-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MM9sd1F4fK5SVg+eqlwAH/PC65FEs7I3ewiuugc6L1jpmY9RNem1sh5eKJsFJek4 6cCLjE7oLJAKWfPWMpvcsw== 0000950133-95-000674.txt : 19951120 0000950133-95-000674.hdr.sgml : 19951120 ACCESSION NUMBER: 0000950133-95-000674 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19951031 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHARTER ONE FINANCIAL INC CENTRAL INDEX KEY: 0000819692 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 341567092 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16311 FILM NUMBER: 95593615 BUSINESS ADDRESS: STREET 1: 1215 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 BUSINESS PHONE: 2165665300 MAIL ADDRESS: STREET 1: 1215 SUPERIOR AVENUE STREET 2: 1215 SUPERIOR AVENUE CITY: CLEVELAND STATE: OH ZIP: 44114 8-K 1 CHARTER ONE FINANCIAL, INC. FORM 8-K, 10/31/95. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 31, 1995 CHARTER ONE FINANCIAL, INC. ----------------------------------------------------------------------- (Exact name of Registrant as specified in its Charter) Delaware 0-16311 34-1567092 ----------------------------------------------------------------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification incorporation) No.) 1215 Superior Avenue, Cleveland, Ohio 44114 ----------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (216) 566-5300 ----------------------------------------------------------------------- N/A ---------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 2. Acquisition or Disposition of Assets On October 31, 1995, Charter One Financial, Inc. ("Charter One") issued the press release included as Exhibit 99 to this report and incorporated by reference herein, announcing the consummation of its merger with FirstFed Michigan Corporation ("FirstFed"), which included the merger of Charter One Bank, F.S.B. ("Charter One Bank"), a wholly owned subsidiary of Charter One, with First Federal of Michigan ("First Federal"), a wholly owned subsidiary of FirstFed. The Merger was consummated pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated as of May 30, 1995. Upon the Merger, each share of common stock, $0.01 par value, of FirstFed (the "FirstFed Common Stock") was converted into the right to receive 1.2 shares of common stock, $0.01 par value, of Charter One ("Charter One Common Stock"). The Merger Agreement was included as Exhibit 2 to Charter One's Current Report on Form 8-K for the event on May 31, 1995 (as amended), and is incorporated herein by reference. In the Merger, the assets and liabilities of FirstFed became part of Charter One and the assets and liabilities of First Federal became part of Charter One Bank. Charter One intends to integrate the operations of FirstFed into its existing operations and continue to maintain the business and physical assets of FirstFed, subject to the needs of Charter One. Based on the 18,755,926 shares of FirstFed Common Stock outstanding as of October 31, 1995, Charter One will issue 22,506,201 shares of Charter One Common Stock in connection with the Merger, for total consideration (based on the $28.375 per share closing price of Charter One Common Stock on the Nasdaq National Market on October 31, 1995) of $638.6 million. In addition, Charter One will pay approximately $26,000 in cash in lieu of fractional shares. The Consolidated Financial Statements, and the notes thereto, of FirstFed (No. 0-17829) are contained in FirstFed's Annual Report on Form 10-K for the year ended December 31, 1994 and its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31 and June 30, 1995, which were previously filed with the Securities and Exchange Commission (the "Commission") in a Registration Statement on Form S-4 (No. 33-61273), declared effective by the Commission on September 19, 1995. The foregoing information does not purport to be complete and is qualified in its entirety by reference to the Exhibits to this Report. Item 5. Other Events Special Meeting of Stockholders. On October 27, 1995, Charter One held a Special Meeting of Stockholders (the "Meeting") to consider and vote upon the Merger and certain amendments to its Restated Certificate of Incorporation (the "Charter One Certificate"). The following is a record of the voting on the matters considered at the Meeting: 2 3 (1) The approval and adoption of the Merger Agreement and the transactions contemplated thereby.
For Against Abstain Broker Non-Votes --- ------- ------- ---------------- 18,473,962 105,478 56,794 1,073,008
(2) The approval and adoption of an amendment to ARTICLE FOURTH of the Charter One Certificate to increase the number of authorized shares of Charter One Common Stock and preferred stock to 180,000,000 and 20,000,000, respectively.
For Against Abstain Broker Non-Votes --- ------- ------- ---------------- 12,950,353 5,623,203 62,678 1,073,007
(3) The approval and adoption of an amendment to Article SEVENTH of the Charter One Certificate to increase the number of authorized directors from 15 to 16.
For Against Abstain Broker Non-Votes --- ------- ------- ---------------- 19,156,709 450,445 102,088 0
(4) The approval and adoption of certain amendments to Articles FIFTH and SIXTH of the Charter One Certificate, including raising from 10% to 20% the threshold level of Charter One common stock ownership that is subject to voting restrictions.
For Against Abstain Broker Non-Votes --- ------- ------- ---------------- 17,993,942 507,534 134,757 1,073,008
In addition to the amendments to the Charter One Certificate described above, the Board of Directors of Charter One (the "Charter One Board") had adopted certain amendments to the Bylaws of Charter One which were contingent upon consummation of the Merger. The amendments to the Bylaws included provision for the following: (1) The executive officers of Charter One following the Merger are as follows: Charles J. Koch - Chairman of the Board, President and Chief Executive Officer; Richard W. Neu - Senior Vice President and Treasurer; John D. Koch - Senior Vice President; Mark D. Grossi - Senior Vice President; and Robert J. Vana - Chief Corporate Counsel and Secretary. (2) During the four-year period immediately following the Merger, the Charter One Board will consist of 16 members, one-half of whom were selected by the Charter One Board and one-half of whom were selected by the FirstFed Board. (3) The non-employee directors of Charter One and FirstFed who did not become directors of Charter One after the 3 4 Merger are entitled under the Merger Agreement to serve as directors emeriti of Charter One and to be paid fees at least as favorable as those provided to directors emeriti of Charter One as of the effective time of the Merger. (4) During the four-year period immediately following the Merger (A) Charles John Koch and Jerome L. Schostak will serve as the Chairman and Vice Chairman, respectively, of the Charter One Board; (B) the Charter One Board (and each of the committees thereof, other than the Executive Committee) will consist of an equal number of persons serving on or representing the Charter One Board and the FirstFed Board, respectively, prior to the Merger; (C) any vacancy on the Charter One Board caused by the departure of a director who was a director of Charter One prior to the Merger, or a successor thereto, will be filled with a person recommended by the remaining directors of Charter One who were directors of Charter One prior to the Merger; (D) any vacancy on the Charter One Board caused by the departure of a director who was a director of FirstFed prior to the Merger, or a successor thereto, will be filled with a person recommended by the remaining directors of Charter One who were directors of FirstFed prior to the Merger; (E) a vote of two-thirds of the entire Charter One Board will be necessary to approve (i) any amendment to the Charter One Certificate or Bylaws, (ii) any merger, acquisition, sale of substantially all of its assets, or other extraordinary transaction involving Charter One or Charter One Bank or another significant financial institution subsidiary or (iii) the dismissal or replacement of any of the executive officers of Charter One or Charter One Bank or other significant financial institution subsidiary of Charter One; (F) subject to any necessary Office of Thrift Supervision approval, the members of the Charter One Board will also be the members of the Charter One Bank Board; and (G) the members of the Executive Committee of the Charter One Board will be Charles John Koch (Chairman), Jerome L. Schostak, John D. Koch, Mark D. Grossi and Richard W. Neu. (5) The Executive Committee of the Charter One Board shall act by majority vote to carry out the policies, plans, practices and directions previously approved by the Board (or by 80% of the members of such committee) and otherwise to enable Charter One to conduct its business in the normal and regular course consistent with then current policies, plans, practices and directions. All other determinations by the Executive Committee shall require the affirmative vote of 80% of its members. The foregoing information does not purport to be complete and is qualified in its entirety by reference to the full text of the 4 5 Charter One Certificate and Bylaws, which are attached as Exhibits 4.1 and 4.2, respectively, to this Report, and incorporated by reference herein. Repositioning Transactions. During October 1995, Charter One and FirstFed incurred certain costs to effect the Merger, which included costs associated with repositioning the combined entity's statement of financial condition to conform the combined entity's interest rate risk profile with the pre-Merger interest rate risk profile of Charter One, as well as transaction costs of the Merger and costs to combine operations. The initial step of the repositioning resulted in the sale of approximately $697 million of fixed-rate mortgage-backed securities at an after tax loss of approximately $11 million, with the net proceeds and other funds used to repay $690 million of reverse repurchase agreements. In conjunction therewith, interest rate exchange agreements with a notional value of $750 million and interest rate cap agreements with a notional value of $800 million were terminated at a net loss, after tax, of $49 million. Transaction costs of the Merger and costs to combine operations totaling approximately $20 million, after tax, were also charged to operations in October. After consideration of the above-mentioned transactions, which resulted in an aggregate after-tax charge to operations of approximately $80 million, the combined entity remains well-capitalized based on regulatory guidelines. Subject to market and operating conditions, it is anticipated that additional repositioning transactions and other Merger-related costs could be incurred through December 31, 1995 and that such activities could result in additional charges to operations of up to $20 million. The Unaudited Pro Forma Combined Financial Statements of Charter One and FirstFed were contained in the Joint Proxy Statement/Prospectus filed with Charter One's Registration Statement on Form S-4 (No. 33-61273), declared effective by the Commission on September 19, 1995. Item 7. Financial Statements and Exhibits (a) Financial statements of businesses acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits. The Exhibits listed on the accompanying Exhibit Index are filed as part of this Report and are incorporated herein by reference. 5 6 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. CHARTER ONE FINANCIAL, INC. Date: November 15, 1995 By: /s/ Charles John Koch ------------------------------- Charles John Koch President and Chief Executive Officer 6 7 EXHIBIT INDEX 2 Agreement and Plan of Merger, dated as of May 30, 1995, by and between Charter One and FirstFed (previously filed with Charter One's Current Report on Form 8-K for the event on May 31, 1995 (as amended), and incorporated herein by reference) 4.1 Second Restated Certificate of Incorporation of Charter One 4.2 Bylaws of Charter One 99 Press Release of Charter One, dated October 31, 1995 EX-4.1 2 SECOND RESTATED CERTIFICATE OF INCORPORATION. 1 Exhibit 4.1 SECOND RESTATED CERTIFICATE OF INCORPORATION OF CHARTER ONE FINANCIAL, INC. CHARTER ONE FINANCIAL, INC. (the "Corporation"), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows: 1. The name of the Corporation is CHARTER ONE FINANCIAL, INC. The date of filing of its original Certificate of Incorporation with the Secretary of State was July 21, 1987. The date of filing of its first Restated Certificate of Incorporation with the Secretary of State was October 1, 1987. 2. This Second Restated Certificate of Incorporation restates and integrates and further amends the Certificate of Incorporation of the Corporation by: A. amending Article FOURTH to increase the number of authorized shares of common stock and preferred stock; B. amending Article SEVENTH to increase the number of authorized directors from 15 to 16; and C. amending Articles FIFTH and SIXTH to, among other things, raise from 10% to 20% the threshold level of common stock ownership that is subject to voting restrictions. 3. The text of the Certificate of Incorporation as amended or supplemented heretofore is further amended to read as herein set forth in full: FIRST: Corporate Title. The name of the Corporation is Charter One Financial, Inc. (the "Corporation"). SECOND: Registered Office. The address of the Corporation's registered office in the State of Delaware is Corporation Trust Center, No. 1209 Orange Street, City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company. THIRD: Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "Delaware Corporation Law"). FOURTH: A. Authorized Shares. The total number of shares of all classes of stock which the Corporation shall have authority to issue is two hundred million (200,000,000), of which one hundred eighty million (180,000,000) shall be 2 common stock, par value $.01 per share, and twenty million (20,000,000) shall be preferred stock, par value $.01 per share. