EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
MONADNOCK BANCORP, INC.
The undersigned, Richard S. Garabedian, whose address is 5335 Wisconsin
Avenue, N.W., Suite 400, Washington, DC 20015, being at least eighteen 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
(the "Articles"):
ARTICLE 1. NAME. The name of the corporation is Monadnock Bancorp, Inc.
(herein the "Corporation").
ARTICLE 2. PRINCIPAL OFFICE. The address of the principal office of the
Corporation in the State of Maryland is c/o CSC-Lawyers Incorporating Service
Company, 11 East Chase Street, Baltimore, Maryland 21202.
ARTICLE 3. PURPOSE. The purpose for which the Corporation is formed is
to engage in any lawful act or activity for which corporations may be organized
under the general laws of the State of Maryland as now or hereafter in force.
ARTICLE 4. RESIDENT AGENT. The name and address of the registered agent
of the Corporation in the State of Maryland is CSC-Lawyers Incorporating Service
Company, 11 East Chase Street, Baltimore, Maryland 21202. Said resident agent is
a Maryland corporation.
ARTICLE 5.
A. CAPITAL STOCK. The total number of shares of capital stock of all
classes which the Corporation has authority to issue is twelve million
(12,000,000) shares, consisting of:
1. Two million (2,000,000) shares of preferred stock, par value one
cent ($0.01) per share (the "Preferred Stock"); and
2. Ten million (10,000,000) shares of common stock, par value one
cent ($0.01) per share (the "Common Stock").
The aggregate par value of all the authorized shares of capital stock
is one hundred thousand dollars ($120,000). Except to the extent required by
governing law, rule or regulation, the shares of capital stock may be issued
from time to time by resolution approved by a majority of the Whole Board
(rounded up to the nearest whole number) without further approval of the
stockholders of the Corporation. The Corporation shall have the authority to
purchase its capital stock out of funds lawfully available therefor which funds
shall include, without limitation, the Corporation's unreserved and unrestricted
capital surplus. For the purposes of these Articles, the term "Whole Board"
shall mean the total number of directors that the Corporation would have if
there were no vacancies on the Board of Directors at the time any such
resolution is presented to the Board of Directors for adoption.
B. COMMON STOCK. Except as provided under the terms of any series of
Preferred Stock and as limited by Section D of this Article 5, the exclusive
voting power shall be vested in
the Common Stock, the holders thereof being entitled to one vote for each share
of such Common Stock standing in the holder's name on the books of the
Corporation. Subject to any rights and preferences of any series of Preferred
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
Corporation, whether voluntary or involuntary, holders of Common Stock shall be
entitled to receive pro rata the remaining assets of the Corporation after
payment or provision for payment of all debts and liabilities of the Corporation
and payment or provision for payment of any amounts owed to the holders of any
series of Preferred Stock having preference over the Common Stock on
distributions on liquidation, dissolution or winding up of the Corporation.
C. PREFERRED STOCK. The Board of Directors is hereby expressly
authorized, subject to any limitations prescribed by law, to provide for the
issuance of the shares of Preferred Stock in series, to establish from time to
time the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of the Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required by law or pursuant to the terms of such Preferred Stock.
D. RESTRICTIONS ON VOTING RIGHTS OF THE CORPORATION'S EQUITY
SECURITIES.
1. Notwithstanding any other provision of these Articles, 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 after giving effect
to the provisions hereof, multiplied by a fraction, the numerator of which is
the number of shares of such class or series 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.
2. The following definitions shall apply to this Section D of this
Article 5.
(a) An "affiliate" of a specified Person shall mean a Person that
directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control
with, the Person specified.
