ARTICLES OF INCORPORATION
OF
SE FINANCIAL CORP.
Article 1. Name. The name of the corporation is SE Financial Corp.
(hereinafter, the "Company").
Article 2. Registered Office. The address of the initial registered
office of the Company in the Commonwealth of Pennsylvania is 1901-03 East
Passyunk Avenue, Philadelphia, Pennsylvania 19148.
Article 3. Nature of Business. The Company is organized under the
Business Corporation Law of 1988, as amended, of the Commonwealth of
Pennsylvania (the "BCL") for the purpose of engaging in any lawful act or
activity for which a corporation may be organized under the laws of the
Commonwealth of Pennsylvania.
Article 4. Duration. The term of the existence of the Company shall be
perpetual.
Article 5. Capital Stock.
A. Authorized Amount. The total number of shares of capital stock that
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the Company has authority to issue is 10,000,000 of which 2,000,000 shall be
serial preferred stock, no par value (hereinafter, the "Preferred Stock") and
8,000,000 shall be common stock, par value $0.10 per share (hereinafter, the
"Common Stock"). Except to the extent required by governing law, rule, or
regulation, the shares of capital stock may be issued from time to time by the
board of directors of the Company (hereinafter, the "Board of Directors")
without further approval of stockholders. The Company shall have the authority
to purchase its capital stock out of funds lawfully available therefor.
B. Common Stock. Except as provided in this Article 5 (or in any
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resolution or resolutions adopted by the Board of Directors pursuant hereto),
the exclusive voting power shall be vested in the Common Stock, with each holder
thereof being entitled to one vote for each share of such Common Stock standing
in the holder's name on the books of the Company. Subject to any rights and
preferences of any class of stock having preference over the Common Stock,
holders of Common Stock shall be entitled to such dividends as may be declared
by the Board of Directors out of funds lawfully available therefor. Upon any
liquidation, dissolution, or winding up of the affairs of the Company, whether
voluntary or involuntary, holders of Common Stock shall be entitled to receive
pro rata the remaining assets of the Company after the holders of any class of
stock having preference over the Common Stock have been paid in full any sums to
which they may be entitled.
C. Authority of Board to Fix Terms of Preferred Stock. A description of
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each class of shares and a statement of the voting rights, designations,
preferences, qualifications, privileges, limitations, options, conversion
rights, and other special rights granted to or imposed upon the shares of each
class and of the authority vested in the Board of Directors to establish series
of Preferred Stock or to determine that Preferred Stock will be issued as a
class without series and to fix and determine the voting rights,
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designations, preferences, and other special rights of the Preferred Stock as a
class or of the series thereof are as follows:
Preferred Stock may be issued from time to time as a class without
series or in one or more series. Each series shall be designated in
supplementary sections or amendments to these Articles of Incorporation by the
Board of Directors so as to distinguish the shares thereof from the shares of
all other series and classes. The Board of Directors may by resolution and
amendment to these Articles of Incorporation from time to time divide shares of
Preferred Stock into series, or determine that the Preferred Stock shall be
issued as a class without series, fix and determine the number of shares in a
series and the terms and conditions of the issuance of the class or the series,
and, subject to the provisions of this Article 5, fix and determine the rights,
preferences, qualifications, privileges, limitations, and other special rights,
if any, of the class (if none of such shares of the class have been issued) or
of any series so established, including but not limited to, voting rights (which
may be limited, multiple, fractional, or non-voting rights), the rate of
dividend, if any, and whether or to what extent, if any, such dividends shall be
cumulative (including the date from which dividends shall be cumulative, if
any), the price at and the terms and conditions on which shares may be redeemed,
if any, the preference and the amounts payable on shares in the event of
voluntary or involuntary liquidation, sinking fund provisions for the redemption
or purchase of shares in the event shares of the class or of any series are
issued with sinking fund provisions, and the terms and conditions on which the
shares of the class or of any series may be converted in the event the shares of
the class or of any series are issued with the privilege of conversion.
The Board of Directors may, in its discretion, at any time or from time
to time, issue or cause to be issued all or any part of the authorized and
unissued shares of Preferred Stock for consideration of such character and value
as the Board of Directors shall from time to time fix or determine.
D. Repurchase of Shares. The Company may, from time to time, pursuant
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to authorization by the Board of Directors 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 Company 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 Company outstanding at the time of the purchase or
acquisition in question or as are imposed by law or regulation.
Article 6. Incorporator. The name and business address of the sole
incorporator is as follows:
Name Address
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Frank S. DePaolo 1901-03 East Passyunk Avenue
Philadelphia, Pennsylvania 19148
Article 7. Directors. The business and affairs of the Company shall be
managed by or under the direction of the Board of Directors.
A. Number. The number of directors of the Company shall be such number,
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not less than 5 nor more than 15 (exclusive of directors, if any, to be elected
by holders of Preferred Stock, voting separately as a class), as shall be
provided from time to time 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
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from time to time unless at least
eighty percent (80%) of the directors then in office shall concur in said
action.
