CERTIFICATE OF INCORPORATION OF
COMMUNITY SAVINGS BANKSHARES, INC.
ARTICLE 1. NAME. The name of the corporation is Community Savings
Bankshares, Inc. (hereinafter referred to as the "Corporation").
ARTICLE 2. REGISTERED OFFICE AND REGISTERED AGENT. The address of the
registered office of the Corporation in the State of Delaware is 1209 Orange
Street, in the city of Wilmington, county of New Castle. The name of the
registered agent at such address is The Corporation Trust Company.
ARTICLE 3. NATURE OF BUSINESS. The purpose of the Corporation is to
engage in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE 4. CAPITAL STOCK. The total number of shares of capital stock
which the Corporation has authority to issue is 70,000,000 of which 10,000,000
shall be preferred stock, $1.00 par value per share (hereinafter the "Preferred
Stock"), and 60,000,000 shall be common stock, par value $1.00 per share
(hereinafter the "Common Stock").
The Board of Directors is hereby expressly authorized, by resolution or
resolutions to provide, out of the unissued shares of Preferred Stock, for
series of Preferred Stock. Before any shares of any such series are issued, the
Board of Directors shall fix, and hereby is expressly empowered to fix, by
resolution or resolutions, the following provisions of the shares thereof:
(a) the designation of such series, the number of shares to constitute
such series and the stated value thereof if different from the par value
thereof;
(b) whether the shares of such series shall have voting rights,
including any authority to elect directors, in addition to any voting rights
provided by law, and, if so, the terms of such voting rights, which may be
general or limited;
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions and
dates upon which such dividends shall be payable, and the preference or relation
which such dividends shall bear to the dividends payable on any shares of stock
of any other class or any other series of this class;
(d) whether the shares of such series shall be subject to redemption by
the Corporation, and, if so, the times, prices and other conditions of such
redemption;
(e) the amount or amounts payable upon shares of such series upon, and
the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, or upon any
distribution of the assets of the Corporation;
(f) whether the shares of such series shall be subject to the operation
of a retirement or sinking fund and, if so, the extent to and manner in which
any such retirement or sinking fund shall be applied to the purchase or
redemption of the shares of such series for retirement or other corporate
purposes and the terms and provisions relative to the operation thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of this
class or any other securities, and, if so, the price or prices or the rate or
rates of conversion or exchange and the method, if any, of adjusting the same,
and any other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective while any
shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock or shares of stock of any
other class or any other series of this class;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such series or of any other series of this class
or of any other class; and
(j) any other powers, preferences and relative, participating, optional
and other special rights, and any qualifications, limitations and restrictions
thereof.
The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of such
series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereon shall accrue and/or be
cumulative.
ARTICLE 5. INCORPORATOR. The name and mailing address of the sole
incorporator is as follows:
Name Address
---- -------
Community Savings, F. A. 660 U.S. Highway One
North Palm Beach, FL 33408
ARTICLE 6. PREEMPTIVE RIGHTS. No holder of the capital stock of the
Corporation shall be entitled as such, as a matter of right, to subscribe for or
purchase any part of any new or additional issue of stock of any class
whatsoever of the Corporation, or of securities convertible into stock of any
class whatsoever, whether now or hereafter authorized, or whether issued for
cash or other consideration or by way of a dividend.
2
ARTICLE 7. DIRECTORS. The business and affairs of the Corporation
shall be managed by or under the direction of a Board of Directors. Except as
otherwise fixed pursuant to the provisions of Article 4 hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect additional
directors, the number of directors shall be determined as stated in the
Corporation's Bylaws, as may be amended from time to time.
A. CLASSIFICATION AND TERM. The Board of Directors, other than those who
may be elected by the holders of any class or series of stock having preference
over the Common Stock as to dividends or upon liquidation, shall be divided into
three classes as nearly equal in number as possible, with one class to be
elected annually. The term of office of the initial directors shall be as
follows: the term of directors of the first class shall expire at the first
annual meeting of shareholders after the effective date of this Certificate of
Incorporation; the term of office of the directors of the second class shall
expire at the second annual meeting of shareholders after the effective date of
this Certificate of Incorporation; and the term of office of the third class
shall expire at the third annual meeting of shareholders after the effective
date of this Certificate of Incorporation; and, as to directors of each class,
when their respective successors are elected and qualified. At each annual
meeting of shareholders, directors elected to succeed those whose terms are
expiring shall be elected for a term of office to expire at the third succeeding
annual meeting of shareholders, unless a different term of office is necessary
to comply with the requirements of the first sentence of this Article 7.A., and
until their respective successors are elected and qualified. Shareholders of the
Corporation shall not be permitted to cumulate their votes for the election of
directors.