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of a majority of the stock of the Corporation entitled to vote generally in the election of directors without a vote of holders of preferred stock as a class, except to the extent that any such vote may be required by any resolution providing for the issuance of series of preferred stock. B. Common Stock. Except as provided in this Article FOURTH (or in any resolution adopted by the Board of Directors pursuant hereto), the holders of the common stock shall exclusively possess all voting power. Except as provided in Article FIFTH and Article SIXTH, each holder of shares of common stock shall be entitled to one vote for each share held by such holder on all matters submitted to a vote of the common stockholders, including the election of directors. There shall be no cumulative voting rights in the election of directors. C. Preferred Stock. The shares of preferred stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized to fix and determine by resolution or resolutions adopted by a majority of the Board, including a majority of the Continuing Directors, the number of shares of each series of preferred stock and the designation thereof; any voting and other powers, preferences, and relative, participating, optional or other special rights, including the number of votes, if any, per share, and such qualifications, limitations or restrictions on any such powers, preferences and rights as shall be stated in the resolution or resolutions providing for the issue of the series. The authority of the Board of Directors with respect to each series of preferred stock shall, without limitation, include the determination, in accordance with the Delaware Corporation Law and to the full extent permitted thereby, of all aspects of any dividend rights, dividend rates, conversion rights and terms, voting rights including the number of votes, if any, per share under various conditions, redemption rights and terms including any sinking fund provisions, redemption price(s) and terms, and rights in the event of liquidation, dissolution or distribution of assets. Subject to any limitations or restrictions stated in the resolution or resolutions of the Board of Directors originally fixing the number of shares constituting a series, the Board of Directors may by resolution or resolutions likewise adopted by a majority of the Board, including a majority of the Continuing Directors, increase or decrease (but not below the number of shares of the series then outstanding) the number of shares of the series subsequent to the issue of shares of that series; and in case the number of shares of any series shall be so decreased, the shares constituting the decrease shall resume 2 3 that status which they had prior to the adoption of the resolution originally fixing the number of shares. FIFTH: A. Certain Definitions. For purposes of this Certificate of Incorporation: (i) "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms under Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on the date of the original filing of this Certificate of Incorporation; provided, however, that the Continuing Directors of the Corporation, the officers and employees of the Corporation and its Subsidiaries, the directors of Subsidiaries of the Corporation, the Corporation and its Subsidiaries, the employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any Subsidiary thereof pursuant to the terms of such plans, and trustees and fiduciaries with respect to such plans acting in such capacity shall not be deemed to be Affiliates or Associates of each other solely by virtue of their being directors, officers, employees or Beneficial Owners of securities of the Corporation or any Subsidiary thereof or by virtue of such Continuing Directors of the Corporation, such officers and employees of the Corporation and its Subsidiaries and such directors of Subsidiaries of the Corporation being fiduciaries or beneficiaries of an employee benefit plan of the Corporation or a Subsidiary of the Corporation. (ii) A Person shall be considered the "Beneficial Owner" of any security (whether or not owned of record): (a) with respect to which such Person or any Affiliate or Associate of such Person directly or indirectly has or shares (i) voting power, including the power to vote or to direct the voting of such securities and/or (ii) investment power, including the power to dispose of or to direct the disposition of such security; (b) which such Person or any Affiliate or Associate of such Person has (i) the right or obligation to acquire (whether such right or obligation is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, and/or (ii) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing and whether or not such right is exercisable immediately or only after the passage of time); or 3 4 (c) which is Beneficially Owned within the meaning of (a) or (b) of this paragraph by any other Person with which such first-mentioned Person or any of its Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing), with respect to (x) acquiring, holding, voting or disposing of such security or any security convertible into or exchangeable or exercisable for such security, or (y) acquiring, holding or disposing of all or substantially all of the assets or businesses of the Corporation or a Subsidiary of the Corporation. For the purpose only of determining whether a Person is the Beneficial Owner of a percentage specified in this Certificate of Incorporation of the outstanding shares of a class of security, such shares shall be deemed to include any shares of such class of security 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 paragraph. (iii) "Beneficially Owned" or "Beneficial Ownership" with reference to any security shall mean any security as to which a Person is the Beneficial Owner. (iv) "Continuing Director" shall mean any member of the Board of Directors of the Corporation who is not a Related Person or an Affiliate or Associate of a Related Person and who was a member of the Board of Directors prior to the first time that a Person became a Related Person, and any successor to a director if such successor is designated (before his or her initial election as a director) as a Continuing Director by a majority of Continuing Directors who are then members of the Board of Directors. If the total number of Continuing Directors, as defined in the preceding sentence, constitutes less than one-third (1/3) of the members of the Board of Directors then in office, "Continuing Director" shall mean any member of the Board of Directors. (v) "Person" means any individual, corporation, partnership, bank, association, joint stock company, trust, syndicate, unincorporated organization or similar company, or a group of "persons" acting or agreeing to act together for the purpose of acquiring, holding, voting or disposing of securities of the Corporation, including any group of "persons" seeking to combine or pool their voting or other interests in the securities of the Corporation for a common purpose, pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise. Notwithstanding the foregoing, no one or more Continuing Directors shall be deemed to be a group of persons acting 4 5 or agreeing to act together for the purpose of voting securities of the Corporation by virtue of proxies granted to them by a stockholder of the Corporation. In addition, the Continuing Directors of the Corporation, the officers and employees of the Corporation and its Subsidiaries, the directors of Subsidiaries of the Corporation, the employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any Subsidiary thereof pursuant to the terms of such plans, and trustees and fiduciaries with respect to such plans acting in such capacities shall not be deemed to be a group with respect to their Beneficial Ownership of Voting Stock of the Corporation solely by virtue of their being such directors, officers or employees of the Corporation and its Subsidiaries or by virtue of such Continuing Directors of the Corporation, such officers and employees of the Corporation and its Subsidiaries and such directors of Subsidiaries of the Corporation being fiduciaries or beneficiaries of any employee benefit plan of the Corporation or a Subsidiary of the Corporation. (vi) "Related Person" shall mean any Person (other than the Corporation, Subsidiaries of the Corporation, pension, profit sharing, employee stock ownership or other employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any Subsidiary of the Corporation pursuant to the terms of such plans and trustees of or fiduciaries with respect to such plans acting in such capacity) that purports, or is deemed, to be the Beneficial Owner of twenty percent (20%) (but for purposes of Article TENTH such percentage shall be ten percent (10%)) or more of the issued and outstanding shares of Voting Stock of the Corporation without giving effect to the provisions of paragraph A of this Article SIXTH. Notwithstanding the foregoing, except as used in Article TENTH, the term "Related Person" shall not include any Person acquiring Beneficial Ownership of shares of Voting Stock of the Corporation in excess of twenty percent (20%) of the issued and outstanding shares of Voting Stock of the Corporation if (i) the acquisition of Beneficial Ownership of such shares in excess of twenty percent (20%) of the issued and outstanding shares of Voting Stock of the Corporation was approved in advance by a majority of the Continuing Directors, or (ii) Beneficial Ownership of such excess shares was acquired at any time directly from the Corporation or a Subsidiary of the Corporation pursuant to an agreement with the Corporation or a Subsidiary of the Corporation. (vii) "Savings Bank" means Charter One Bank, F.S.B., Cleveland, Ohio. 5 6 (viii) "Subsidiary" means any Person a majority of the Voting Stock (after giving effect to any securities convertible into or exchangeable or exercisable for any Voting Stock) of which is owned by the Corporation or by one or more Subsidiaries of the Corporation. (ix) "Voting Stock" of any entity means the then outstanding shares of the entity entitled to vote generally in the election of directors, partners or trustees. B. Determinations by the Continuing Directors. A majority of the Continuing Directors shall have the power to make all determinations, which shall be conclusive and binding, with respect to this Article FIFTH, including, without limitation, (i) the amount of securities Beneficially Owned by any Person, (ii) whether a Person is an Affiliate or Associate 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 Article FIFTH to the given facts, or (v) any other matter relating to the applicability or effect of this Article FIFTH. The Corporation may, by bylaw or by resolution approved by the affirmative vote of a majority of the Continuing Directors, adopt such provisions or resolutions as are necessary to provide for the enforcement of this Article FIFTH which shall be final and conclusive. Any construction, application, or determination made by the Continuing Directors in good faith pursuant to this Article FIFTH shall be conclusive and binding upon the Corporation and its stockholders, including any Related Person. Nothing contained in this Article FIFTH shall be construed to relieve any Related Person from any fiduciary obligation imposed by law. SIXTH: A. Restrictions on Voting Rights. If at anytime there exists a Related Person, the record holders of Voting Stock of the Corporation Beneficially Owned by such Related Person shall have only the voting rights set forth in this Article SIXTH on any matter requiring their vote or consent. With respect to each vote in excess of twenty percent (20%) of the voting power of the outstanding shares of Voting Stock of the Corporation which such record holders would otherwise be entitled to cast without giving effect to this Article SIXTH, the record holders in the aggregate shall be entitled to cast only one hundredth (1/100) of a vote and the aggregate voting power of such record holders, so limited, for all shares of Voting Stock of the Corporation Beneficially Owned by the Related Person shall be allocated proportionately among such record holders. For each such record holder, this allocation shall be accomplished by multiplying the aggregate voting power, as so limited, of the outstanding shares of Voting Stock of the Corporation Beneficially Owned by the Related Person by a fraction whose numerator is the number of votes 6 7 represented by the shares of Voting Stock of the Corporation owned of record by such record holder (and which are Beneficially Owned by the Related Person) and whose denominator is the total number of votes represented by the shares of Voting Stock of the Corporation Beneficially Owned by the Related Person. A Person who is a record owner of shares of Voting Stock of the Corporation that are Beneficially Owned simultaneously by more than one person shall have, with respect to such shares, the right to cast the least number of votes that such Person would be entitled to cast under this Article SIXTH by virtue of such shares being so Beneficially Owned by any of such Persons. B. Exclusion for Employee Benefit Plans, Directors, Officers, Employees and Certain Proxies. The restriction contained in this Article SIXTH shall not apply to (i) any underwriter or member of an underwriting or selling group involving a public sale or resale of