(b) "Beneficial ownership" 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 statutory
provision thereto,
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pursuant to said Rule 13d-3 as in effect on December 31, 2005;
provided, however, that a Person shall, in any event, also be
deemed the "beneficial owner" of any Common Stock:
(1) which such Person or any of its affiliates beneficially
owns, directly or indirectly; or
(2) 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 solely by reason of an agreement,
contract, or other arrangement with the Corporation to
effect any transaction which is described in any one or
more of the clauses of Section A of Article 9 hereof) 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
(3) which are beneficially 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
the Corporation; and provided further, however, that (i)
no director or officer of the Corporation (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 (ii) neither any
employee stock ownership or similar plan of the
Corporation or any subsidiary of the Corporation nor any
trustee with respect thereto (or any affiliate of such
trustee) shall, solely by reason of such capacity of
such trustee, 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 the Corporation pursuant to any
agreement, or upon exercise of conversion rights,
warrants or options, or otherwise. For all other
purposes, the outstanding
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Common Stock shall include only Common Stock then
outstanding and shall not include any Common Stock which
may be issuable by the Corporation pursuant to any
agreement, or upon the exercise of conversion rights,
warrants or options, or otherwise.
(c) A "Person" shall mean any individual, firm, corporation, or
other entity.
(d) The Board of Directors shall have the power to construe and
apply the provisions of this Section D 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 this Section
D to the given facts, or (v) any other matter relating to the
applicability or effect of this section.
3. 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 holds of record Common Stock beneficially owned by any Person in
excess of the Limit) (a "Holder in Excess") supply the Corporation with complete
information as to (i) the record owner(s) of all shares beneficially owned by
such Holder in Excess, and (ii) any other factual matter relating to the
applicability or effect of this section as may reasonably be requested of such
Holder in Excess. 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 Corporation with the information
described in the previous sentence.
4. Except as otherwise provided by law or expressly provided in this
Section D, the presence, in Person or by proxy, of the holders of record of
shares of capital stock of the Corporation entitling the holders thereof to cast
a majority of the votes (after giving effect, if required, to the provisions of
this Section D) entitled to be cast by the holders of shares of capital stock of
the Corporation 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.
5. Any constructions, applications, or determinations made by the
Board of Directors pursuant to this Section D 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.
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6. In the event any provision (or portion thereof) of this Section D
shall be found to be invalid, prohibited or unenforceable for any reason, the
remaining provisions (or portions thereof) of this Section D 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 the Corporation and its stockholders that
each such remaining provision (or portion thereof) of this Section D 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.
E. MAJORITY VOTE. Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of the total
number of shares of all classes of capital stock or of the total number of
shares of any class of capital stock, such action shall be valid and effective
if authorized by the affirmative vote of the holders of a majority of the total
number of shares of all classes outstanding and entitled to vote thereon, except
as otherwise provided in these Articles.
ARTICLE 6. PREEMPTIVE RIGHTS. No holder of the capital stock of the
Corporation 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 capital stock of any class or series, or any unissued bonds,
certificates of indebtedness, debentures or other securities convertible into or
exchangeable for capital stock of any class or series, or carrying any right to
purchase stock of any class or series, except such as may be established by the
Board of Directors.
ARTICLE 7. DIRECTORS. The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
A. MANAGEMENT OF THE CORPORATION. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. All
powers of the Corporation may be exercised by or under the authority of the
Board of Directors, except as conferred on or as reserved to the stockholders by
law or by these Articles or the Bylaws of the Corporation.
B. NUMBER, CLASS AND TERMS OF DIRECTORS; NO CUMULATIVE VOTING. The
number of directors constituting the Board of Directors of the Corporation shall
initially be eight, which number may be increased or decreased in the manner
provided in the Bylaws of the Corporation; provided, however, that such number
shall never be less than the minimum number of directors required by the
Maryland General Corporation Law (the "MGCL") now or hereafter in force. The
directors, other than those who may be elected by the holders of any series of
Preferred Stock, shall be divided into three classes, as nearly equal in number
as reasonably possible, with the term of office of the first class ("Class I")
to expire at the conclusion of the first annual meeting of stockholders, the
term of office of the second class ("Class II") to expire at the conclusion of
the annual meeting of stockholders one year thereafter and the term of office of
the third class ("Class III") to expire at the conclusion of the annual meeting
of stockholders two years thereafter, with each director to hold office until
his or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding
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annual meeting of stockholders after their election or for such shorter period
of time as the Board of Directors may determine, with each director to hold
office until his or her successor shall have been duly elected and qualified.