B. Classified Board. The Board of Directors shall be divided into four
classes of directors that shall be designated Class I, Class II, Class III and
Class IV. The members of each class shall be elected for a term of four years
and until their successors are elected and qualified. Such classes shall be as
nearly equal in number as the then total number of directors constituting the
entire Board of Directors shall permit, with the term of office of Class I to
expire at the first annual meeting of stockholders, the term of office of Class
II to expire at the annual meeting of stockholders one year thereafter, the term
of office of Class III to expire at the annual meeting of stockholders two years
thereafter and the term of Class IV to expire at the annual meeting of
stockholders three years thereafter. At each annual meeting of stockholders
following such initial classification and election, directors elected to succeed
those directors whose terms expire shall be elected for a term of office to
expire at the four succeeding annual meeting of stockholders after their
election.
Should the number of directors of the Company be reduced, the
directorship(s) eliminated shall be allocated among the classes 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. Should the number of directors of
the Company be increased, the additional directorships shall be allocated among
such classes 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 Company shall have the right, voting separately as a class, to elect one or
more directors of the Company, 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 7. 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 Company shall have the right, voting separately as a
class, to elect one or more directors of the Company, the terms of the director
or directors elected by such holders shall expire at the next succeeding annual
meeting of stockholders.
The initial Board of Directors shall consist of the following
individuals and shall be divided into the following classes:
Class I Class II Class III Class IV
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Samuel Barsky P. Charles DeRita Ben Kovnat Gilbert Basky
Andrew Hines J. William Parker Megan Mahoney Marcy Panzer
William Saldutti, III Susanne Spinell Dr. Nicholas Renzi
Shuster
C. No Cumulative Voting. Stockholders of the Company shall not be
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permitted to cumulate their votes for the election of directors.
D. Vacancies. Subject to the rights of the holders of any series of
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Preferred Stock then outstanding, any vacancy occurring on the Board of
Directors, including any vacancy created by reason of an increase in the number
of directors, shall be filled by a majority vote of the directors then in
office, whether or not a quorum is present, or by a sole remaining director, and
any director so chosen shall serve
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until the term of the class to which such director was appointed shall expire
and until a successor is elected and qualified. When the number of directors is
changed, the Board of Directors shall determine the class or classes to which
the increased or decreased number of directors shall be appointed.
E. Removal. Unless otherwise required by law, a director (including
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persons elected by directors to fill vacancies in the Board of Directors) may be
removed from office only for cause by an affirmative vote of not less than a
majority of the total votes eligible to be cast by stockholders. Cause for
removal by stockholders shall exist only if the director whose removal is
proposed has been either declared of unsound mind by an order of a court of
competent jurisdiction, convicted of a felony or of an offense punishable by
imprisonment for a term of more than one year by a court of competent
jurisdiction, or deemed liable by a court of competent jurisdiction for gross
negligence or misconduct in the performance of such director's duties to the
Company. At least 30 days prior to such meeting of stockholders, written notice
shall be sent to the director whose removal will be considered at the meeting.
Directors may also be removed from office in the manner provided in Sections
1726(b) and 1726(c) of the BCL, or any successors to such sections.
F. Nominations of Directors. Nominations of candidates for election as
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directors at any annual meeting of stockholders may be made (a) by, or at the
direction of, a majority of the Board of Directors or (b) by any stockholder
entitled to vote at such annual meeting. Only persons nominated in accordance
with the procedures set forth in this Article 7.F shall be eligible for election
as directors at an annual meeting. Ballots bearing the names of all the persons
who have been nominated for election as directors at an annual meeting in
accordance with the procedures set forth in this Article 7.F shall be provided
for use at the annual meeting.
Nominations, other than those made by or at the direction of the Board
of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Company as set forth in this Article 7.F. To be timely, a
stockholder's notice shall be delivered to, or mailed and received at, the
principal executive offices of the Company not less than 60 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Company; provided, however, that with respect to the first scheduled annual
meeting, notice by the stockholder must be so delivered or received no later
than the close of business on the tenth day following the day on which notice of
the date of the scheduled meeting was mailed and must be delivered or received
no later than the close of business on the fifth day preceding the date of the
meeting. Such stockholder's notice shall set forth (a) as to each person whom
the stockholder proposes to nominate for election or re-election as a director
and as to the stockholder giving the notice (i) the name, age, business address,
and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the class and number of shares of Company stock
that are Beneficially Owned (as determined by Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) by such person on the date of such
stockholder notice, and (iv) any other information relating to such person that
is required to be disclosed in solicitations of proxies with respect to nominees
for election as directors, pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any successor thereto; and (b) as to the
stockholder giving the notice (i) the name and address, as they appear on the
Company's books, of such stockholder and any other stockholders known by such
stockholder to be supporting such nominees and (ii) the class and number of
shares of Company stock that are Beneficially Owned by such stockholder on the
date of such stockholder notice and, to the extent known, by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder notice. At the request of the Board of Directors, any
person nominated by, or at the direction of, the Board of Directors for election
as a director at an annual meeting shall furnish to the
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Secretary of the Company the same information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee.
The Board of Directors may reject any nomination by a stockholder not
timely made in accordance with the requirements of this Article 7.F. If the
Board of Directors, or a designated committee thereof, determines that the
information provided in a stockholder's notice does not satisfy the
informational requirements of this Article 7.F in any material respect, the
Secretary of the Company shall notify such stockholder of the deficiency in the
notice. The stockholder shall have an opportunity to cure the deficiency by
providing additional information to the Secretary within such period of time,
not to exceed five days from the date such deficiency notice is given to the
stockholder, as the Board of Directors or such committee shall reasonably
determine. If the deficiency is not cured within such period, or if the Board of
Directors or such committee reasonably determines that the additional
information provided by the stockholder, together with information previously
provided, does not satisfy the requirements of this Article 7.F in any material
respect, then the Board of Directors may reject such stockholder's nomination.