securities of the Corporation or a Subsidiary thereof; provided, however, that upon completion of the sale or resale of such securities, no such underwriter or member of such selling group is a Related Person, or (ii) any proxy granted to one or more Continuing Directors by a stockholder of the Corporation. In addition, the Continuing Directors of the Corporation, the officers and employees of the Corporation and its Subsidiaries, the directors of Subsidiaries of the Corporation, the employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any Subsidiary thereof pursuant to the terms of such plans and trustees and fiduciaries with respect to such plans acting in such capacity shall not be deemed to be a group with respect to their Beneficial Ownership of Voting Stock of the Corporation solely by virtue of their being directors, officers or employees of the Corporation or a Subsidiary thereof or by virtue of the Continuing Directors of the Corporation, the officers and employees of the Corporation and its Subsidiaries and the directors of Subsidiaries of the Corporation being fiduciaries or beneficiaries of an employee benefit plan of the Corporation or a Subsidiary of the Corporation. Notwithstanding the foregoing, no director, officer or employee of the Corporation or any of its Subsidiaries or group of any of them shall be exempt from the provisions of this Article SIXTH should any such Person or group become a Related Person. C. Determinations by the Continuing Directors. A majority of the Continuing Directors shall have the power to make all determinations, which shall be conclusive and binding, with respect to this Article SIXTH, including, without limitation, (i) the amount of securities Beneficially Owned by any Person, (ii) whether a Person is an Affiliate or Associate 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 7 8 provisions of this Article SIXTH to the given facts, or (v) any other matter relating to the applicability or effect of this Article SIXTH. The Corporation may, by bylaw or by resolution approved by the affirmative vote of a majority of the Continuing Directors, adopt such provisions or resolutions as are necessary to provide for the enforcement of this Article SIXTH which shall be final and conclusive. Any construction, application, or determination made by the Continuing Directors in good faith pursuant to this Article SIXTH shall be conclusive and binding upon the Corporation and its stockholders, including any Related Person. Nothing contained in this Article SIXTH shall be construed to relieve any Related Person from any fiduciary obligation imposed by law. D. Right of Continuing Directors to Demand Certain Information From Related Person. A majority of the Continuing Directors shall have the right to demand that any Person who after reasonable inquiry is believed to be a Related Person or a holder of record of shares of Voting Stock of the Corporation or securities convertible into, or exchangeable or exercisable for, Voting Stock of the Corporation which is believed to be Beneficially Owned by a Related Person, furnish the Corporation with accurate and complete information as to (i) the record owner(s) of all shares or securities Beneficially Owned by such Person who is so believed to be a Related Person, (ii) the number of, and class or series of, shares or securities Beneficially Owned by such Person who is so believed to be a Related Person and held of record by each such record owner and the number(s) of the stock certificate(s) or instrument(s) evidencing such shares or securities, and (iii) any other factual matter relating to the applicability or effect of this Article SIXTH, as may reasonably be requested of such Person, and such Person shall furnish such information within ten days after the receipt of such demand. E. Quorum. Except as otherwise provided by law or expressly provided in this Certificate of Incorporation, 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 applicable, to the provisions of Article FIFTH and this Article SIXTH) 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 this Certificate of Incorporation 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. 8 9 SEVENTH: A. Board of Directors. The business and affairs of the Corporation shall be under the direction of a board of directors (the "Board of Directors"), except as provided in this Certificate of Incorporation or in the Bylaws as in effect at the time of the consummation of the conversion of the Savings Bank to a capital stock savings bank and the Savings Bank concurrently becoming a subsidiary of the Corporation. The authorized number of directors shall consist of not less than seven directors nor more than 16 directors. The exact number of directors shall be fixed from time to time pursuant to a resolution adopted by the affirmative vote of a majority of the Continuing Directors, in the manner provided by the Bylaws of the Corporation. B. Election of Directors. The directors of the Corporation shall be divided into three classes: the first class, the second class and the third class. Each director shall serve for a term ending on the third annual meeting following the annual meeting at which such director was elected; provided, however, that the directors first elected to the first class shall serve for a term ending upon the election of directors at the first annual meeting next following the end of the fiscal year 1987, and the directors first elected to the second class shall serve for a term ending upon the election of directors at the second annual meeting next following the end of the fiscal year 1988, and the directors first elected to the third class shall serve for a term ending upon the election of the directors at the third annual meeting next following the end of the fiscal year 1989. At each annual election, commencing at the first annual meeting of stockholders, the successors to the class of directors whose term expires at that time shall be elected by the stockholders to hold office for a term of three years to succeed those directors whose term expires, so that the term of one class of directors shall expire each year. In the event of any change in the authorized number of directors, each director then continuing to serve as such shall nevertheless continue as director of the class of which he is a member until the expiration of his current term, or his prior resignation, disqualification, disability or removal. C. Newly Created Directorships and Vacancies. Any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, an increase in the number of authorized directors or other cause shall be filled only by the affirmative vote of a majority of the Board of Directors, including a majority of the Continuing Directors, although less than a quorum, or by the sole remaining director, or, in the event of the failure of the Board of Directors, or the Continuing Directors or sole remaining director so to act, or if the Continuing Directors so determine, by the stockholders at the next election of directors; provided, however, that if the holders of any class or classes of stock or series thereof of the Corporation, voting separately, are entitled to elect one or more 9 10 directors, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires. Any increase or decrease in the number of authorized directors may be allocated to any such class as the majority of the Continuing Directors selects in its discretion. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. D. Removal. A director may be removed only for cause as determined by the affirmative vote of the holders of at least a majority of the shares entitled to vote generally in the election of directors, which vote may only be taken at the annual meeting or at a meeting of stockholders called expressly for that purpose. Cause for removal shall be deemed to exist only if the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction or has been adjudged by a court of competent jurisdiction to be liable for gross negligence or misconduct in the performance of such director's duty to the Corporation. At least thirty (30) days prior to such meeting of stockholders, written notice shall be sent to the director or directors whose removal will be considered at such meeting. EIGHTH: Action by Written Consent. After the consummation of the conversion of the Savings Bank to a capital stock savings bank and the Savings Bank concurrently becoming a Subsidiary of the Corporation, the stockholders of the Corporation shall not be entitled to take action by written consent in lieu of taking such action at an annual or special meeting of stockholders. NINTH: Special Meetings. Special meetings of the stockholders may only be called by a majority of the Board of Directors, including a majority of the Continuing Directors. TENTH: A. Approval of Continuing Directors Required for Certain Business Combinations. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, a Business Combination with or upon a proposal by a Related Person within five years after the date the Related Person became a Related Person (the "Determination Date") shall require the approval of ninety percent (90%) of the holders of the Voting Stock of the Corporation unless such Business Combination or the acquisition of Beneficial Ownership of ten percent (10%) or more of the issued and outstanding Voting Stock of the Corporation was approved prior to the Determination Date by a vote of a majority of the Continuing 10 11 Directors or such Business Combination meets the conditions of subparagraph B(ii) of this Article TENTH. Certain defined terms used in this Article TENTH are as set forth in paragraph C below. B. Requirements for All Business Combinations with Related Persons. Notwithstanding anything to the contrary contained in this Certificate of Incorporation, a Business Combination with or upon a proposal by a Related Person that does not require the approval of ninety percent (90%) of the holders of the Voting Stock of the Corporation pursuant to paragraph A of this Article TENTH shall be approved only upon the affirmative vote of the holders of at least seventy-five percent (75%) of the Voting Stock of the Corporation that is not Beneficially Owned by the Related Person, voting together as a single class at a meeting called for such purpose no earlier than five (5) years after the Determination Date (in addition to any affirmative vote of holders of a class or series of capital stock of the Corporation required by law or by the provisions of this Certificate of Incorporation) unless all of the conditions specified in any one of the following subparagraphs (i), (ii) or (iii) are met: (i) Approval by directors. The Business Combination has been approved by a vote of a majority of the Continuing Directors; or (ii) Combination with Subsidiary. The Business Combination is solely between the Corporation and a Subsidiary of the Corporation and such Business Combination does not have the direct or indirect effect set forth in subparagraph C(i)(e) of this Article TENTH; or (iii) Price and procedural conditions. All of the following conditions have been met: (a) The aggregate amount of cash and fair market value (as of the date of the consummation of the Business Combination) of consideration other than cash to be received per share of common stock in such Business Combination by holders thereof shall be at least equal to the higher of (x) the highest per share price, including any brokerage commissions, transfer taxes and soliciting dealers' fees (with appropriate adjustments for recapitalizations, stock splits, reverse stock splits and stock dividends) paid by the Related Person for any shares of common stock acquired by it, including those shares acquired by the Related Person before the Determination Date, plus interest at the Treasury Rate, compounded quarterly, from the earliest date on which such highest per share price was paid through the consummation date of the Business Combination, less the aggregate amount of 11 12 any cash dividends paid and the market value of any dividends paid other than in cash per share of common stock since such earliest date, up to the amount of such interest, or (y) the fair market value of the common stock of the Corporation (as determined by the Continuing Directors) on the date the Business Combination is first proposed (the "Announcement Date"). (b) The aggregate amount of cash and fair market value (as of the date of the consummation of the Business Combination) of consideration other than cash to be received per share of any class or series of preferred stock in such Business Combination by holders thereof shall be at least equal to the highest of (x) the highest per share price, including any brokerage commissions, transfer taxes and soliciting dealers' fees (with appropriate adjustments for recapitalizations, reclassifications, stock splits, reverse stock splits and stock dividends) paid by the Related Person for any shares of such class or series of preferred stock acquired by it, including those shares acquired by the Related Person before the Determination Date, plus interest at the Treasury Rate, compounded quarterly, from the earliest date on which such highest per share price was paid through the consummation date of the Business Combination, less the aggregate amount of any cash dividends paid and the market value of any dividends paid other than in cash per share of such class or series of stock since such earliest date, up to the amount of such interest, (y) the fair market value of such class or series of preferred stock of the Corporation (as determined by the Continuing Directors) on the Announcement Date or the Determination Date, whichever is higher, and (z) the highest preferential amount per share of such class or series of preferred stock to which the holders thereof would be entitled in the event such shares were redeemed by the Corporation on the Announcement Date, or, if such redemption is not authorized by this Certificate of Incorporation or any resolution authorizing the issuance of such class or series of Preferred Stock, in the event of voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation (regardless of whether the Business Combination to be consummated constitutes such an event), plus the aggregate amount of any dividends declared or due as to which such holders are entitled prior to payment of dividends on some other class or series of stock (unless the aggregate amount of such dividends is included in such preferential amount). 