B. VACANCIES. Except as otherwise fixed pursuant to the provisions of
Article 4 hereof relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors, any vacancy occurring in the Board of Directors,
including any vacancy created by reason of an increase in the number of
directors, may 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 hold office for the remainder of the term to which the
director has been selected and until such director's successor shall have been
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 apportioned, provided that no decrease in
the number of directors shall shorten the term of any incumbent director.
C. REMOVAL. Subject to the rights of any class or series of stock having
preference over the Common Stock as to dividends or upon liquidation to elect
directors, any director (including persons elected by directors to fill
vacancies in the Board of Directors) may be removed from office only with cause
by an affirmative vote of not less than 80% of the Voting Shares (as defined in
Article 12 hereof and after giving effect to Article 12.D. hereof) at a duly
constituted meeting of shareholders called expressly for such purpose. Cause for
removal shall exist only if the director whose removal is proposed has been
either declared incompetent by an order of a court, convicted of a felony or of
an offense punishable by imprisonment for a term of more than one year by a
court of competent
3
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
Corporation. At least 30 days prior to such meeting of shareholders, written
notice shall be sent to the director whose removal will be considered at the
meeting.
D. EVALUATION OF ACQUISITION PROPOSALS. The Board of Directors of the
Corporation, when evaluating any offer to the Corporation or to the shareholders
of the Corporation from another party to (a) purchase for cash, or exchange any
securities or property for, any outstanding equity securities of the
Corporation, (b) merge or consolidate the Corporation with another corporation
or (c) purchase or otherwise acquire all or substantially all of the properties
and assets of the Corporation, may, consistent with the exercise of its
fiduciary duties and in connection with the exercise of its judgment in
determining what is in the best interest of the Corporation and its
shareholders, give due consideration to the extent permitted by law not only to
the price or other consideration being offered, but also to all other relevant
factors including, without limitation, the financial and managerial resources
and future prospects of the other party, the possible effects on the business of
the Corporation and its subsidiaries and on the employees, customers, suppliers
and creditors of the Corporation and its subsidiaries, the effects on the
ability of the Corporation to fulfill its corporate objectives as a holding
company and on the ability of its subsidiary savings and loan association to
fulfill its objectives as a savings and loan association, and the effects on the
communities in which the Corporation's and its subsidiaries' facilities are
located.
ARTICLE 8. MEETINGS OF SHAREHOLDERS. Any action required or permitted
by the General Corporation Law of the State of Delaware or this Certificate of
Incorporation to be approved by or consented to by the shareholders of the
Corporation, must be effected at a duly called annual or special meeting of
shareholders and may not be effected by written consent by such shareholders in
lieu of a meeting of shareholders. Except as otherwise required by law and
subject to the rights of the holders of any class or series of Preferred Stock,
special meetings of the shareholders may be called only by the Board of
Directors pursuant to a resolution approved by the affirmative vote of at least
three-fourths of the directors then in office.
ARTICLE 9. LIABILITY OF DIRECTORS AND OFFICERS. The personal liability
of the directors and officers of the Corporation for monetary damages shall be
eliminated to the fullest extent permitted by the General Corporation Law of the
State of Delaware as it exists on the effective date of this Certificate of
Incorporation or as such law may be thereafter in effect. No amendment,
modification or repeal of this Article 9 shall adversely affect the rights
provided hereby with respect to any claim, issue or matter in any proceeding
that is based in any respect on any alleged action or failure to act prior to
such amendment, modification or repeal.
