares entitled to vote and shall not be voted by any
person or counted as voting shares in connection with any matters
submitted to the shareholders for a vote.
For purposes of this Section 6, the following definitions
apply:
(1) The term "person" includes an individual, a group
acting in concert; a corporation, a partnership, a savings bank,
a savings and loan association, a joint stock company, a trust,
an unincorporated organization or similar company, a syndicate or
any other group formed for the purpose of acquiring, holding or
disposing of the equity securities of the Company.
(2) The term "offer" includes every offer to buy or
otherwise acquire, solicitation of an offer to sell, tender offer
for, or request or invitation for tenders of, a security or
interest in a security for value.
(3) The term "acquire" includes every type of acquisition,
whether effected by purchase, exchange, operation of law or
otherwise.
(4) The term "acting in concert" means (a) knowing
participation in a joint activity or conscious parallel action
towards a common goal whether or not pursuant to an express
agreement, or (b) a combination or pooling of voting or other
interests in the securities of an issuer for a common purpose
pursuant to any contract, understanding, relationship, agreement
or other arrangements, whether written or otherwise.
Section 7. Call for Special Meetings. Special meetings of
shareholders relating to changes in control of the Company or
amendments to its charter shall be called only upon direction of
the Board of Directors.
Section 8. Directors. The Company shall be under the
direction of a Board of Directors. The authorized number of
directors, as stated in the Company's bylaws, shall not be less
than five or more than fifteen except when a greater number is
approved by the Board.
Section 9. Amendment of Certificate. Except as provided in
Section 4 hereof, no amendment, addition, alteration, change, or
repeal of this charter shall be made, unless such is first
proposed by the Board of Directors of the Company, approved by
the shareholders by a majority of the total votes eligible to be
cast and submitted to the Office for action as specified by law
or regulation.
Attest: \s\ Margaret Balsamo By: \s\ Gordon E. Clark
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Margaret Balsamo Gordon E. Clark
Secretary of the Company President of the Company
Attest: \s\ Nadine Y. Washington By: \s\ Ellen Seidman
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Corporate Secretary Director of the
Office of Thrift Supervision Office of Thrift
Supervision
Effective Date: November 20, 1997