The names of the individuals who will serve as directors of the
Corporation until their successors are elected and qualify are as follows:
CLASS I DIRECTORS: TERM TO EXPIRE IN
Kenneth A. Christian 2007
Jack Goldstein 2007
Thomas C. LaFortune 2007
CLASS II DIRECTORS: TERM TO EXPIRE IN
William M. Pierce, Jr. 2008
Kenneth R. Simonetta 2008
Nancy L. Carlson 2008
CLASS III DIRECTORS: TERM TO EXPIRE IN
Edward J. Shea 2009
Samuel J. Hackler 2009
Stockholders shall not be permitted to cumulate their votes in the
election of directors.
C. VACANCIES. Any vacancies in the Board of Directors may be filled in
the manner provided in the Bylaws of the Corporation.
D. REMOVAL. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 80% of the voting power of
all of the then-outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors
(after giving effect to the provisions of Article 5 hereof) voting together as a
single class.
E. STOCKHOLDER PROPOSALS AND NOMINATIONS OF DIRECTORS. Advance notice
of stockholder nominations for the election of directors and of business to be
brought by stockholders before any meeting of the stockholders of the
Corporation shall be given in the manner provided in the Bylaws of the
Corporation.
ARTICLE 8. BYLAWS. The Board of Directors is expressly empowered to
adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or
repeal of the Bylaws of the Corporation by the Board of Directors shall require
the approval by a majority of the Whole Board (rounded up to the nearest whole
number). The stockholders shall also have power to adopt, amend or repeal the
Bylaws of the Corporation. In addition to any vote of the holders of any class
or series of stock of the Corporation required by law or by these Articles, the
affirmative vote of the holders of at least 80% of the voting power of all of
the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors
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(after giving effect to the provisions of Article 5 hereof), voting together as
a single class, shall be required for the adoption, amendment or repeal of any
provisions of the Bylaws of the Corporation by the stockholders.
ARTICLE 9. APPROVAL OF CERTAIN BUSINESS COMBINATIONS.
A. SUPER-MAJORITY VOTING REQUIREMENT; BUSINESS COMBINATION DEFINED. In
addition to any affirmative vote required by law or by these Articles, and
except as otherwise expressly provided in this Section:
1. any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (a) any Interested Stockholder (as hereinafter
defined) or (b) any other corporation (whether or not itself an Interested
Stockholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder, or any Affiliate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value (as hereafter defined) equaling or exceeding 25% or more of the combined
assets of the Corporation and its Subsidiaries; or
3. the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value equaling or
exceeding 25% of the combined assets of the Corporation and its Subsidiaries
except pursuant to an employee benefit plan of the Corporation or any Subsidiary
thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder; or
5. any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder or any Affiliate of any Interested Stockholder (a
"Disproportionate Transaction"); provided, however, that no such transaction
shall be deemed a Disproportionate Transaction if the increase in the
proportionate ownership of the Interested Stockholder or Affiliate as a result
of such transaction is no greater than the increase experienced by the other
stockholders generally;
shall require the affirmative vote of the holders of at least
80% of the voting power of the then-outstanding shares of stock of the
Corporation entitled to vote in the election of directors (the "Voting Stock"),
voting together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage
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may be specified, by law or by any other provisions of these Articles (including
those applicable to any class or series of capital stock) or in any agreement
with any national securities exchange or quotation system or otherwise.
The term "Business Combination" as used in this Article 9 shall mean
any transaction which is referred to in any one or more of paragraphs 1 through
5 of Section A of this Article 9.