The Secretary of the Company shall notify a stockholder in writing whether such
person's nomination has been made in accordance with the time and informational
requirements of this Article 7.F. Notwithstanding the procedures set forth in
this paragraph, if neither the Board of Directors nor such committee makes a
determination as to the validity of any nominations by a stockholder, the
presiding officer of the annual meeting shall determine and declare at the
annual meeting whether the nomination was made in accordance with the terms of
this Article 7.F. If the presiding officer determines that a nomination was made
in accordance with the terms of this Article 7.F, such person shall so declare
at the annual meeting and ballots shall be provided for use at the meeting with
respect to such nominee. If the presiding officer determines that a nomination
was not made in accordance with the terms of this Article 7.F, such person shall
so declare at the annual meeting and the defective nomination shall be
disregarded.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right, voting separately as a class, to elect one or more directors of the
Company, the provisions of this Article 7.F shall not apply with respect to the
director or directors elected by such holders of Preferred Stock.
Article 8. 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 or of other securities of the Company shall have
any preemptive right to purchase or subscribe for any unissued stock of any
class or series, 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, or any
shares of any class, bonds, debentures, notes, scrip, warrants, obligations,
evidences of indebtedness, or other securities of the Company purchased by the
Company pursuant to Article 5.D; but any such unissued, or issued but not
outstanding, stock, bonds, certificates of 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 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 9. Elimination of Directors' Liability. A director of the
Company shall not be personally liable, as such, for monetary damages for any
action taken unless: (i) the director has breached or failed to perform such
director's fiduciary duties, or other duties under Chapter 17, Subchapter B of
the BCL, of such director's office, and (ii) the breach or failure to perform
constitutes self-dealing, willful
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misconduct, or recklessness; provided, however, that the foregoing shall not
apply to (i) the responsibility or liability of a director pursuant to any
criminal statute; or (ii) the liability of a director for the payment of taxes
pursuant to federal, state, or local law. If the laws of the Commonwealth of
Pennsylvania are amended after the effective date of these Articles of
Incorporation to eliminate further or limit the personal liability of directors,
then the liability of a director of the Company shall be eliminated or limited
to the fullest extent permitted by law.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Company shall not adversely affect any right or protection
of a director of the Company existing at the time of such repeal or
modification.
Article 10. Indemnification of Officers, Directors, Employees, and
Agents.
A. Persons. The Company shall indemnify any person who was or is a
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party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, including actions by or in the right of
the Company, whether civil, criminal, administrative, or investigative, by
reason of the fact that such person is or was a director, officer, employee,
fiduciary, trustee, or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee, fiduciary, trustee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise.
B. Extent -- Derivative Actions. In the case of a threatened, pending,
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or completed action or suit by or in the right of the Company against a person
named in paragraph A by reason of such person holding a position named in
paragraph A, the Company shall indemnify such person if such person satisfies
the standard in paragraph C, for expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of the action or suit.
C. Standard -- Derivative Suits. In the case of a threatened, pending,
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or completed action or suit by or in the right of the Company, a person named in
paragraph A shall be indemnified only if:
1. such person is successful on the merits or otherwise; or
2. such person acted in good faith in the transaction that is
the subject of the suit or action, and in a manner reasonably believed
to be in, or not opposed to, the best interests of the Company,
including, but not limited to, the taking of any and all actions in
connection with the Company's response to any tender offer or any offer
or proposal of another party to engage in a Business Combination (as
defined in Article 13 of these Articles) not approved by the Board of
Directors. However, such person shall not be indemnified in respect of
any claim, issue, or matter as to which such person has been adjudged
liable to the Company unless (and only to the extent that) the court of
common pleas or the court in which the suit was brought shall
determine, upon application, that despite the adjudication of liability
but in view of all the circumstances, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall
deem proper.
D. Extent -- Nonderivative Suits. In case of a threatened, pending, or
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completed suit, action, or proceeding (whether civil, criminal, administrative,
or investigative), other than a suit by or in the right of the Company, together
hereafter referred to as a nonderivative suit, against a person named in
paragraph A by reason of such person holding a position named in paragraph A,
the Company shall indemnify such person if such person satisfies the standard in
paragraph E, for amounts actually and
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reasonably incurred by such person in connection with the defense or settlement
of the nonderivative suit, including, but not limited to (i) expenses (including
attorneys' fees), (ii) amounts paid in settlement, (iii) judgments, and (iv)
fines.
E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a
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person named in paragraph A shall be indemnified only if:
1. such person is successful on the merits or otherwise; or
2. such person acted in good faith in the transaction that is
the subject of the nonderivative suit and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of
the Company, including, but not limited to, the taking of any and all
actions in connection with the Company's response to any tender offer
or any offer or proposal of another party to engage in a Business
Combination (as defined in Article 13 of these Articles) not approved
by the Board of Directors and, with respect to any criminal action or
proceeding, such person had no reasonable cause to believe such
person's conduct was unlawful. The termination of a nonderivative suit
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent shall not, in itself, create a
presumption that the person failed to satisfy the standard of this
paragraph E.2.