12 13 (c) The consideration to be received by holders of a particular class or series of outstanding common or preferred stock shall be in cash or in the same form as, and upon no less favorable terms than, the Related Person has previously paid for shares of such class or series of stock. If the Related Person has paid for shares of any class or series of stock with varying forms of consideration, the form of consideration given for such series of stock in the Business Combination shall be either cash or the form of consideration used to acquire the largest number of shares of such class or series of stock previously acquired by it. (d) No Extraordinary Event occurs after the Related Person has become a Related Person and prior to the consummation of the Business Combination, or will occur as a result of or in connection with the Business Combination. (e) After the Determination Date and prior to the consummation date of the Business Combination, such Related Person has not become the Beneficial Owner of any additional shares of Voting Stock of the Corporation except: (i) as part of the transaction which resulted in such Related Person becoming a Related Person, (ii) as part of a transaction approved in advance by a majority of the Continuing Directors, (iii) by virtue of proportionate stock splits, stock dividends or other distributions of stock in respect of stock not constituting a Business Combination under subparagraph C(i)(e) of this Article TENTH, or (iv) through purchase by such Related Person at any price which, if such price had been paid in an otherwise permissible Business Combination the Announcement Date and consummation date of which were the date of such purchase, would have satisfied the requirements of subparagraphs B(iii)(a), (b) and (c) of this Article TENTH. (f) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Exchange Act and the General Rules and Regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) is mailed to public stockholders of the Corporation not less than thirty (30) days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required pursuant to the Exchange Act or subsequent provisions) and shall contain at the front thereof in a prominent place the recommendation, if any, of the Continuing 13 14 Directors as to the advisability or inadvisability of the Business Combination and of any investment banking firm selected by a majority of the Continuing Directors as to the fairness of the Business Combination from the point of view of the stockholders of the Corporation other than the Related Person. C. Certain Definitions. For purposes of this Certificate of Incorporation: (i) "Business Combination" shall mean any of the following transactions, when entered into by the Corporation or a Subsidiary of the Corporation with, or upon a proposal by, a Related Person or any Affiliate or Associate thereof: (a) the acquisition, merger or consolidation of the Corporation or any Subsidiary of the Corporation; or (b) the sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one or a series of transactions) of any assets of the Corporation or any Subsidiary of the Corporation having an aggregate fair market value of five million dollars ($5,000,000) or more; or (c) the issuance or transfer by the Corporation or any Subsidiary of the Corporation (in one or a series of transactions) of securities of the Corporation or that Subsidiary having an aggregate fair market value of five million dollars ($5,000,000) or more; or (d) the adoption of a plan or proposal for the liquidation or dissolution of the Corporation or any Subsidiary of the Corporation; or (e) the reclassification of securities (including a reverse stock split), recapitalization, consolidation or any other transaction (whether or not involving a Related Person) which has the direct or indirect effect of increasing the voting power, whether or not then exercisable, of a Related Person in any class or series of capital stock of the Corporation or any Subsidiary of the Corporation; or (f) any agreement, contract or other arrangement providing directly or indirectly for any of the foregoing or any amendment or repeal of this Article TENTH. 14 15 (ii) "Extraordinary Event" shall mean, as to any Business Combination and Related Person, any of the following events that is not approved by a majority of the Board of Directors, including a majority of the Continuing Directors: (a) any failure to declare and pay at the regular date thereof any full quarterly dividend (whether or not cumulative) on outstanding preferred stock; or (b) any reduction in the annual rate of dividends paid on the common stock (except as necessary to reflect any subdivision of the common stock); or (c) any failure to increase the annual rate of dividends paid on the common stock as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction that has the effect of reducing the number of outstanding shares of the common stock; or (d) the receipt by the Related Person, after the Determination Date, of a direct or indirect benefit (except proportionately as a stockholder) from any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation or any Subsidiary of the Corporation whether in anticipation of or in connection with the Business Combination or otherwise. (iii) "Treasury Rate" shall mean the per annum average yield to maturity for actively traded marketable United States Treasury fixed interest rate securities (adjusted to constant maturities of five years), as last published by the Board of Governors of the Federal Reserve System prior to the date from which such rate is to be paid or, if not so published, as last published prior to such date by any Federal Reserve Bank or United States Government department or agency selected by a majority of the Continuing Directors. (iv) In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash" as used in paragraphs B(iii)(a) and B(iii)(b) of this Article TENTH shall include the shares of common stock and/or the shares of any other class of preferred stock retained by the holders of such shares. D. Determinations by Continuing Directors. A majority of the Continuing Directors shall have the power to make all determinations, which shall be conclusive and binding, with 15 16 respect to this Article TENTH, including, without limitation, the transactions that are Business Combinations or Extraordinary Events, the persons who are Related Persons, the time at which a Related Person became a Related Person, and the fair market value of any assets, securities or other property, and any other matter relating to the applicability or effect of this Article TENTH. E. Related Persons Not Relieved of Fiduciary Obligations. Nothing contained in this Article TENTH shall be construed to relieve any Related Person from any fiduciary obligation imposed by law. ELEVENTH: Criteria for Evaluating Certain Offers. The Board of Directors of the Corporation, when evaluating any offer to (i) make a tender or exchange offer for the common stock of the Corporation, (ii) merge or consolidate the Corporation or any Subsidiary of the Corporation with another institution, or (iii) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, may, in connection with the exercise of its judgment in determining what is in the best interests of the Corporation and its stockholders, give due consideration to all relevant factors, including, without limitation, (u) the social, legal and economic effects of acceptance of such offer on depositors, borrowers and employees of the insured institution Subsidiary or Subsidiaries of the Corporation, and on the communities in which such Subsidiary or Subsidiaries operate or are located, (x) the effects of acceptance of such offer on the ability of such Subsidiary or Subsidiaries to fulfill the objectives of an insured institution under applicable federal statutes and regulations, (y) the consideration being offered in relation to (a) the then current market price for the Corporation's outstanding shares of capital stock, (b) the then current value of the Corporation in a freely negotiated transaction and (c) the Board of Directors' estimate of the future value of the Corporation (including the unrealized value of its properties and assets) as an independent going concern; and (z) such other factors as the directors deem relevant. TWELFTH: Indemnification. A. Actions, Suits or Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, partner, member or trustee of another 16 17 corporation, including, without limitation, any Subsidiary of the Corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges, expenses (including attorneys' fees and related disbursements), judgments, fines (including, without limitation, ERISA excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by such person or on such person's behalf in connection with such action, suit or proceeding and any appeal therefrom, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful; provided, however, that, except as provided in paragraph F hereof with respect to proceedings seeking to enforce rights of indemnification, the Corporation shall indemnify such person seeking indemnification with respect to a proceeding (or part thereof) initiated by such person only if such proceeding or part thereof was authorized by a majority of the Continuing Directors. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. B. Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was or has agreed to become a director or officer of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, partner, member or trustee of another corporation, including, without limitation, any Subsidiary of the Corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, or by reason of any action alleged to have been taken or omitted in such capacity, against costs, charges and expenses (including attorneys' fees and related disbursements) actually and reasonably incurred by such person or on such person's behalf in connection with the defense or settlement of such action or suit and any appeal therefrom, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been 17 18 adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such costs, charges and expenses which the Court of Chancery or such other court shall deem proper. Notwithstanding the provisions of this paragraph B, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except with respect to proceedings seeking to enforce rights to indemnification pursuant to paragraph F), only if such proceeding (or part thereof) was authorized by a majority of the Continuing Directors. C. Indemnification for Costs, Charges and Expenses of Successful Party. Notwithstanding the other provisions of this Article TWELFTH, to the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any action, suit or proceeding referred to in paragraphs A and B of this Article TWELFTH, or in defense of any claim, issue or matter therein, such person shall be indemnified against all costs, charges and expenses (including attorneys' fees) actually and reasonably incurred by such person or on such person's behalf in connection therewith. D. Determination of Right to Indemnification. Any indemnification under paragraphs A and B of this Article TWELFTH shall be made by the Corporation as authorized in the specific case upon a determination (i) by the Board of Directors by a majority vote of a quorum of the directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, if a majority of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion that indemnification of the person seeking indemnification is proper in the circumstances because he or she has met the applicable standard of conduct set forth in paragraphs A and B of this Article TWELFTH. Should a determination be made by the Corporation hereunder that indemnification is not proper under the circumstances, a court may order the Corporation to make indemnification pursuant to paragraphs A or B of this Article TWELFTH. E. Advance of Costs, Charges and Expenses. Costs, charges and expenses (including attorneys' fees and related disbursements) incurred by a person referred to in paragraphs A or B of this Article TWELFTH in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding; provided, however, that, if the Delaware Corporation Law so requires, the payment of such 18 19 expenses incurred by an officer or director of the Corporation in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including without limitation, service to an employee benefit plan) in advance of the final disposition of such action, suit or proceeding shall be made only upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Corporation as authorized in this Article TWELFTH. A majority of the Continuing Directors may, upon approval of an indemnified person, authorize the Corporation's counsel to represent such person, in any action, suit or proceeding, whether or not the Corporation is a party to such action, suit or proceeding. F. Procedure for Indemnification: Right of Claimant to Bring Suit. Any indemnification under paragraphs A, B and C, or advance of costs, charges and expenses under paragraph E of this Article TWELFTH, shall be made promptly, and in any event within 60 days (or in the case of any advance of costs, charges and expenses under paragraph E, within 20 days), upon the written request of the person referred to in such paragraphs. The right to indemnification or advances as granted by this Article TWELFTH shall be enforceable by the persons referred to in paragraphs A, B, C and E in any court of competent jurisdiction, if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the applicable time period specified in the preceding sentence hereof. The costs, charges and expenses incurred by a person referred to in paragraph A or B of this Article TWELFTH in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under paragraph E of this Article TWELFTH where the required undertaking, if any, has been received by the Corporation) that the claimant has not met the standard of conduct set forth in paragraphs A or B of this Article TWELFTH, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the claimant has met the applicable standard of conduct set forth in paragraphs A or B of this Article TWELFTH, nor the fact that there has been an actual determination by the Corporation (including its Board of Directors or its independent legal counsel) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. 