B. EXCEPTION TO SUPER-MAJORITY VOTING REQUIREMENT. The provisions of
Section A of this Article 9 shall not be applicable to any particular Business
Combination, and such Business Combination shall require only the affirmative
vote of the majority of the outstanding shares of capital stock entitled to
vote, or such vote as is required by law or by these Articles, if, in the case
of any Business Combination that does not involve any cash or other
consideration being received by the stockholders of the Corporation solely in
their capacity as stockholders of the Corporation, the condition specified in
the following paragraph 1 is met or, in the case of any other Business
Combination, all of the conditions specified in either of the following
paragraphs 1 and 2 are met:
1. The Business Combination shall have been approved by a majority
of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by the
holders of Common Stock in such Business Combination shall be
equal to at least the higher of the following:
(1) (if applicable) the Highest Per Share Price, including
any brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder or any
of its Affiliates for any shares of Common Stock
acquired by it (i) within the two-year period
immediately prior to the first public announcement of
the proposal of the Business Combination (the
"Announcement Date"), or (ii) in the transaction in
which it became an Interested Stockholder, whichever is
higher; and
(2) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such
latter date is referred to in this Article 9 as the
"Determination Date"), whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by
holders of shares of any class of outstanding Voting Stock
other than Common Stock shall be equal to at least the highest
of the following (it being intended that the requirements of
this subparagraph
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(b) shall be required to be met with respect to every such
class of outstanding Voting Stock, whether or not the
Interested Stockholder has previously acquired any shares of a
particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested Stockholder for any shares
of such class of Voting Stock acquired by it (i) within
the two-year period immediately prior to the
Announcement Date, or (ii) in the transaction in which
it became an Interested Stockholder, whichever is
higher;
(2) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of
Voting Stock are entitled in the event of any voluntary
or involuntary liquidation, dissolution or winding up of
the Corporation; and
(3) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(c) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
Voting Stock. If the Interested Stockholder has paid for
shares of any class of Voting Stock with varying forms of
consideration, the form of consideration to be received per
share by holders of shares of such class of Voting Stock shall
be either cash or the form used to acquire the largest number
of shares of such class of Voting Stock previously acquired by
the Interested Stockholder. The price determined in accordance
with Section B.2. of this Article 9 shall be subject to
appropriate adjustment in the event of any stock dividend,
stock split, combination of shares or similar event.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination: (i) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to
declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any
outstanding stock having preference over the Common Stock as
to dividends or liquidation; (ii) there shall have been (X) no
reduction in the annual rate of dividends paid on the Common
Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the
Disinterested Directors, and (Y) an increase in such annual
rate of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of Common Stock,
unless the failure to so increase such annual rate is approved
by a majority of the Disinterested Directors; and (iii)
neither such Interested Stockholder nor any of its Affiliates
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shall have become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction which
results in such Interested Stockholder becoming an Interested
Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of
the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to
stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed
pursuant to such Act or subsequent provisions).
C. CERTAIN DEFINITIONS. For the purposes of this Article 9:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint venture, a pool,
a joint stock company, a trust, an unincorporated organization or similar
company, a syndicate or any other group or entity formed for the purpose of
acquiring, holding or disposing of securities.
2. "Interested Stockholder" shall mean any Person (other than the
Corporation or any holding company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of more than
10% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of more than 10%
of the voting power of the then-outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned
by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
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3. A Person shall be a "beneficial owner" of any Voting Stock:
(a) which such Person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly
within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934 as may be subsequently amended; or
(b) which such Person or any of its Affiliates or Associates 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 or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to
any agreement, arrangement or understanding (but neither such
Person nor any such Affiliate or Associate shall be deemed to
be the beneficial owner of any shares of Voting Stock solely
by reason of a revocable proxy granted for a particular
meeting of stockholders, pursuant to a public solicitation of
proxies for such meeting, and with respect to which shares
neither such Person nor any such Affiliate or Associate is
otherwise deemed the beneficial owner); or
(c) which are beneficially owned, directly or indirectly within
the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as may be subsequently amended, by any other Person with
which such Person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purposes
of acquiring, holding, voting (other than solely by reason of
a revocable proxy as described in Subparagraph (b) of this
Paragraph 3) or in disposing of any shares of Voting Stock;
provided, however, that in the case of any employee stock ownership
or similar plan of the Corporation or of any Subsidiary in which the
beneficiaries thereof possess the right to vote any shares of Voting
Stock held by such plan, no such plan nor any trustee with respect
thereto (nor 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 shares of Voting Stock held under
any such plan.