ARTICLE 10. INDEMNIFICATION. The Corporation shall indemnify its
directors, officers, employees, agents and former directors, officers, employees
and agents, and any other persons serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, association,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees, judgments, fines and amounts paid in settlement)
incurred in connection
4
with any pending or threatened action, suit or proceeding, whether civil,
criminal, administrative or investigative, with respect to which such director,
officer, employee, agent or other person is a party, or is threatened to be made
a party, to the full extent permitted by the General Corporation Law of the
State of Delaware, provided, however, that the Corporation shall not be liable
for any amounts which may be due to any person in connection with a settlement
of any action, suit or proceeding effected without its prior written consent or
any action, suit or proceeding initiated by any person seeking indemnification
hereunder without its prior written consent. The indemnification provided herein
(i) shall not be deemed exclusive of any other right to which any person seeking
indemnification may be entitled under any bylaw, agreement or vote of
shareholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in any other capacity, and (ii) shall
inure to the benefit of the heirs, executors and administrators of any such
person. The Corporation shall have the power, but shall not be obligated, to
purchase and maintain insurance on behalf of any person or persons enumerated
above against any liability asserted against or incurred by them or any of them
arising out of their status as corporate directors, officers, employees, or
agents whether or not the Corporation would have the power to indemnify them
against such liability under the provisions of this Article 10.
ARTICLE 11. SHAREHOLDER APPROVAL OF CERTAIN ACTIONS. Except as set
forth in the following sentence, any action required or permitted to be taken by
the shareholders of the Corporation pursuant to Subchapter IX (Merger or
Consolidation) and Subchapter X (Sale of Assets, Dissolution and Winding Up) of
the General Corporation Law of the State of Delaware, or any successors thereto,
shall be taken upon the affirmative vote of at least 80% of the Voting Shares
(as defined in Article 12 hereof and after giving effect to Article 12.D.
hereof), as well as such additional vote of the Preferred Stock as may be
required by the provisions of any series thereof. Notwithstanding the preceding
sentence, if any such action is recommended by at least two thirds of the entire
Board of Directors (including any vacancies), the 80% shareholder vote set forth
in the preceding sentence will not be applicable, and, in such event, the action
will require only such affirmative vote as is required by law.
ARTICLE 12. RESTRICTIONS ON OFFERS AND ACQUISITIONS OF THE
CORPORATION'S EQUITY SECURITIES.
A. DEFINITIONS.
(a) ACQUIRE. The term "Acquire" includes every type of
acquisition, whether effected by purchase, exchange, operation of law or
otherwise.
(b) ACTING IN CONCERT. The term "Acting in Concert" means (i)
knowing participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise.
5
(c) AFFILIATE. An "Affiliate" of, or a Person "affiliated with",
a specified Person, means 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.
(d) ASSOCIATE. The term "Associate" used to indicate a
relationship with any Person means:
(i) Any corporation or organization (other than the
Corporation or a Subsidiary of the Corporation), or any
subsidiary or parent thereof, of which such Person is a director,
officer or partner or is, directly or indirectly, the Beneficial
Owner of 10% or more of any class of equity securities;
(ii) Any trust or other estate in which such Person has
a 10% or greater beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity, provided,
however, such term shall not include any employee stock benefit
plan of the Corporation or a Subsidiary of the Corporation in
which such Person has a 10% or greater beneficial interest or
serves as a trustee or in a similar fiduciary capacity;
(iii) Any relative or spouse of such Person (or any
relative of such spouse) who has the same home as such Person or
who is a director or officer of the Corporation or a Subsidiary
of the Corporation (or any subsidiary or parent thereof); or
(iv) Any investment company registered under the
Investment Company Act of 1940 for which such Person or any
Affiliate or Associate of such Person serves as investment
advisor.