F. Determination That Standard Has Been Met. A determination that the
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standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in paragraph C.2 (second sentence), the determination may be
made by:
1. the Board of Directors by a majority vote of a quorum
consisting of directors of the Company who were not parties to the
action, suit, or proceeding;
2. if such a quorum is not obtainable or if obtainable and a
majority of a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or
3. the stockholders of the Company.
G. Proration. Anyone making a determination under paragraph F may
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determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
H. Advancement of Expenses. Reasonable expenses incurred by a director,
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officer, employee, or agent of the Company in defending a civil or criminal
action, suit, or proceeding described in Article 10.A may be paid by the Company
in advance of the final disposition of such action, suit, or proceeding upon
receipt of an undertaking by or on behalf of such person to repay such amount if
it shall ultimately be determined that the person is not entitled to be
indemnified by the Company.
I. Other Rights. The indemnification and advancement of expenses
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provided by or pursuant to this Article 10 shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any insurance or other agreement, vote of stockholders or
directors, or otherwise, both as to actions in their official capacity and as to
actions in another capacity while holding an office, and shall continue as to a
person who has ceased to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of such person.
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J. Insurance. The Company shall have the power to purchase and maintain
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insurance on behalf of any person who is or was a director, officer, employee,
or agent of the Company, or is or was serving at the request of the Company as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Company would have the power to
indemnify such person against such liability under the provisions of this
Article 10.
K. Security Fund; Indemnity Agreements. By action of the Board of
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Directors (notwithstanding their interest in the transaction), the Company may
create and fund a trust fund or fund of any nature, and may enter into
agreements with its officers, directors, employees, and agents for the purpose
of securing or insuring in any manner its obligation to indemnify or advance
expenses provided for in this Article 10.
L. Modification. The duties of the Company to indemnify and to advance
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expenses to any person as provided in this Article 10 shall be in the nature of
a contract between the Company and each such person, and no amendment or repeal
of any provision of this Article 10, and no amendment or termination of any
trust or other fund created pursuant to Article 10.K hereof, shall alter to the
detriment of such person the right of such person to the advancement of expenses
or indemnification related to a claim based on an act or failure to act which
took place prior to such amendment, repeal, or termination.
M. Proceedings Initiated by Indemnified Persons. Notwithstanding any
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other provision in this Article 10, the Company shall not indemnify a director,
officer, employee, or agent for any liability incurred in an action, suit, or
proceeding initiated by (which shall not be deemed to include counter-claims or
affirmative defenses) or participated in as an intervenor or amicus curiae by
the person seeking indemnification unless such initiation of or participation in
the action, suit, or proceeding is authorized, either before or after its
commencement, by the affirmative vote of a majority of the directors then in
office.
N. Savings Clause. If this Article 10 or any portion hereof shall be
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invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify each director, officer, employee, and agent
of the Company 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 Company to the fullest extent
permitted by any applicable portion of this Article 10 that shall not have been
invalidated and to the fullest extent permitted by applicable law.
If the laws of the Commonwealth of Pennsylvania are amended to permit
further indemnification of the directors, officers, employees, and agents of the
Company, then the Company shall indemnify such persons to the fullest extent
permitted by law. Any repeal or modification of this Article 10 by the
stockholders of the Company shall not adversely affect any right or protection
of a director, officer, employee, or agent existing at the time of such repeal
or modification.
Article 11. Meetings of Stockholders and Stockholder Proposals.
A. Special Meetings of Stockholders. Special meetings of the
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stockholders of the Company may be called only by the Board of Directors
pursuant to a resolution approved by the affirmative vote of a majority of the
directors then in office.
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B. Action Without a Meeting. Notwithstanding any other provision of
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these Articles or the Bylaws of the Company, no action required to be taken or
which may be taken at any annual or special meeting of the stockholders of the
Company may be taken without a meeting, and the power of stockholders to consent
in writing, without a meeting, to the taking of any action is specifically
denied.
C. Stockholder Proposals. At an annual meeting of stockholders, only
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such new business shall be conducted, and only such proposals shall be acted
upon, as shall have been brought before the annual meeting by, or at the
direction of, (1) the Board of Directors or (2) any stockholder of the Company
who complies with all the requirements set forth in this Article 11.C.
Proposals, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Company as set forth in this Article 11.C. For stockholder proposals to
be considered at the annual meeting of stockholders, the stockholder's notice
shall be delivered to, or mailed and received at, the principal executive
offices of the Company not less than 60 days prior to the anniversary date of
the immediately preceding annual meeting of stockholders of the Company. Such
stockholder's notice shall set forth as to each matter the stockholder proposes
to bring before the annual meeting (a) a brief description of the proposal
desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (b) the name and address, as they appear on
the Company's books, of the stockholder proposing such business and, to the
extent known, any other stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of the Company stock that are
Beneficially Owned by the stockholder on the date of such stockholder notice
and, to the extent known, by any other stockholders known by such stockholder to
be supporting such proposal on the date of such stockholder notice, and (d) any
financial interest of the stockholder in such proposal (other than interests
which all stockholders would have).
The Board of Directors may reject any stockholder proposal not timely
made in accordance with the terms of this Article 11.C. If the Board of
Directors, or a designated committee thereof, determines that the information
provided in a stockholder's notice does not satisfy the informational
requirements of this Article 11.C in any material respect, the Secretary of the
Company shall promptly notify such stockholder of the deficiency in the notice.