4. For the purpose of determining whether a Person is an Interested
Stockholder pursuant to Section C.2., the number of shares of Voting Stock
deemed to be outstanding shall include shares deemed owned through application
of Section C.3. except that it shall not include any shares of Voting Stock
which may be issuable pursuant to any agreement, arrangement or understanding,
or upon exercise of conversion rights, warrants or options, or otherwise.
5. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12D-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on December 31, 2005.
6. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in Section C.2., the term
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"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
7. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a member
of the Board of Directors prior to the time that the Interested Stockholder
became an Interested Stockholder, and any director who is thereafter chosen to
fill any vacancy on the Board of Directors or who is elected and who, in either
event, is unaffiliated with the Interested Stockholder, and in connection with
his or her initial assumption of office is recommended for appointment or
election by a majority of Disinterested Directors then on the Board of
Directors.
8. "Fair Market Value" means: (a) in the case of stock, the highest
closing sale price of the stock during the 30-day period immediately preceding
the date in question of a share of such stock on the Nasdaq System or any system
then in use, or, if such stock is admitted to trading on a principal United
States securities exchange registered under the Securities Exchange Act of 1934,
Fair Market Value shall be the highest sale price reported during the 30-day
period preceding the date in question, or, if no such quotations are available,
the Fair Market Value on the date in question of a share of such stock as
determined by the Board of Directors in good faith, in each case with respect to
any class of stock, appropriately adjusted for any dividend or distribution in
shares of such stock or in combination or reclassification of outstanding shares
of such stock into a smaller number of shares of such stock, and (b) in the case
of property other than cash or stock, the Fair Market Value of such property on
the date in question as determined by the Board of Directors in good faith.
9. Reference to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for any dividend
or distribution in shares of such stock or any stock split or reclassification
of outstanding shares of such stock into a greater number of shares of such
stock or any combination or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock.
10. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be received"
as used in Sections B.2.(a) and B.2.(b) of this Article 9 shall include the
shares of Common Stock and/or the shares of any other class of outstanding
Voting Stock retained by the holders of such shares.
D. CONSTRUCTION AND INTERPRETATION. A majority of the Disinterested
Directors of the Corporation shall have the power and duty to determine for the
purposes of this Article 9, on the basis of information known to them after
reasonable inquiry, (a) whether a Person is an Interested Stockholder; (b) the
number of shares of Voting Stock beneficially owned by any Person; (c) whether a
Person is an Affiliate or Associate of another; and (d) whether the assets which
are the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value
equaling or exceeding 25% of the combined assets of the Corporation and its
Subsidiaries. A majority of the Disinterested Directors shall have the further
power to interpret all of the terms and provisions of this Article 9.
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E. FIDUCIARY DUTY. Nothing contained in this Article 9 shall be
construed to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
F. MARYLAND BUSINESS COMBINATION STATUTE. Notwithstanding any contrary
provision of law, the provisions of Sections 3-601 through 3-604 of the MGCL, as
now and hereafter in force, shall not apply to any "business combination" (as
defined in Section 3-601(e) of the MGCL, as now and hereafter in force), of the
Corporation.