19 20 G. Other Rights; Continuation of Right to Indemnification. The indemnification and advancement of expenses provided by this Article TWELFTH shall not be deemed exclusive of any other rights to which a person seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), bylaw, agreement, vote of stockholder or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding office or while employed by or acting as agent for the Corporation, and the indemnification and advancement of expenses provided by this Article TWELFTH shall continue as to a person who has ceased to serve in a capacity referred to in paragraph A or B and shall inure to the benefit of the estate, heirs, executors and administrators of such person. Nothing contained in this Article TWELFTH shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements between the Corporation and directors, officers, employees or agents providing indemnification rights and procedures different from those set forth herein. All rights to indemnification and advancement of expenses under this Article TWELFTH shall be deemed to be a contract between the Corporation and each person referred to in paragraph A or B of this Article TWELFTH who serves or served in such capacity at any time while this Article TWELFTH is in effect. Any repeal or modification of this Article TWELFTH or any repeal or modification of relevant provisions of the Delaware Corporation Law or any other applicable laws shall not in any way diminish any rights to indemnification of any person referred to in paragraph A or B of this Article TWELFTH or the obligations of the Corporation arising hereunder with respect to any action, suit or proceeding arising out of, or relating to, any actions, transactions or facts occurring prior to the final adoption of such modification or repeal. H. Indemnification of Employees and Agents of the Corporation. The Corporation may, to the extent authorized from time to time by a majority vote of the disinterested directors, indemnify any employee or agent of the Corporation or any person who is or was serving or has agreed to serve at the request of the Corporation as an employee or agent of any corporation, including, without limitation, any Subsidiary of the Corporation, partnership, joint venture, trust or other enterprise and pay the expenses incurred by any such person in defending any proceeding in advance of its final disposition, to the fullest extent of the provisions of this Article TWELFTH. I. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to become a director, officer, employee or agent of the Corporation, or is or was serving or has agreed to serve at the request of the Corporation as a director, officer, partner, member, trustee, employee or agent of another corporation, including, without limitation, any Subsidiary of 20 21 the Corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, against any liability asserted against such person and incurred by such person or on his or her behalf in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article TWELFTH. J. Savings Clause. If this Article TWELFTH or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each person referred to paragraph A or B of this Article TWELFTH as to any cost, charge and expense (including attorneys' fees and related disbursements), judgment, fine (including, without limitation, ERISA excise taxes and penalties) and amount 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 Corporation, to the full extent permitted by any applicable portion of this Article TWELFTH that shall not have been invalidated and to the full extent permitted by applicable law. K. Subsequent Legislation. If the Delaware Corporation Law is hereafter amended to further expand the indemnification permitted to persons referred to in paragraphs A and B of this Article TWELFTH, then the Corporation shall indemnify such persons to the fullest extent permitted by the Delaware Corporation Law, as so amended. THIRTEENTH: A. Prevention of Greenmail. Except as set forth in paragraph B of this Article THIRTEENTH, in addition to any affirmative vote of stockholders required by law or this Certificate, any direct or indirect purchase or other acquisition by the Corporation of any Equity Security of any class from any Interested Person shall require the affirmative vote of the holders of at least seventy-five percent (75%) of the Voting Stock of the Corporation that is not Beneficially Owned by such Interested Person, 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 may be specified, by law or any agreement with any national securities exchange or quotation system, or otherwise. Certain defined terms used in this Article THIRTEENTH are as set forth in paragraph C below. B. When a Vote is Not Required. The provisions of paragraph A of this Article THIRTEENTH shall not be applicable with respect to: (i) any purchase or other acquisition of securities made as part of a tender or exchange offer by the Corporation or a Subsidiary of the Corporation to purchase securities of the same class made on the same 21 22 terms to all holders of such securities and complying with the applicable requirements of the Exchange Act and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations); (ii) any purchase or acquisition made pursuant to an open market purchase program approved by a majority of the Board of Directors, including a majority of the Continuing Directors; or (iii) any purchase or acquisition which is approved by a majority of the Board of Directors, including a majority of the Continuing Directors, and which is made at no more than the Market Price, on the date that the understanding between the Corporation and the Interested Person is reached with respect to such purchase (whether or not such purchase is made or a written agreement relating to such purchase is executed on such date), of shares of the class of Equity Security to be purchased. C. Certain Definitions. For the purposes of this Article THIRTEENTH: (i) The term Interested Person shall mean any Person (other than the Corporation, Subsidiaries of the Corporation, pension, profit sharing, employee stock ownership or other employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any of its Subsidiaries pursuant to the terms of such plans and trustees and fiduciaries with respect to any such plan acting in such capacity) that is the direct or indirect Beneficial Owner of five percent (5%) or more of the Voting Stock of the Corporation, and any Affiliate or Associate of any such person. (ii) The Market Price of shares of a class of Equity Security on any day shall mean the highest sale price of shares of such class of Equity Security on such day, or, if that day is not a trading day, on the trading day immediately preceding such day, on the national securities exchange or the Nasdaq National Market System on which such class of Equity Security is traded. (iii) The term Equity Security shall mean any security described in Section 3(a)(11) of the Exchange Act, as in effect on the date hereof, which is traded on a national securities exchange or the Nasdaq National Market System. (iv) For purposes of this Article THIRTEENTH, all references to the term Related Person in the definition of Continuing Director shall be deemed to refer to the term Interested Person. 22 23 FOURTEENTH: Limitation of Directors' Liability. A director of this Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except: (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware Corporation Law is hereafter amended to further eliminate or limit the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware Corporation Law, as so amended. Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. FIFTEENTH: Amendment of Bylaws. The Bylaws of the Corporation may be adopted, amended or repealed by the affirmative vote of the holders of shares entitling such holders to cast at least seventy-five percent (75%) of the total votes eligible to be cast at a meeting duly called and held, or by a resolution adopted by the Board of Directors, including a majority of the Continuing Directors. SIXTEENTH: Amendment of Certificate. 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 statute. Notwithstanding the foregoing, (i) the vote of holders of ninety percent (90%) of the shares eligible to be cast at a meeting duly called and held shall be required to amend or repeal paragraph A of Article TENTH or adopt provisions inconsistent therewith; (ii) the vote of holders of at least seventy-five percent (75%) of the Voting Stock of the Corporation that is not Beneficially Owned by a Related Person shall be required to amend, repeal, or adopt any provision inconsistent with any other paragraph of Article TENTH of this Certificate of Incorporation; (iii) the affirmative vote of the holders of shares entitling such holders to cast at least seventy-five percent (75%) (or such greater proportion as may otherwise be required pursuant to any specific provision of this Certificate of Incorporation) of the total votes eligible to be cast at a meeting duly called and held shall be required to amend, repeal, or adopt Articles or any provisions inconsistent with Articles FIFTH through SIXTEENTH of this Certificate of Incorporation and (iv) the vote of holders of at least seventy-five percent (75%) of the Voting Stock of the Corporation that is not Beneficially Owned by an Interested Person shall also be required to amend, repeal, or adopt any 23 24 provision inconsistent with Article THIRTEENTH of this Certificate of Incorporation. SEVENTEENTH: A. Savings Clause. In the event any provision (or portion thereof) of this Certificate of Incorporation shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Certificate of Incorporation 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 stockholders that each such remaining provision (or portion thereof) of this Certificate of Incorporation remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders notwithstanding any such finding. B. Non-enforceability of Provisions if Would Cause Delisting. No provision (or portion thereof) of this Certificate of Incorporation shall be enforceable in a manner which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of an outstanding class or series of common stock of the Corporation if (i) the Board of Directors receives a written opinion of counsel, who shall be selected by a majority of the Continuing Directors, that the manner of enforcing such provision (or portion thereof), in the particular case, would prevent the continuance of (A) listing of the common stock of the Corporation on each national securities exchange on which the common stock is then listed and (B) quotation and/or transaction reporting of the common stock of the Corporation through each interdealer quotation system of a national securities association on which the common stock is then authorized for quotation or transaction reporting, (ii) a majority of the Continuing Directors determines that the delisting of the common stock from each such exchange and the removal of the common stock from eligibility for inclusion on each such interdealer quotation system is likely to have a material adverse effect on the market for the common stock, and (iii) a certificate, signed by a majority of the Continuing Directors, certifying that the conditions of clauses (i) and (ii) have been satisfied is filed with the Secretary of the Corporation. If such a certificate has been so filed, a copy thereof shall be made available to each stockholder of record of the Corporation who delivers a written request therefor to the Secretary of the Corporation. The first sentence of this paragraph notwithstanding, the provisions of this Certificate of Incorporation shall remain applicable and enforceable as to all stockholders in any manner which, in the written opinion of counsel selected by a majority of the Continuing Directors, would not prevent the continued listing of common stock of the Corporation on any national securities exchange on which the common stock is then listed or quotation and/or transaction reporting of the common stock of the Corporation through any interdealer quotation 24 25 system of a national securities association on which the common stock is then authorized for quotation or transaction reporting. 