The stockholder shall have an opportunity to cure the deficiency by providing
additional information to the Secretary within such period of time, not to
exceed five days from the date such deficiency notice is given to the
stockholder, as the Board of Directors or such committee shall reasonably
determine. If the deficiency is not cured within such period, or if the Board of
Directors or such committee determines that the additional information provided
by the stockholder, together with information previously provided, does not
satisfy the requirements of this Article 11.C in any material respect, then the
Board of Directors may reject such stockholder's proposal. The Secretary of the
Company shall notify a stockholder in writing whether such stockholder's
proposal has been made in accordance with the time and informational
requirements of this Article 11.C. Notwithstanding the procedures set forth in
this paragraph, if neither the Board of Directors nor such committee makes a
determination as to the validity of any stockholder proposal, the presiding
officer of the annual meeting shall determine and declare at the annual meeting
whether the stockholder proposal was made in accordance with the terms of this
Article 11.C. If the presiding officer determines that a stockholder proposal
was made in accordance with the terms of this Article 11.C, such person shall so
declare at the annual meeting and ballots shall be provided for use at the
meeting with respect to any such proposal. If the presiding officer determines
that a stockholder proposal was not made in accordance with the terms of this
Article 11.C, such person shall so declare at the annual meeting and any such
proposal shall not be acted upon at the annual meeting.
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This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of report of officers, directors, and
committees of the Board of Directors, but in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed,
and received as herein provided.
Article 12. Certain Limitations on Voting Rights
A. Limitations. Notwithstanding any other provision of these Articles,
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in no event shall any record owner of any outstanding Common Stock which is
beneficially owned, directly or indirectly, by a person who, as of any record
date for the determination of stockholders entitled to vote on any matter,
beneficially owns in excess of 10% of the then-outstanding shares of Common
Stock (the "Limit"), be entitled, or permitted to any vote in respect of the
shares held in excess of the Limit. The number of votes which may be cast by any
record owner by virtue of the provisions hereof in respect of Common Stock
beneficially owned by such person owning shares in excess of the Limit shall be
a number equal to the total number of votes which a single record owner of all
Common Stock owned by such person would be entitled to cast, multiplied by a
fraction, the numerator of which is the number of shares of such class or series
which are both beneficially owned by such person and owned of record by such
record owner and the denominator of which is the total number of shares of
Common Stock beneficially owned by such Person owning shares in excess of the
Limit.
Further, for a period of five years from the completion of the
conversion of St. Edmond's Federal Savings Bank from mutual to stock form, no
Person 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.
B. Exclusions. The provisions of the foregoing Section A of this
----------
Article XIII shall not apply to:
(1) the acquisition of more than 10% of any class of equity
security by any tax-qualified defined benefit plan or defined
contribution plan of the Company or its subsidiaries;
(2) the purchase of shares by underwriters in connection with
a public offering; or
(3) the Offer to acquire or the acquisition of more than 10%
of any class of equity security of the Company if such Offer to acquire
or acquisition has been approved by two-thirds of those members of the
Board of Directors who were directors prior to the Offer to acquire or
acquisition.
C. Definitions. The following definitions shall apply to this Article
-----------
12:
1. "Affiliate" shall have the meaning ascribed to it in Rule
12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on the date of filing of these
Articles.
2. "Beneficial Ownership" (including "Beneficially Owned")
shall be determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (or any successor
rule or statutory provision), or, if said Rule 13d-3 shall be rescinded
and there shall be no successor rule or provision thereto, pursuant to
said Rule 13d-3 as in effect
-10-
on the date of filing of these Articles; provided, however, that a
Person shall, in any event, also be deemed the "beneficial owner" of
any Common Stock:
(a) which such Person or any of its Affiliates owns,
directly or indirectly; or
(b) which such Person or any of its Affiliates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding (but shall not be
deemed to be the Beneficial Owner of any Voting Shares (as
defined in Article 13) solely by reason of an agreement,
contract, or other arrangement with this Company to effect any
transaction which is described in Section A of Article 13) or
upon the exercise of conversion rights, exchange rights,
warrants, or options or otherwise, or (ii) sole or shared
voting or investment power with respect thereto pursuant to
any agreement, arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the Beneficial Owner
of any Voting Shares solely by reason of a revocable proxy
granted for a particular meeting of stockholders, pursuant to
a public solicitation of proxies for such meeting, with
respect to shares of which neither such Person nor any such
Affiliate is otherwise deemed the Beneficial Owner); or
(c) which are owned directly or indirectly, by any
other Person with which such first mentioned Person or any of
its Affiliates acts as a partnership, limited partnership,
syndicate or other group pursuant to any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock of
this Company;
and provided further, however, that (1) no director or officer of this
Company (or any Affiliate of any such director or officer) shall,
solely by reason of any or all of such directors or officers acting in
their capacities as such, be deemed, for any purposes hereof, to
Beneficially Own any Common Stock Beneficially Owned by any other such
director or officer (or any Affiliate thereof), and (2) neither any
employee stock ownership or similar plan of this Company or any
subsidiary of this Company, nor any trustee with respect thereto or any
Affiliate of such trustee (solely by reason of such capacity of such
trustee), shall be deemed, for any purposes hereof, to Beneficially Own
any Common Stock held under any such plan. For purposes of computing
the percentage Beneficial Ownership of Common Stock of a Person, the
outstanding Common Stock shall include shares deemed owned by such
Person through application of this subsection but shall not include any
other Common Stock which may be issuable by this Company pursuant to
any agreement, or upon exercise of conversion rights, warrants or
options, or otherwise. For all other purposes, the outstanding Common
Stock shall include only Common Stock then outstanding and shall not
include any Common Stock which may be issuable by this Company pursuant
to any agreement, or upon the exercise of conversion rights, warrants
or options, or otherwise.