ARTICLE 10. EVALUATION OF CERTAIN OFFERS. The Board of Directors, when
evaluating (i) any offer of another Person (as defined in Article 9 hereof) to
(A) make a tender or exchange offer for any equity security of the Corporation,
(B) merge or consolidate the Corporation with another corporation or entity, or
(C) purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation or (ii) any other actual or proposed transaction which
would or may involve a change in control of the Corporation (whether by
purchases of shares of stock or any other securities of the Corporation in the
open market, or otherwise, tender offer, merger, consolidation, share exchange,
dissolution, liquidation, sale of all or substantially all of the assets of the
Corporation, proxy solicitation or otherwise), may, in connection with the
exercise of its business judgment in determining what is in the best interests
of the Corporation and its stockholders and in making any recommendation to the
Corporation's stockholders, give due consideration to all relevant factors,
including, but not limited to: (A) the economic effect, both immediate and
long-term, upon the Corporation's stockholders, including stockholders, if any,
who do not participate in the transaction; (B) the social and economic effect on
the present and future employees, creditors and customers of, and others dealing
with, the Corporation and its subsidiaries and on the communities in which the
Corporation and its subsidiaries operate or are located; (C) whether the
proposal is acceptable based on the historical, current or projected future
operating results or financial condition of the Corporation; (D) whether a more
favorable price could be obtained for the Corporation's stock or other
securities in the future; (E) the reputation and business practices of the other
entity to be involved in the transaction and its management and affiliates as
they would affect the employees of the Corporation and its subsidiaries; (F) the
future value of the stock or any other securities of the Corporation or the
other entity to be involved in the proposed transaction; (G) any antitrust or
other legal and regulatory issues that are raised by the proposal; (H) the
business and historical, current or expected future financial condition or
operating results of the other entity to be involved in the transaction,
including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
proposed transaction, and other likely financial obligations of the other entity
to be involved in the proposed transaction; and (I) the ability of the
Corporation to fulfill its objectives as a financial institution holding company
and on the ability of its subsidiary financial institution(s) to fulfill the
objectives of a federally insured financial institution under applicable
statutes and regulations. If the Board of Directors determines that any proposed
transaction of the type described in clause (i) or (ii) of the immediately
preceding sentence should be rejected, it may take any lawful action to defeat
such transaction, including, but not limited to, any or all of the following:
advising stockholders not to accept the proposal; instituting litigation against
the party making the proposal; filing complaints with governmental and
regulatory authorities; acquiring the stock or any of the securities of the
Corporation; selling or otherwise issuing authorized but unissued stock, other
securities or granting options or rights with respect thereto; acquiring a
company to create an antitrust or other regulatory problem for the party making
the proposal; and obtaining a more favorable offer from
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another individual or entity. This Article 10 does not create any inference
concerning factors that may be considered by the Board of Directors regarding
any proposed transaction of the type described in clause (i) or (ii) of the
first sentence of this Article 10.
ARTICLE 11. INDEMNIFICATION, ETC. OF DIRECTORS AND OFFICERS.
A. INDEMNIFICATION. The Corporation shall indemnify (1) its current and
former directors and officers, whether serving the Corporation or at its request
any other entity, to the fullest extent required or permitted by the MGCL now or
hereafter in force, including the advancement of expenses under the procedures
and to the fullest extent permitted by law, and (2) other employees and agents
to such extent as shall be authorized by the Board of Directors and permitted by
law; provided, however, that, except as provided in Section B hereof with
respect to proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
B. PROCEDURE. If a claim under Section A of this Article 12 is not paid
in full by the Corporation within 60 days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be 20 days, the indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such suit,
or in a suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall also be entitled
to be reimbursed the expense of prosecuting or defending such suit. It shall be
a defense to any action for advancement of expenses that the Corporation has not
received both (i) an undertaking as required by law to repay such advances in
the event it shall ultimately be determined that the standard of conduct has not
been met and (ii) a written affirmation by the indemnitee of his good faith
belief that the standard of conduct necessary for indemnification by the
Corporation has been met. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by the indemnitee
to enforce a right to an advancement of expenses) it shall be a defense that,
and (ii) any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard for indemnification set forth in the MGCL. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the MGCL, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article 12 or otherwise shall be on the Corporation.
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C. NON-EXCLUSIVITY. The rights to indemnification and to the
advancement of expenses conferred in this Article 12 shall not be exclusive of
any other right which any Person may have or hereafter acquire under any
statute, these Articles, the Corporation's Bylaws, any agreement, any vote of
stockholders or the Board of Directors, or otherwise.
D. INSURANCE. The Corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such Person against such expense,
liability or loss under the MGCL.