4. This Second Restated Certificate of Incorporation was duly adopted by a vote of the stockholders in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, Charter One Financial, Inc. has caused this Second Restated Certificate of Incorporation to be signed by Charles John Koch, its Chairman of the Board, President and Chief Executive Officer, and attested by Robert J. Vana, its Chief Corporate Counsel and Corporate Secretary, this 30th day of October, 1995. CHARTER ONE FINANCIAL, INC. By: /s/CHARLES JOHN KOCH ---------------------------- Charles John Koch Chairman of the Board, President and Chief Executive Officer ATTEST: By: /s/ROBERT J. VANA ---------------------------- Robert J. Vana Chief Corporate Counsel and Corporate Secretary 25 EX-4.2 3 BYLAWS OF CHARTER ONE. 1 Exhibit 4.2 BYLAWS OF CHARTER ONE FINANCIAL, INC. (A Delaware Corporation) ARTICLE I OFFICES SECTION 1. Registered Office. The registered office of Charter One Financial, Inc. (hereinafter referred to as the "Corporation") within the State of Delaware is Corporation Trust Center No. 1209 Orange Street, City of Wilmington, County of New Castle, and the name of the registered agent at that address in charge thereof is The Corporation Trust Company. SECTION 2. Other Offices. The Corporation may also have offices at such other places, either within or without the State of Delaware, as the Board of Directors may from time to time designate or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS SECTION 1. Place of Meetings. All meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be stated in the notice of meeting or in a duly executed waiver thereof. SECTION 2. Annual Meeting. The annual meeting of stockholders, commencing with fiscal year 1988, shall be held on the first Wednesday of May in each fiscal year, if not a legal holiday, and if a legal holiday, then on the next succeeding day not a legal holiday, at 2:00 P.M., or at such other date and time as shall be designated from time to time by the Board of Directors and stated in the notice of meeting or in a duly executed waiver thereof. At such annual meeting, the stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting. SECTION 3. Special Meetings. Special meetings of stockholders may only be called as provided in Article NINTH of the Certificate of Incorporation. SECTION 4. Notice of Meetings. Except as otherwise expressly required by statute, written notice of each annual and special meeting of stockholders stating the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder of record entitled to vote thereat not less than ten (10) nor more than sixty (60) days before the date of the meeting. 2 Notice shall be given personally or by mail and, if by mail, shall be sent in a postage prepaid envelope, addressed to the stockholder at his address as it appears on the records of the Corporation. Notice by mail shall be deemed given at the time when the same shall be deposited in the United States mail, postage prepaid. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when such person attends the meeting in person or by proxy for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, or who, either before or after the meeting, shall submit a signed written waiver of notice, in person or by proxy. Neither the business to be transacted at, nor the purpose of, an annual or special meeting of stockholders need be specified in any written waiver of notice. SECTION 5. Stockholders List. The officer who has charge of the stock transfer books of the Corporation shall prepare and make, in the time and manner required by applicable law, a list of stockholders entitled to vote and shall make such list available for such purposes, at such places, at such times and to such persons as required by applicable law. The stock transfer books shall be the only evidence as to the identity of the stockholders entitled to examine the stock transfer books or to vote in person or by proxy at any meeting of stockholders. SECTION 6. Quorum, Adjournments. The holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of stockholders, except as otherwise provided by statute or by Article SIXTH of the Certificate of Incorporation. The stockholders entitled to vote and present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders entitled to vote to leave less than a quorum then present and represented. Any stockholders' meeting, annual or special, whether or not a quorum is present or represented, may be adjourned from time to time by the vote of the holders of a majority of the stock entitled to vote thereat, the holders of which are either present in person or represented by proxy, but in the absence of a quorum no other business may be transacted at such meeting. At any adjourned meeting, at which a quorum should be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified, except for such business as was duly transacted at any earlier meeting. If the adjournment is for more than thirty (30) days, or if after adjournment a new record date is set, a notice of the adjourned meeting shall be given as in the case of an original meeting to each stockholder of record entitled to vote at the meeting. SECTION 7. Organization. At each meeting of stockholders, the Chairman of the Board or, in his absence or if one shall not have been elected, the President or such other person as the Board of Directors may have designated shall call to order any meeting of 2 3 the stockholders and act as chairman of the meeting. The Secretary or, in his absence or inability to act, the person whom the chairman of the meeting shall appoint secretary of the meeting shall act as secretary of the meeting and keep the minutes thereof. SECTION 8. Order of Business. The order of business and the procedure at all meetings of the stockholders shall be as determined by the chairman of the meeting, unless otherwise prescribed by law or regulation. SECTION 9. Voting. Except as otherwise provided by statute or the Certificate of Incorporation, each stockholder of the Corporation shall be entitled at each meeting of stockholders to one vote for each share of capital stock of the Corporation standing in his name on the record of stockholders of the Corporation: (a) on the date fixed pursuant to the provisions of Section 7 of Article V of these Bylaws as the record date for the determination of the stockholders who shall be entitled to notice of and to vote at such meeting; or (b) if no such record date shall have been so fixed, then at the close of business on the day next preceding the day on which notice thereof shall be given, or, if notice is waived, at the close of business on the date next preceding the day on which the meeting is held. Each stockholder entitled to vote at any meeting of stockholders may authorize another person or persons to act for him by a proxy signed by such stockholder or his attorney-in-fact, but no proxy shall be voted after three years from its date, unless the proxy provides for a longer period. Any such proxy shall be delivered to the secretary of the meeting at or prior to the time designated in the order of business for so delivering such proxies. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the issued and outstanding stock of the Corporation entitled to vote thereon (after giving effect, if applicable, to the provisions of Article SIXTH of the Certificate of Incorporation), present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the Certificate of Incorporation or of these Bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and shall state the number of shares voted. SECTION 10. New Business. At an annual meeting of stockholders, only such new business shall be conducted, and only such proposals shall be acted upon as shall have been brought before the annual meeting (a) by, or at the direction of, the majority of the Board of Directors, including a majority of the Continuing Directors, or (b) by any stockholder of the Corporation 3 4 who complies with the notice procedures set forth in this Section 10. For a proposal to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than seventy (70) days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the stockholder, to be timely, must be so delivered or received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. A stockholder's notice to the Secretary 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 Corporation's books, of the stockholder proposing such business and any other stockholder who is the record or Beneficial Owner of any equity security of the Corporation known by such stockholder to be supporting such proposal, (c) the class and number of shares of the Corporation's equity securities which are Beneficially Owned and owned of record by the stockholder giving the notice on the date of such stockholder notice and by any other record or Beneficial Owners of the Corporation's equity securities known by such stockholder to be supporting such proposal on the date of such stockholder notice, and (d) any financial or other interest of the stockholder in such proposal. A majority of the Continuing Directors may reject any stockholder proposal not timely made in accordance with the terms of this Section 10. If a majority of the Continuing Directors determines that the information provided in a stockholder's notice does not satisfy the informational requirements of this Section 10 in any material respect, the Secretary of the Corporation 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 majority of the Continuing Directors shall reasonably determine. If the deficiency is not cured within such period, or if the majority of the Continuing Directors determines that the additional information provided by the stockholder, together with information previously provided, does not satisfy the requirements of this Section 10 in any material respect, then a majority of the Continuing Directors may reject such stockholder's proposal. The Secretary of the Corporation shall notify a stockholder in writing whether his proposal has been made in accordance with the time and information requirements of this Section 10. Notwithstanding the procedures set forth in this paragraph, if the majority of the Continuing 4 5 Directors does not make 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 Section 10. If the presiding officer determines that a stockholder proposal was not made in accordance with the terms of this Section 10, he shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting. This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports 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. SECTION 11. Inspectors. The Board of Directors may, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the chairman of the meeting shall, or if inspectors shall not have been appointed, the chairman of the meeting may, appoint one or more inspectors. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the authenticity, validity and effect of proxies, and shall receive votes or ballots, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes or ballots, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all stockholders. If more than one inspector has been appointed, the decision, act or certificate of a majority of the inspectors is effective in all respects as the decision, act or certificate of all of the inspectors. On request of the chairman of the meeting, the inspectors shall make a report in writing of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be stockholders. SECTION 12. Action by Consent. As provided in the Certificate of Incorporation, the stockholders of the Corporation shall not be entitled to take action by written consent in lieu of taking such action at an annual or special meeting of stockholders. 5 6 ARTICLE III BOARD OF DIRECTORS SECTION 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as provided in the Certificate of Incorporation and these Bylaws. