ARTICLES OF INCORPORATION
OF
COMMUNITY FIRST BANCORP, INC.
The undersigned, William M. Tandy, whose address is 240 South Main
Street, Madisonville, Kentucky 42431, 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 Community First Bancorp, Inc. (herein
the "Corporation").
ARTICLE II
Purpose
The purpose for which the Corporation is organized is to act as a
financial institution holding company and to engage in any lawful business or
activity 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 III
Principal Office
The address of the Corporation's principal office in the State of
Maryland is c/o The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202, or such other place as may be designated in the
bylaws of the Corporation.
ARTICLE IV
Resident Agent
The name and mailing address of the initial resident agent of the
Corporation in the State of Maryland is The Corporation Trust Incorporated, 300
East Lombard Street, Baltimore, Maryland 21202. The resident agent is a Maryland
corporation.
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ARTICLE V
Capital Stock
The aggregate number of shares of all classes of capital stock which
the Corporation has authority to issue is 6,000,000, of which 5,000,000 are to
be shares of common stock, $.01 par value per share, and of which 1,000,000 are
to be shares of serial preferred stock, $.01 par value per share. The aggregate
par value of all shares of capital stock is $60,000. 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 V 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, the part of the surplus of the
Corporation which is transferred to stated capital upon the issuance of shares
as a stock dividend 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 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.
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.
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B. Serial Preferred Stock. Except as provided in these Articles, the
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 VI
Term
The Corporation is to have perpetual existence.
ARTICLE VII
Initial Directors
The number of directors constituting the initial board of directors of
the Corporation is nine, which number may be increased or decreased pursuant to
the bylaws of the Corporation and Article XII 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
----
William M. Tandy
Steven E. Carson
Ralph T. Teague
Charles G. Ramsey
Michael D. Wortham
J. Craig Riddle
Paul W. Arison
Charles B. Vaughn
Charlotte E. Baldwin
ARTICLE VIII
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 series or carrying any right
to purchase stock of any class or series.
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ARTICLE IX
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. Shares acquired by the Corporation may be
reissued by the Corporation.
ARTICLE X
Meetings of Stockholders; Cumulative Voting
A. Action Without a Meeting. Any action required or permitted to be
taken at a meeting of stockholders may be taken without a meeting if the
following are filed with the records of stockholders: (i) a unanimous written
consent which sets for the action and is signed by each stockholder entitled to
vote; and (ii) 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. Special meetings of the stockholders of the
Corporation for any purpose or purposes may be called at any time 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, or in accordance with the
bylaws of the Corporation provided that, at any time the Corporation shall be
subject to Section 3-805 of the Maryland General Corporation Law, special
meetings may only be called by stockholders on the written request of the
stockholders entitled to cast a majority of all votes entitled to be cast at the
meeting.
C. Cumulative Voting. There shall be no cumulative voting by
stockholders of any class or series in the election of directors of the
Corporation.
D. Place of Meetings. Meetings of stockholders may be held within or
without the State of Maryland, as the bylaws may provide.
ARTICLE XI
Notice for Nominations and Proposals
A. Timing of Notice. 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
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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 90 days prior to the date of any such meeting or in
the case of an annual meeting of stockholders, 90 days before the first
anniversary of the mailing of the notice of the preceding year's annual meeting
or, if there was no mailing of notice of the preceding year's annual meeting, 90
before the date of the annual meeting as announced by the Corporation.
B. Content of Notice. 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. 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 XI.
C. Determination by Chairman. 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 XII
Directors
A. Number; Vacancies. The number of directors of the Corporation shall
be such number, not less than 5 nor more than 15 (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 decrease in the number of directors
shall have the effect of shortening the term of any incumbent director, and
provided further that no action shall be taken to decrease or increase the
number of directors from time to time unless at least two-thirds of the
directors then in office shall concur in said action. 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 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
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of stockholders, at which time the stockholders shall elect a director to hold
office for the balance of the time then remaining. Notwithstanding the foregoing
or any other provision of the Maryland General Corporation Law, so long as the
Corporation is subject to Section 3-804 of the Maryland General Corporation Law,
the number of directors of the Corporation shall be fixed only by vote of the
Board of Directors and each vacancy resulting from an increase in the size of
the Board of Directors or the death, resignation or removal of a director may be
filled only by the affirmative vote of a majority of the remaining directors in
office, even if the remaining directors do not constitute a quorum and any
director elected to fill a vacancy shall hold office for the remainder of the
full term of the class of directors in which the vacancy occurred and until a
successor is elected and qualifies.
B. Classified Board. At the first annual meeting of stockholders of the
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 XII. Notwithstanding the foregoing, and except as
otherwise may be required by law, 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.
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ARTICLE XIII
Removal of Directors
Notwithstanding any other provision of these Articles or the bylaws of
the Corporation or the Maryland General Corporation Law, 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 XIII shall not apply with respect to the director or
directors elected by such holders of preferred stock.