(e) BENEFICIAL OWNER (INCLUDING BENEFICIALLY OWNED). A Person
shall be considered the "Beneficial Owner" of any shares of stock (whether or
not owned of record):
(i) With respect to which such Person or any Affiliate
or Associate of such Person directly or indirectly has or shares
(A) voting power, including the power to vote or to direct the
voting of such shares of stock, and/or (B) investment power,
including the power to dispose of or to direct the disposition of
such shares of stock;
(ii) Which such Person or any Affiliate or Associate of
such Person has (A) 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, and/or (B) the right to vote pursuant to
any agreement, arrangement or understanding (whether such right
is exercisable immediately or only after the passage of time); or
(iii) Which are Beneficially Owned within the meaning of
(i) or (ii) of this Article 12.A.(e) by any other Person with
which such first-mentioned Person or any of its
6
Affiliates or Associates either (A) has any agreement,
arrangement or understanding, written or oral, with respect to
acquiring, holding, voting or disposing of any shares of stock of
the Corporation or any Subsidiary of the Corporation or
acquiring, holding or disposing of all or substantially all, or
any Substantial Part, of the assets or business of the
Corporation or a Subsidiary of the Corporation, or (B) is Acting
in Concert. For the purpose only of determining whether a Person
is the Beneficial Owner of a percentage specified in this Article
10 of the outstanding Voting Shares, such shares shall be deemed
to include any Voting Shares which may be issuable pursuant to
any agreement, arrangement or understanding or upon the exercise
of conversion rights, exchange rights, warrants, options or
otherwise and which are deemed to be Beneficially Owned by such
Person pursuant to the foregoing provisions of this Article
12.A.(e), but shall not include any other Voting Shares which may
be issuable in such manner.
(f) OFFER. The term "Offer" shall mean every 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 Corporation and not intended to be communicated to shareholders 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
management of the Corporation 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.
(g) PERSON. The term "Person" shall mean any individual,
partnership, corporation, limited liability company, association, trust, group
or other entity. When two or more Persons act as a partnership, limited
partnership, syndicate, association or other group for the purpose of acquiring,
holding or disposing of shares of stock, such partnership, syndicate, associate
or group shall be deemed a "Person."
(h) SUBSTANTIAL PART. The term "Substantial Part" as used with
reference to the assets of the Corporation or of any Subsidiary means assets
having a value of more than 10% of the total consolidated assets of the
Corporation and its Subsidiaries as of the end of the Corporation's most recent
fiscal year ending prior to the time the determination is being made.
(i) SUBSIDIARY. "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or indirectly, by
the Person in question.
(j) VOTING SHARES. "Voting Shares" shall mean shares of the
Corporation entitled to vote generally in an election of directors.
(k) CERTAIN DETERMINATIONS WITH RESPECT TO ARTICLE 12. A majority
of the directors shall have the power to determine for the purposes of this
Article 12, on the basis of information known to them and acting in good faith:
(i) the number of Voting Shares of which any Person is the
7
Beneficial Owner, (ii) whether a Person is an Affiliate or Associate of another
Person, (iii) whether a Person has an agreement, arrangement or understanding
with another as to the matters referred to in the definition of "Beneficial
Owner" as hereinabove defined, and (iv) such other matters with respect to which
a determination is required under this Article 12. Any such determinations made
by the Board of Directors of the Corporation pursuant to this Article 12 shall
be conclusive and binding upon the Corporation and its shareholders. In order to
carry out its responsibilities under this Article 12, the Board of Directors
shall have the right to demand that any person who is reasonably believed to be
the Beneficial Owner of Excess Shares shall supply the Corporation with complete
information as to (x) the record owners of all shares of equity securities
Beneficially Owned by such Person and (y) any other factual matter relating to
the applicability or effect of this Article 12 as may be reasonably requested by
the Board of Directors.
(l) DIRECTORS, OFFICERS OR EMPLOYEES. Directors, officers or
employees of the Corporation or any Subsidiary thereof shall not be deemed to be
a group with respect to their individual acquisitions of any class of equity
securities of the Corporation solely as a result of their capacities as such.
B. RESTRICTIONS. Upon the effective date of the reorganization of
Community Savings, F. A. as a subsidiary of the Corporation, no Person shall
directly or indirectly Offer to Acquire or Acquire the Beneficial Ownership of
(i) more than 10% of the issued and outstanding shares of any class of an equity
security of the Corporation, or (ii) any securities convertible into, or
exercisable for, any equity securities of the Corporation if, assuming
conversion or exercise by such Person of all securities of which such Person is
the Beneficial Owner which are convertible into, or exercisable for, such equity
securities (but of no securities convertible into, or exercisable for, such
equity securities of which such Person is not the Beneficial Owner), such Person
would be the Beneficial Owner of more than 10% of any class of an equity
security of the Corporation.