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the Continuing Directors or the stockholders. SECTION 2. Number, Qualifications, Election and Term of Office. The number of directors constituting the initial Board of Directors shall be sixteen. Thereafter, the number of directors may be fixed, from time to time, pursuant to a resolution adopted by the affirmative vote of a majority of the Continuing Directors, as that term is defined in Article FIFTH of the Certificate of Incorporation. The election of directors, the division of directors into separate classes and the terms of directors, shall be provided in Article SEVENTH of the Certificate of Incorporation. SECTION 3. Nominations of Directors. Nominations of candidates for election as directors at any annual meeting of stockholder may be made (i) by, or at the direction of, a majority of the Board of Directors, including a majority of the Continuing Directors or (ii) by any stockholder of record entitled to vote at such annual meeting. Only persons nominated in accordance with procedures set forth in this Section 3 shall be eligible for election as directors at an annual meeting. Nominations, other than those made by, or at the direction of, a majority of the Board of Directors, including a majority of the Continuing Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation as set forth in this Section 3. To be timely, a stockholder's notice shall be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the date of the date of the scheduled annual meeting, regardless of postponements, deferrals, or adjournments of that meeting to a later date; provided, however, that if less than seventy (70) days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the stockholder to be timely must be so delivered or received not later than the close of business on the tenth (10th) day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. Such stockholder's notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election as a director (a) the name, age, business address and residence address of such person, (b) the principal occupation or employment of such person, (c) the class and number of shares of the Corporation's equity securities which are Beneficially Owned by such person on the date of such stockholder notice and (d) any 6 7 other information relating to such person that would be required to be disclosed pursuant to Regulation 13D under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection with the acquisition of shares, and pursuant to Regulation 14A under the Exchange Act, in connection with the solicitation of proxies with respect to nominees for election as directors, regardless of whether such person is subject to the provisions of such regulations, including, but not limited to, information required to be disclosed by Items 4(b) and 6 of Schedule A of Regulation 14A and information which would be required to be filed on Schedule B of Regulation 14A with the Securities and Exchange Commission (as such Items and Schedules are in effect on the date hereof and such additional information required by those provisions or successor provisions adopted after the date hereof); and (ii) as to the stockholder giving the notice (a) the name and address, as they appear on the Corporation's books, of such stockholder and any other stockholder who is a record or Beneficial Owner of any equity securities of the Corporation and who is known by such stockholder to be supporting such nominee(s) and (b) the class and number of shares of the Corporation's equity securities which are Beneficially Owned and owned of record by such stockholder on the date of such stockholder notice and the number of shares of the Corporation's equity securities Beneficially Owned and owned of record by any Person known by such stockholder to be supporting such nominee(s) on the date of such stockholder notice. At the request of a majority of the Board of Directors, including a majority of the Continuing 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 Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. 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 Section 3 shall be provided for use at the annual meeting. A majority of the Continuing Directors may reject any nomination by a stockholder not timely made in accordance with the requirements of this Section 3. If a majority of the Continuing Directors determines that the information provided in a stockholder's notice does not satisfy the informational requirements of this Section 3 in any material respect, the Secretary of the Corporation 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 (5) days, from the date such deficiency notice is given to the stockholder, as a majority of the Continuing Directors shall reasonably determine. If the deficiency is not cured within such period, or if a majority of the Continuing Directors reasonably determines that the additional information provided by the stockholder, together with the information previously provided, does not satisfy the requirements of this Section 3 in any material respect, then a majority of the Continuing Directors may reject such stockholder's nomination. The Secretary of the Corporation 7 8 shall notify a stockholder in writing whether his nomination has been made in accordance with the time and informational requirements of this Section 3. Notwithstanding the procedure set forth in this Section 3, if the majority of the Continuing Directors does not make 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 a nomination was not made in accordance with the terms of this Section 3. If the presiding officer determines that a nomination was not made in accordance with the terms of this Section 3, he shall so declare at the annual meeting and the defective nomination shall be disregarded. SECTION 4. Place of Meetings. Meetings of the Board of Directors shall be held at such place or places, within or without the State of Delaware, as the Board of Directors may from time to time determine or as shall be specified in the notice of any such meeting. SECTION 5. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of the other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such other time or place, within or without the State of Delaware, as shall be specified in a notice thereof given as hereinafter provided in Section 8 of this ARTICLE III. SECTION 6. Regular Meetings. Regular meetings of the Board of Directors shall be held at such time and place as the Board of Directors may fix. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day. Notice of regular meetings of the Board of Directors need not be given except as otherwise required by statute or these Bylaws. SECTION 7. Special Meetings. Special meetings of the Board of Directors may be called by (i) the Chairman of the Board, (ii) the President or (iii) by the Secretary on the written request of a majority of the members of the Board of Directors, including a majority of the Continuing Directors. SECTION 8. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each regular meeting for which notice shall be required) shall be given by the Secretary as hereinafter provided in this Section 8, in which notice shall be stated the time and place of the meeting. Except as otherwise required by these Bylaws, such notice need not sate the purpose or purposes of such meeting. Notice of each such meeting shall be mailed, postage prepaid, to each director, addressed to him at his residence or usual place of business, by first class mail, at least four (4) days before the time of the meeting, or shall be sent 8 9 addressed to him at such place by telegraph, cable, telex, telecopier or other similar means, or be delivered to him personally or be given to him by telephone or other similar means, at least twelve (12) hours before the time of the meeting. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting, except when he shall attend for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. SECTION 9. Quorum and Manner of Acting. At all meetings of the Board of Directors, one-third (1/3) of the total number of directors, including at least a majority of the Continuing Directors then in office shall be necessary and sufficient to constitute a quorum for the transaction of business, and, except as otherwise expressly required by statute or the Certificate of Incorporation or these Bylaws, the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any meeting of the Board of Directors, a majority of the directors present thereat may adjourn such meeting to another time and place. Notice of the time and place of any such adjourned meeting shall be given to all of the directors unless such time and place were announced at the meeting at which the adjournment was taken, in which case such notice shall only be given to the directors who were not present thereat. At any adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. The directors shall act only as a Board and the individual directors shall have no power as such. SECTION 10. Resignations. Any director of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its tender. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 11. Newly Created Directorships and Vacancies. Any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office, an increase in the number of authorized directors, or other cause shall be filled as provided in Article SEVENTH of the Certificate of Incorporation. SECTION 12. Removal of Directors. A director may be removed only as provided in Article SEVENTH of the Certificate of Incorporation. SECTION 13. Compensation. Each director shall receive such fees and other compensation, along with reimbursement of expenses incurred on behalf of the Corporation or in connection with attendance at meetings, as the Board of Directors may from time to 9 10 time determine. No such payment of fees or other compensation shall preclude any director from serving the Corporation in any other capacity and receiving fees and compensation for such services. SECTION 14. Committees. Unless restricted by the Certificate of Incorporation, the Board of Directors may, by resolution passed by a majority of the entire Board of Directors, including a majority of the Continuing Directors, designate one or more committees, including an executive committee, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Except to the extent restricted by statute or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Director and may authorize the seal of the Corporation to be affixed to all papers which require it. Each such committee shall serve at the pleasure of the Board of Directors and have such name as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors. Members of either standing or special committees shall receive such fees and other compensation, along with reimbursement of expenses incurred on behalf of the Corporation or in connection with attendance of meetings, as the Board of Directors may from time to time determine. No such payment of fees or compensation shall preclude any member of a committee from serving the corporation in any other capacity and receiving fees and compensation for such services. SECTION 15. Action by Consent. Any action required or permitted to be taken by the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or such committee, as the case may be. SECTION 16. Telephonic Meeting. Any one or more members of the Board of Directors or any committee of the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting. SECTION 17. Presumption of Assent. A director of the Corporation who is present at a meeting of the Board of Directors at which action is taken shall be presumed to have assented to the action taken unless his dissent or abstention shall be entered in the minutes of the meeting or unless he shall file a written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such 10 11 dissent by registered mail to the Secretary of the Corporation within five days after the date a copy of the minutes of the meeting is received. Such right to dissent shall not apply to a director who voted in favor of such action. SECTION 18. Directors, Executive Officers and Committees. In accordance with Section 6.4 of the Agreement and Plan of Merger by and between the Corporation and FirstFed Michigan Corporation, dated May 30, 1995 (the "Agreement"), the following provisions shall govern directors, executive officers and committees to the exclusion of any provision in these bylaws to the contrary. Terms capitalized but not otherwise defined in this Section shall have the meaning given to them in the Agreement. (a) At the Company Merger Effective Time, the Board of Directors of Charter as the Surviving Corporation shall be fixed at either 16 directors, if the shareholders of Charter at the Charter Stockholders Meeting approve the amendment to Article Seventh of Charter's Restated Certificate of Incorporation increasing the maximum number of directors to 16 persons by the requisite vote, or 14 directors, if such amendment is not approved by the requisite vote, (the "Initial Directors"), one-half of whom in either case shall be selected by the Board of Directors of Charter and one-half of whom shall be selected by the Board of Directors of FirstFed, in each case prior to the Company Merger Effective Time. As soon as practicable, the Boards of Directors of Charter and FirstFed shall each select those persons it is to select who are to serve on the Board of Directors of Charter as the Surviving Corporation. Thereafter, Charter and FirstFed shall agree as to the class and term for each of the persons so selected as a director (it being the intention that to the greatest extent practicable, the Charter and FirstFed directors shall serve in equal number in each of the Surviving Corporation's three classes of directors). Charter and its Board of Directors shall take all necessary corporate action prior to the Company Merger Effective Time to effectuate this agreement of the parties including the election of the designated persons as directors of Charter as the Surviving Corporation, effective at the Company Merger Effective Time, for the agreed upon classes and terms. For a period of four years following the Company Merger Effective Time, Charles J. Koch and Jerome L. Schostak shall serve as the Chairman and Vice Chairman, respectively, of the Board of Directors of Charter as the Surviving Corporation. (b) It is the intention of Charter and FirstFed, and their respective Boards of Directors, that until at least the fourth anniversary of the Company Merger Effective Time, the Board of Directors of Charter as the Surviving Corporation (and each of the committees thereof other than the Executive Committee) shall consist of an equal number of persons serving on or representing the Boards of Directors of Charter and FirstFed, respectively, prior to the Company Merger Effective Time. In this regard, if any Initial Director (or successor thereto) does not continue to serve as a director of the Surviving Corporation for any reason whatsoever during such four year period (a "Departing Director"), 11 12 his/her successor will be the person recommended (i) in the case of a Departing Director who either was a director of Charter prior to the Company Merger Effective Time or was a successor to such a director, by the remaining directors of Charter as the Surviving Corporation who prior to the Company Merger Effective Time served as directors of Charter and, if applicable, any successors to those Charter directors or (ii) in the case of a Departing Director who either was a director of FirstFed prior to the Company Merger Effective Time or was a successor to such a director, by the remaining