3. The term "Offer" shall mean every written offer to buy or
acquire, solicitation of an offer to sell, tender offer or request or
invitation for tender of, a security or interest in a security for
value; provided that the term "Offer" shall not include (i) inquiries
directed solely to the management of the Company and not intended to be
communicated to stockholders which are designed to elicit an indication
of management's receptivity to the basic structure of a potential
acquisition with respect to the amount of cash and or securities,
manner of acquisition and formula for determining price, or (ii)
non-binding expressions of understanding or letters of intent with the
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management of the Company regarding the basic structure of a potential
acquisition with respect to the amount of cash and/or securities,
manner of acquisition and formula for determining price.
4. A "Person" shall mean any individual, firm, corporation, or
other entity.
D. Board Determinations. The Board of Directors shall have the power to
--------------------
construe and apply the provisions of this Article 12 and to make all
determinations necessary or desirable to implement such provisions, including
but not limited to matters with respect to (i) the number of shares of Common
Stock Beneficially Owned by any Person, (ii) whether a Person is an Affiliate of
another, (iii) whether a Person has an agreement, arrangement, or understanding
with another as to the matters referred to in the definition of Beneficial
Ownership, (iv) the application of any other definition or operative provision
of the section to the given facts, or (v) any other matter relating to the
applicability or effect of this Article 12. Any constructions, applications, or
determinations made by the directors pursuant to this Article XII 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 Company and
its stockholders.
E. Demand for Information; Investigation. The Board of Directors shall
--------------------------------------
have the right to demand that any Person who is reasonably believed to
Beneficially Own Common Stock in excess of the Limit (or holders of record of
Common Stock Beneficially Owned by any Person in excess of the Limit) ("Holder
in Excess") supply the Company with complete information as to (i) the record
owner(s) of all shares Beneficially Owned by such Person who is reasonably
believed to own shares in excess of the Limit and (ii) any other factual matter
relating to the applicability or effect of this Article 12 as may reasonably be
requested of such Person. The Board of Directors shall further have the right to
receive from any Holder in Excess reimbursement for all expenses incurred by the
board in connection with its investigation of any matters relating to the
applicability or effect of this section on such Holder in Excess, to the extent
such investigation is deemed appropriate by the Board of Directors as a result
of the Holder in Excess refusing to supply the Company with the information
described in the preceding sentence.
F. Quorum Requirements. Except as otherwise provided by law or
--------------------
expressly provided in this Article 12, the presence in person or by proxy of the
holders of record of shares of capital stock of the Company entitling the
holders thereof to cast a majority of the votes (after giving effect, if
required, to the provisions of this Article 12) entitled to be cast by the
holders of shares of capital stock of the Company entitled to vote shall
constitute a quorum at all meetings of the stockholders, and every reference in
these Articles to a majority or other proportion of capital stock (or the
holders thereof) for purposes of determining any quorum requirement or any
requirement for stockholder consent or approval shall be deemed to refer to such
majority or other proportion of the votes (or the holders thereof) then entitled
to be cast in respect of such capital stock.
G. Enforceability. In the event any provision (or portion thereof) of
--------------
this Article 12 shall be found to be invalid, prohibited or unenforceable for
any reason, the remaining provisions (or portions thereof) of this Article 12
shall remain in full force and effect, and shall be construed as if such
invalid, prohibited or unenforceable provision had been stricken herefrom or
otherwise rendered inapplicable, it being the intent of this Company and its
stockholders that each such remaining provision (or portion thereof) of this
Article 12 remain, to the fullest extent permitted by law, applicable and
enforceable as to all stockholders, including stockholders owning an amount of
stock over the Limit, notwithstanding any such finding.
-12-
Article 13. Stockholder Approval of Business Combinations
A. General Requirement. The definitions and other provisions set forth
-------------------
in Article 12 are also applicable to this Article 13. The affirmative vote of
the holders of not less than eighty percent (80%) of the outstanding shares of
Voting Shares (as hereinafter defined) shall be required for the approval or
authorization of any "Business Combination" as defined and set forth below:
1. Any merger, consolidation, share exchange or division of
the Company or any Subsidiary of the Company with or into (i) any
Interested Shareholder (as hereinafter defined), or (ii) with,
involving or resulting in any other corporation (whether or not itself
an Interested Shareholder of the Company) which is, or after the
merger, consolidation, share exchange or division would be, an
Affiliate or Associate of the Interested Shareholder;
2. A sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or series of transactions) to or
with the Interested Shareholders or any Affiliate or Associate or such
Interested Shareholder of assets of the Company or any Subsidiary of
the Company (i) having an aggregate Market Value (as hereinafter
defined) equal to 10% or more of the aggregate Market Value of all the
assets, determined on a consolidated bases, of such Company; (ii)
having an aggregate Market Value equal to 10% or more of the aggregate
Market Value of all outstanding shares of such Company; or (iii)
representing 10% or more of the earning power or net income, determined
on a consolidated basis, of such Company.