ARTICLE XIV
Acquisition of Capital Stock
A. Five-Year Prohibition. For a period of five years from the effective
date of the completion of the conversion of Community First Bank, Madisonville,
Kentucky, 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 such term is defined in Article XV hereof. In addition,
for a period of five years from the completion of the conversion of Community
First Bank from mutual to stock form, and notwithstanding any provision to the
contrary in these Articles of Incorporation or 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 XIV, 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
the effective date of the completion of the conversion of Community First Bank
from mutual to stock form, 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 XV, 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
stockholders. 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 (1/100th) 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
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accomplished by multiplying the aggregate voting power, as so limited, of the
outstanding shares of voting stock of the Corporation beneficially owned by such
acquiring person by a fraction whose numerator is the number of votes
represented by the shares of voting stock of the Corporation owned of record by
such record holder (and which are beneficially owned by such acquiring person)
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. 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 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
Rules 13d-3 and 13d-5 of the General Rules and Regulations under the Securities
and Exchange Act of 1934, as in effect on the date of filing of these Articles.
D. Exclusion for Employee Benefit Plans, Directors, Officers, Employees
and Certain Proxies. The restrictions contained in this Article XIV shall not
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 XV, by a stockholder of the Corporation or (iii) any employee
benefit plans of the Corporation. 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 XIV 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 Article XV, shall have the power to construe and apply the provisions of this
Article XIV and to make all determinations
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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 XIV to the given facts or (d) any other matter relating to the
applicability or effect of this Article XIV. Any constructions, applications, or
determinations made by the Continuing Directors pursuant to this Article XIV 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 XV
Approval of Certain Business Combinations
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this Article XV.
A. Vote Required. (1) Except as otherwise expressly provided in this
Article XV, 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 two-thirds 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 or consolidation of the Corporation with or into a
Related Person (as hereinafter defined);
(b) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage, or any other capital
device, 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;
(c) any merger or consolidation of a Related Person with or into the
Corporation or a subsidiary of the Corporation;
(d) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage or any other capital
device, 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;
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(g) any reclassification of the common stock of the Corporation
(including a reverse stock split), or any recapitalization
involving the common stock of the Corporation which has the
effect, directly or indirectly, in one transaction or a series of
transactions of increasing by 5% or more of the total outstanding
shares, the proportionate amount of equity securities of the
Corporation or a subsidiary that are directly or indirectly owned
by any Related Person; and
(h) any agreement, contract or other arrangement providing for any of
the transactions described in this Paragraph A(1).
(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 which might otherwise permit a
lesser vote or no vote.
(3) The term "Business Combination" as used in this Article XV shall
mean any transaction which is referred to in any one or more of subparagraphs
A(1)(a) through (h) above.
B. Approval by Continuing Directors. 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 these Articles, any provision of law, or any agreement
with any regulatory agency or national securities exchange, 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. Definitions. For the purposes of this Article XV 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), "beneficially owns" (as that term is defined in Rules 13d-3
and 13d-5 of the General Rules and Regulations under the Securities Act
of 1934) 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) 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.
(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
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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.
D. Unless otherwise required by law, the provisions of Sections 3-601
through 3-604 of the Maryland General Corporation Law shall not be applicable to
any business combination (as therein defined), if the business combination shall
have been approved by a two-thirds vote of the Continuing Directors (as
hereinabove defined); provided, however, that such approval shall only be
effective if obtained at a meeting at which a Continuing Director Quorum (as
hereinabove defined) is present.
ARTICLE XVI
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 XV hereof) or a tender
or exchange offer, the board of directors of the Corporation shall, 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 XVII
Limitation of Officer's and Director's 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 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
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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.
ARTICLE XVIII
Indemnification
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. 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 XIX
Election to Be Subject to Subtitle 8 of Title 3 of the Corporations
and Associations Article of the Annotated Code of Maryland
So long as the Corporation shall have a class of equity securities
registered under the Securities Exchange Act of 1934, the Corporation hereby
elects to be subject to all provisions of Subtitle 8 of Title 3 of the
Corporations and Associations Article of the Annotated Code of Maryland and the
provisions of said Subtitle 8 shall govern notwithstanding other provisions of
the Maryland General Corporation Law or the charter or bylaws of the
Corporation.
ARTICLE XX
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.
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.
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ARTICLE XXI
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 X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XX and this
Article XXI 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 two- thirds vote of the Continuing Directors, as defined in
Article XV of these Articles.
In Witness Whereof, I have signed these articles and acknowledge the
same to be my act this 13th day of March 2003.
/s/ William M. Tandy
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William M. Tandy, Incorporator
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IN WITNESS WHEREOF, I, hereby consent to my designation in this
document as Resident Agent for this Corporation and, accordingly, have hereto
set my hand this the 14th day of March, 2003.
/s/ Mark J. Diffenbaugh
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The Corporation Trust Incorporated
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