C. EXCLUSIONS. The foregoing restrictions shall not apply to (i) any
Offer with a view toward public resale made exclusively to the Corporation by
underwriters or a selling group acting on its behalf, (ii) any tax-qualified
employee benefit plan or arrangement established by the Corporation and any
trustee of such a plan or arrangement, and (iii) any other Offer or acquisition
approved in advance by the affirmative vote of two-thirds of the Corporation's
entire Board of Directors (including any vacancies).
D. REMEDIES. In the event that shares are Acquired in violation of
this Article 12, all shares Beneficially Owned by any Person in excess of 10%
shall be considered "Excess Shares" and (i) shall not be counted as shares
entitled to vote and shall not be voted by any Person or counted as Voting
Shares in connection with any matters submitted to shareholders for a vote, (ii)
the Corporation is authorized to refuse to recognize a transfer or attempted
transfer of any shares of the Corporation's equity securities to any Person who
is the Beneficial Owner, or as the result of such transfer would become the
Beneficial Owner, of Excess Shares and (iii) the Board of Directors may cause
such Excess Shares to be transferred to an independent trustee for sale on the
open market or otherwise, with the expenses of such trustee to be paid out of
the proceeds of the sale.
8
For purposes of ensuring compliance with Article 12.B., in the event any
partnership, corporation, limited liability company, association or trust is
deemed to Beneficially Own more than 5% of any class of the Corporation's stock,
either by itself or together with one or more other Persons who is an Affiliate
of or Acting in Concert with such entity or who is a member of any group with
such entity with respect to the Corporation's stock, then the Corporation shall
be entitled upon written request to such entity to receive information regarding
the name and address of, and the class and number of shares of Corporation stock
which are Beneficially Owned by, each partner in such partnership, each
director, executive officer and shareholder in such corporation, each member in
such limited liability company or association, and each trustee and beneficiary
of such trust, and in each case each Person controlling such entity and each
partner, director, executive officer, shareholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation, limited
liability company, association or trust.
E. SEVERABILITY. 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 Corporation and its
shareholders 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 shareholders.
ARTICLE 13. AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS.
A. CERTIFICATE OF INCORPORATION. The Corporation reserves the right
to amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by law, and all rights
conferred upon shareholders herein are granted subject to this reservation. No
amendment, addition, alteration, change or repeal of this Certificate of
Incorporation shall be made unless it is first approved by the Board of
Directors of the Corporation pursuant to a resolution adopted by the affirmative
vote of a majority of the directors then in office, and is thereafter approved
by the holders of at least 80% of Voting Shares (as defined in Article 12 hereof
and after giving effect to Article 12.D. hereof), 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 the preceding sentence,
any amendment to this Certificate of Incorporation recommended for adoption by
at least two thirds of the entire Board of Directors (including any vacancies)
shall, to the extent the General Corporation Law of the State of Delaware
requires shareholder approval of such amendment, require the affirmative vote of
a majority of the Voting Shares (as defined in Article 12 hereof and after
giving effect to Article 12.D. hereof), 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.
B. BYLAWS. The Board of Directors or shareholders may adopt, alter,
amend or repeal the Bylaws of the Corporation. 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
9
Directors. Such action by the shareholders shall require the affirmative vote of
at least a majority of the Voting Shares (as defined in Article 12 hereof and
after giving effect to Article 12.D. hereof), as well as such additional vote of
the Preferred Stock as may be required by the provisions of any series thereof
provided, however, that the affirmative vote of at least 80% of the Voting
Shares (as defined in Article 12 hereof and after giving effect to Article 12.D.
hereof), 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, alter, change or repeal any provision of, or adopt
any provision inconsistent with, Sections 2.4, 2.14, 4.1, 4.2, 4.3, 4.4, 4.5 and
4.15 and Article VI of the Bylaws.
10
COMMUNITY SAVINGS, F. A., being the sole Incorporator herein before
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, does make this Certificate, hereby
declaring and certifying that this is the Incorporator's act and deed and that
the facts herein stated are true, and accordingly has caused this Certificate to
be signed on its behalf by the undersigned, thereunto duly authorized, on the
6th of August 1998.
COMMUNITY SAVINGS, F. A.
By: /s/ JAMES B. PITTARD, JR.
--------------------------------------------
Name: James B. Pittard, Jr.
Title: President and Chief Executive Officer
11