3. The issuance or transfer by the Company or any Subsidiary
of the Company (in one or a series of transactions) of any shares of
such Company or any Subsidiary of such Company which has an aggregate
Market Value equal to 5% or more of the aggregate Market Value of all
the outstanding shares of the Company to the Interested Shareholder or
any Affiliate or Associate of such Interested Shareholder except
pursuant to the exercise of option rights to purchase shares, or
pursuant to the conversion of securities having conversion rights,
offered, or a dividend or distribution paid or made, pro rata to all
shareholders of the Company.
4. The adoption at any time of any plan or proposal for the
liquidation or dissolution of the Company proposed by, or pursuant to
any agreement, arrangement or understanding with the Interested
Shareholder or any Affiliate or Associate of such Interested
Shareholder.
5. A reclassification of securities (including, without
limitation, any split of shares, dividend of shares, or other
distribution of shares in respect of shares, or any reverse split of
shares), or recapitalization of the Company, or any merger or
consolidation of the Company with any Subsidiary of the Company, or any
other transaction (whether or not with or into or otherwise involving
the Interested Shareholder), proposed by, or pursuant to any agreement,
arrangement or understanding (whether or not in writing) with, the
Interested Shareholder or any Affiliate or Associate of the Interested
Shareholder, which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any
class or series of Voting Shares or securities convertible into Voting
Shares of the Company or any Subsidiary of the Company which is,
directly or indirectly, owned by the Interested Shareholder or any
Affiliate or Associate of the Interested Shareholder, except as a
result of immaterial changes due to fractional share adjustments.
-13-
6. The receipt by the Interested Shareholder or any Affiliate
or Associate of the Interested Shareholder of the benefit, directly or
indirectly (except proportionately as a shareholder of the Company), of
any loans, advances, guarantees, pledges or other financial assistance
or tax credits or other tax advantages provided by or through the
Company.
The affirmative vote required by this Article 13 shall be in addition
to the vote of the holders of any class or series of stock of the Company
otherwise required by law, by any other Article of these Articles of
Incorporation, as the same may be amended from time to time, by any resolution
of the Board of Directors providing for the issuance of a class or series of
stock, or by any agreement between the Company and any national securities
exchange.
B. Certain Definitions.
-------------------
1. "Share Acquisition Date" means with respect to any Person
and the Company, the date that such person first became an Interested
Shareholder of the Company.
2. The "Market Value" of the common stock of the Company shall
be the highest closing sale price during the 30-day period immediately
preceding the date in question of the share of the composite tape for
New York Stock Exchange-listed shares, or, if the shares are not quoted
on the composite tape or if the shares are not listed on the exchange,
on the principal United States securities exchange registered under the
exchange act, on which such shares are listed, or, if the shares are
not listed on any such exchange, the highest closing bid quotation with
respect to the share during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no
quotations are available, the fair market value on the date in question
of the share as determined by the Board of Directors of the Company in
good faith. In the case of property other than cash or shares, the
fair market value of the property on the date in question as
determined by the Board of Directors of the Company in good faith.
3. The term "Interested Shareholder," means any Person (other
than the Company or any Subsidiary of the Company) that:
(i) Is the Beneficial Owner, directly or indirectly,
of shares entitling that Person to cast at least 20% of the votes that
all shareholders would be entitled to cast in an election of directors
of the Company; or
(ii) Is an Affiliate or Associate of such Company and
at any time within the five-year period immediately prior to the date
in question was the Beneficial Owner, directly or indirectly, of shares
entitling that Person to cast at least 20% of the votes that all
shareholders would be entitled to cast in an election of directors of
the Company.
Exception - For the purpose of determining whether a Person is an
Interested Shareholder:
(1) The number of votes that would be entitled to be
cast in an election of directors of the Company shall be calculated by
including shares deemed to be beneficially owned by the Person through
application of the definition of "Beneficial Owner" in section 12.B,
but excluding any other unissued shares of such Company which may be
issuable pursuant to any
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agreement, arrangement or understanding, or upon exercise of
conversion or option rights or otherwise; and
(2) There shall be excluded from the Beneficial
Ownership of the Interested Shareholder any:
Shares which were acquired pursuant to a stock split, stock
dividend, reclassification or similar recapitalization with respect to
shares described under this paragraph that have been held continuously
since their issuance by the Company by the natural Person or entity
that acquired them from the Company.
For the purpose only of determining the percentage of the
outstanding shares of Voting Shares which any corporation, partnership,
person, or other entity beneficially owns, directly or indirectly, the
outstanding shares of Voting Shares will be deemed to include any
shares of Voting Shares which such corporation, partnership, person or
other entity beneficially owns pursuant to the foregoing provisions of
this subsection (whether or not such shares of Voting Shares are in
fact issued or outstanding), but shall not include any other shares of
Voting Shares which may be issuable either immediately or at some
future date pursuant to any agreement, arrangement, or understanding or
upon exercise of conversion rights, exchange rights, warrants, options,
or otherwise.
4. The term "Voting Shares" shall mean any shares of the
authorized stock of the Company entitled to vote generally in the
election of directors.