E. MISCELLANEOUS. The Corporation shall not be liable for any payment
under this Article 12 in connection with a claim made by any indemnitee to the
extent such indemnitee has otherwise actually received payment under any
insurance policy, agreement, or otherwise, of the amounts otherwise
indemnifiable hereunder. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article 12 shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
Any repeal or modification of this Article 12 shall not in any way
diminish any rights to indemnification or advancement of expenses of such
director or officer or the obligations of the Corporation arising hereunder with
respect to events occurring, or claims made, while this Article 12 is in force.
ARTICLE 12. LIMITATION OF LIABILITY. An officer or director of the
Corporation, as such, shall not be liable to the Corporation or its stockholders
for money damages, except (A) 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; (B) 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 (C) to the extent otherwise provided by the MGCL. If the MGCL 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 permitted by the MGCL, 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 or officer of the Corporation existing at the time of
such repeal or modification.
ARTICLE 13. AMENDMENT OF THE ARTICLES OF INCORPORATION. The Corporation
reserves the right to amend or repeal any provision contained in these Articles
in the manner prescribed by the MGCL, including any amendment altering the terms
or contract rights, as expressly set forth in these Articles, of any of the
Corporation's outstanding stock by classification, reclassification or
otherwise, and no stockholder approval shall be required if the approval of
stockholders is not required for the proposed amendment or repeal by the MGCL,
and all rights conferred upon stockholders are granted subject to this
reservation.
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The Board of Directors, pursuant to a resolution approved by a majority
of the Whole Board (rounded up to the nearest whole number), and without action
by the stockholders, may amend these Articles to increase or decrease the
aggregate number of shares of stock or the number of shares of stock of any
class or series that the Corporation has authority to issue
No proposed amendment or repeal of any provision of these Articles
shall be submitted to a stockholder vote unless the Board of Directors shall
have (1) approved the proposed amendment or repeal, (2) determined that it is
advisable, and (3) directed that it be submitted for consideration at either an
annual or special meeting of the stockholders pursuant to a resolution approved
by the Whole Board (rounded up to the nearest whole number). Any proposed
amendment or repeal of any provision of these Articles may be abandoned by the
Board of Directors at any time before its effective time upon the adoption of a
resolution approved by a majority of the Whole Board (rounded up to the nearest
whole number).
The amendment or repeal of any provision of these Articles shall be
approved by at least 2/3 of all votes entitled to be cast by the holders of
shares of capital stock of the Corporation entitled to vote on the matter (after
giving due effect to the provisions of Article 5 of these Articles), except that
the proposed amendment or repeal of any provision of these Articles need only be
approved by the vote of a majority of all the votes entitled to be cast by the
holders of shares of capital stock of the Corporation entitled to vote on the
matter (after giving due effect to the provisions of Article 5 of these
Articles) if the amendment or repeal of such provision is approved by the Board
of Directors pursuant to a resolution approved by at least 2/3 of the members of
the Whole Board (rounded up to the nearest whole number).
Notwithstanding any other provision of these Articles or any provision
of law which might otherwise permit a lesser vote or no vote, but in addition to
any vote of the holders of any class or series of the stock of the Corporation
required by law or by these Articles, the affirmative vote of the holders of at
least 80% of the voting power of all of the then-outstanding shares of the
capital stock of the Corporation entitled to vote generally in the election of
directors (after giving effect to the provisions of Article 5), voting together
as a single class, shall be required to amend or repeal this Article 13, Section
C, D or E of Article 5, Article 7, Article 8, Article 9, Article 11 or Article
12.
ARTICLE 14. NAME AND ADDRESS OF INCORPORATOR. The name and mailing
address of the sole incorporator are as follows:
Richard S. Garabedian, Esq.
5335 Wisconsin Ave., N.W. Suite 400
Washington, D.C. 20015
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming
a corporation under the laws of the State of Maryland, do make, file and record
this Charter, do certify that the facts herein stated are true, and,
accordingly, have hereto set my hand this 13th day of March, 2006.
/s/ Richard S. Garabedian
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Richard S. Garabedian, Incorporator
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