C. Exceptions. The provisions of this Article 13 shall not apply to a
----------
Business Combination which is approved by two-thirds of those members of the
Board of Directors who were directors prior to the time when the Interested
Shareholder became an Interested Shareholder (the "Continuing Directors"). The
provisions of this Article 13 also shall not apply to a Business Combination:
(1) Approved by the affirmative vote of the holders of shares
entitling such holders to cast a majority of the votes that all
shareholders would be entitled to cast in an election of directors of
the Company, not including any Voting Shares beneficially owned by the
Interested Shareholder or any Affiliate or Associate of such Interested
Shareholder, at a meeting called for such purpose no earlier than three
months after the Interested Shareholder became, and if at the time of
the meeting the Interested Shareholder is, the Beneficial Owner,
directly or indirectly, of shares entitling the Interested Shareholder
to cast at least 80% of the votes that all shareholders would be
entitled to cast in an election of directors of the Company; or
(2) Approved by the affirmative vote of all of the holders of
all of the outstanding common shares.
(3) Approved by the affirmative vote of the holders of shares
entitling such holders to cast a majority of the votes that all
shareholders would be entitled to cast in an election of directors of
the Company, not including any Voting Shares beneficially owned by the
Interested Shareholder or any Affiliate or Associate of the Interested
Shareholder, at a meeting called for such purpose no earlier than five
years after the Interested Shareholder's Share Acquisition Date.
-15-
(4) Approved at a shareholders' meeting called for such
purpose no earlier than five years after the Interested Shareholder's
Share Acquisition Date.
D. Additional Provisions. Nothing contained in this Article 13, shall
----------------------
be construed to relieve an Interested Shareholder from any fiduciary obligation
imposed by law. In addition, nothing contained in this Article 13 shall prevent
any shareholder of the Company from objecting to any Business Combination and
from demanding any appraisal rights which may be available to such shareholder.
E. Amendments. Notwithstanding any provisions of these Articles of
----------
Incorporation or the Bylaws of the Company (and notwithstanding the fact that a
lesser percentage may be specified by laws, these Articles of Incorporation or
the Bylaws of the Company), the affirmative vote of the holders of at least 80
percent of the outstanding shares entitled to vote thereon (and, if any class or
series is entitled to vote thereon separately, the affirmative vote of the
holders of at least 80 percent of the outstanding shares of each such class or
series) shall be required to amend or repeal this Article 13 or adopt any
provisions inconsistent with this Article.
Article 14. Evaluation of Offers. The Board of Directors of the
Company, when evaluating any offer to (A) make a tender or exchange offer for
any equity security of the Company, (B) merge or consolidate the Company with
another corporation or entity or (C) purchase or otherwise acquire all or
substantially all of the properties and assets of the Company, may, in
connection with the exercise of its judgment in determining what is in the best
interest of the Company and its stockholders, give due consideration to all
relevant factors, including, without limitation, the social and economic effect
of acceptance of such offer: on the Company's present and future customers and
employees and those of its subsidiaries; on the communities in which the Company
and its subsidiaries operate or are located; on the ability of the Company to
fulfill its corporate objectives as a financial institution holding company and
on the ability of its subsidiary financial institution to fulfill the objectives
of a federally insured financial institution under applicable statutes and
regulations.
Article 15. Stockholder Approval of Certain Transactions
A. Stockholder Vote. Any merger, consolidation, liquidation, or
-----------------
dissolution of the Company or any action that would result in the sale or other
disposition of all or substantially all of the assets of the Company shall
require the affirmative vote of the holders of at least eighty percent (80%) of
the outstanding shares of capital stock of the Company eligible to vote at a
legal meeting.
B. Board Approval. The provisions of Article 15.A shall not apply to a
--------------
merger, consolidation, liquidation, or dissolution of the Company or any action
that would result in the sale or other disposition of all or substantially all
of the assets of the Company, and such transaction shall require only such
stockholder vote, if any, as would be required by Pennsylvania law, if such
transaction is approved by two-thirds of the entire Board of Directors of the
Company.
Article 16. Amendment of Articles and Bylaws.
A. Articles. The Company reserves the right to amend, alter, change, or
--------
repeal any provision contained in these Articles of Incorporation, in the manner
now or hereafter prescribed by law, and all rights conferred upon stockholders
herein are granted subject to this reservation. No amendment, addition,
alteration, change, or repeal of these Articles of Incorporation shall be made
unless such amendment addition, alteration, change, or repeal is first proposed
and approved by the Board of Directors pursuant
-16-
to a resolution proposed and adopted by the affirmative vote of a majority of
the directors then in office, and thereafter is approved by the holders of a
majority (except as provided below) of the shares of the Company entitled to
vote generally in an election of directors, voting together as a single class,
as well as such additional vote of the Preferred Stock as may be required by the
provisions of any series thereof. Notwithstanding anything contained in these
Articles of Incorporation to the contrary, the affirmative vote of the holders
of at least eighty percent (80%) of the shares of the Company entitled to vote
generally in an election of directors, voting together as a single class, as
well as such additional vote of the Preferred Stock as may be required by the
provisions of any series thereof, shall be required to amend, adopt, alter,
change, or repeal any provision inconsistent with Articles 7, 8, 9, 10, 11, 12,
13, 14, 15 and 16.
B. Bylaws. The Board of Directors or stockholders may adopt, alter,
------
amend, or repeal the Bylaws of the Company. Such action by the Board of
Directors shall require the affirmative vote of a majority of the directors then
in office at any regular or special meeting of the Board of Directors. Such
action by the stockholders shall require the affirmative vote of the holders of
at least eighty percent (80%) of the shares of the Company entitled to vote
generally in an election of directors, voting together as a single class, as
well as such additional vote of the Preferred Stock as may be required by the
provisions of any series thereof.
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