directors of Charter as the Surviving Corporation who prior to the Company Merger Effective Time served as directors of FirstFed and, if applicable, any successors to those FirstFed directors. Charter and the Surviving Corporation shall take all necessary corporate action, whether prior or subsequent to the Company Merger Effective Time, to effectuate this agreement of the parties and, after the Company Merger Effective Time, Charter's Board of Directors (or committee thereof) will nominate, support the solicitation of proxies in favor of, and otherwise actively use its best efforts to secure the election of directors on a basis consistent with the foregoing. (c) For a period of four years following the Company Merger Effective Time, a vote of two-thirds of the entire Board of Directors of the Surviving Corporation shall be necessary to approve (i) any amendment to the Restated Certificate of Incorporation or Bylaws of the Surviving Corporation, (ii) any merger, acquisition, sale of substantially all of its assets or other extraordinary corporate transaction involving the Surviving Corporation, Charter Bank or any other significant financial institution subsidiary of Charter as the Surviving Corporation or (iii) the dismissal or replacement of any of the executive officers of Charter as the Surviving Corporation or Charter Bank or other significant financial institution subsidiary. Charter and the Surviving Corporation shall take all necessary corporate action, whether prior or subsequent to the Company Merger Effective Time, to effectuate this agreement of the parties. Notwithstanding anything to the contrary herein, amendment to the Restated Certificate of Incorporation or Bylaws of Charter or the Surviving Corporation specifically provided for or contemplated in this Agreement shall require the vote of directors as set forth in Charter's Restated Certificate of Incorporation or Bylaws. (d) After the Company Merger Effective Time, those persons who served as directors of either Charter or FirstFed prior to the Company Merger Effective Time and who do not become the Initial Directors shall serve (unless such person determines not to serve) as directors emeriti of Charter as the Surviving Corporation with benefits at least as favorable as those currently provided to directors emeriti of Charter. (e) For a period of four years following the Company Merger Effective Time, regularly scheduled meetings of the Board of Directors of Charter as the Surviving Corporation shall be held such that there shall be equal numbers of meetings during any such year at sites as selected by the Initial Directors who were 12 13 previously directors of Charter (including their successors) and at sites as selected by the Initial Directors who were previously directors of FirstFed (including their successors). Charter and the Surviving Corporation shall take all necessary corporate action, whether prior or subsequent to the Company Merger Effective Time, to effectuate this agreement of the parties. (f) The fees and benefits to be received by the directors of Charter as the Surviving Corporation shall be no less favorable than those currently provided for directors of either Charter or FirstFed, whichever is greater. In addition, the Initial Vice Chairman of the Board of Charter as the Surviving Corporation shall receive compensation in an amount equal to one hundred fifteen percent (115%) of the compensation he is currently receiving as Chairman of FirstFed's executive committees. (g) The Executive Officers of the Surviving Corporation following the Company Merger Effective Time shall be: Charles J. Koch - Chairman of the Board, President and Chief Executive Officer; Richard W. Neu - Senior Vice President and Treasurer; John D. Koch - Senior Vice President; Mark D. Grossi - Senior Vice President; and Robert J. Vana - Chief Corporate Counsel and Secretary. (h) For a period of at least four years following the Company Merger Effective Time, the Board of Directors of Charter as the Surviving Corporation shall have a five person Executive Committee and such other committees as the Board shall establish in accordance with Section 141 of the DGCL, Charter's Certificate of Incorporation and the Bylaws. The five members of the Executive Committee effective at the Company Merger Effective Time shall be Messrs. Charles J. Koch (who shall be the Chairman of the Executive Committee), Jerome L. Schostak, John D. Koch, Mark D. Grossi and Richard W. Neu and they shall each serve for a period of four years from the Company Merger Effective Time. The Executive Committee shall not have such power or authority as is specifically excluded to it pursuant to Section 141 of the DGCL. The Executive Committee shall act by majority vote to carry out the policies, plans, practices and directions previously approved by the Board of Directors (or those approved by eighty percent (80%) of the members of the Executive Committee) and to otherwise enable Charter, as the Surviving Corporation, to conduct its business in the normal and regular course consistent with Charter's then current policies, plans, practices and directions. All other determinations by the Executive Committee shall require the affirmative vote of eighty percent (80%) of its members. Prior to the Company Merger Effective Time, Charter and FirstFed shall reasonably agree as to the initial members of each other committee of the Board of Directors of Charter as the Surviving Corporation. Each of such committees (other than the Executive Committee) shall have an even number of members, and at the Company Merger Effective Time and for four years thereafter, one-half of the members of each such other committee shall consist of directors who served as directors of Charter prior to the Company Merger Effective Time (or their successors) and the other half shall consist of directors who 13 14 served as directors of FirstFed prior to the Company Merger Effective Time (or their successors). (i) Notwithstanding anything to the contrary, none of the persons who serve as directors of FirstFed shall be subject to an age restriction relating to service as a director of the Corporation. (j) This section shall expire on the fourth anniversary of the Company Merger Effective Time. ARTICLE IV OFFICERS SECTION 1. Number and Qualifications. The officers of the Corporation shall be elected annually by the Board of Directors at the first meeting of the Board held after each annual meeting of stockholders, or as soon thereafter as possible, and shall include the President, one or more Vice Presidents, the Secretary and the Treasurer. If the Board of Directors wishes, it may also elect as an officer of the Corporation a Chairman of the Board and may elect other officers (including one or more Assistant Treasurers and one or more Assistant Secretaries) as may be necessary or desirable for the business of the Corporation. Any two or more offices may be held by the same person, and no officer except the Chairman of the Board and the President need be a director. Each officer shall hold office until his successor shall have been duly elected and qualified, or until his death, resignation or removal, as hereinafter provided in these Bylaws. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, shall be filled only by a majority vote of the Board of Directors for the unexpired portion of the term. SECTION 2. Resignations. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon receipt. Unless otherwise specified therein, the acceptance of any such resignation shall not be necessary to make it effective. SECTION 3. Removal. Any officer of the Corporation may be removed, either with or without cause, at any time, by the Board of Directors at any meeting thereof, but such removal, other than for cause (as defined in any contract between the officer and the Corporation), shall be without prejudice to the contract rights, if any, of the person so removed. SECTION 4. Chairman of the Board. The Chairman of the Board, if one shall have been elected, shall be a member of the Board, may be the chief executive officer of the Corporation and, if present, shall preside at each meeting of the Board of Directors or the stockholders. He shall advise and counsel with the President, and in his absence with other executives of the Corporation, and shall 14 15 perform such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 5. The President. The President may be the chief executive officer of the Corporation. He shall, in the absence of the Chairman of the Board or if a Chairman of the Board shall not have been elected, preside at each meeting of the Board of Directors or the stockholders. He shall perform all duties incident to the office of President and chief executive officer and such other duties as may from time to time be assigned to him by the Board of Directors. SECTION 6. Vice President. Each Vice President shall perform all such duties as from time to time may be assigned to him by the Board of Directors or the President. At the request of the President or in his absence or in the event of his inability or refusal to act, the Vice President, or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors (or if there be no such determination, then the Vice Presidents in the order of their election), shall perform the duties of the President, and, when so acting, shall have the powers of and be subject to the restrictions placed upon the President in respect of the performance of such duties. SECTION 7. Treasurer. The Treasurer shall (a) have charge and custody of, and be responsible for, all the funds and securities of the Corporation; (b) keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation; (c) deposit all moneys and other valuables to the credit of the Corporation in such depositaries as may be designated by the Board of Directors or pursuant to its direction; (d) receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever; (e) disburse the funds of the Corporation and supervise the investments of its funds, taking proper vouchers therefor; (f) render to the Board of Directors, whenever the Board of Directors may require, an account of the financial condition of the Corporation; and (g) in general, perform all duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 8. Secretary. The Secretary shall (a) keep or cause to be kept in one or more books provided for the purpose, the minutes of all meetings of the 15 16 Board of Directors, the committees of the Board of Directors and the stockholders; (b) see that all notices are duly given in accordance with the provisions of these Bylaws and as required by law; (c) be custodian of the records and the seal of the Corporation and affix and attest the seal to all certificates for shares of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; (d) see that the books, reports, statements, certificates and other documents and records required by law to be kept and filed are properly kept and filed; and (e) in general, perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Board of Directors. SECTION 9. The Assistant Treasurer. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as from time to time may be assigned by the Board of Directors. SECTION 10. The Assistant Secretary. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties as from time to time may be assigned by the Board of Directors. SECTION 11. Officers' Bonds or Other Security. If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require. SECTION 12. Compensation. The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the Corporation. 16 17 ARTICLE V STOCK CERTIFICATES AND THEIR TRANSFER SECTION 1. Stock Certificates. Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by, the Chairman of the Board or the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restriction of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of the State of Delaware, in lieu of the foregoing requirements, there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. SECTION 2. Facsimile Signatures. Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. SECTION 3. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct sufficient to indemnify it against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. SECTION 4. Transfers of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it 17 18 shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its records; provided, however, that the Corporation shall be entitled to recognize and enforce any lawful restriction on transfer, including, without limitation, the restrictions on transfer set forth in Article FIFTH of the Certificate of Incorporation. Whenever any transfer of stock shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of transfer if, when the certificates are presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. SECTION 5. Transfer Agents and Registrars. The Board of Directors may appoint, or authorize any officer or officers to appoint, one or more transfer agents and one or more registrars. SECTION 6. Regulations. The Board of Directors may make such additional rules and regulations, not inconsistent with these Bylaws, as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation. SECTION 7. Fixing the Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, a majority of the Board of Directors, including a majority of the Continuing Directors, may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. SECTION 8. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments a person registered on its records as the owner of shares of stock, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares of stock on the party of any other person, whether or not its shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. 18 19 ARTICLE VI GENERAL PROVISIONS SECTION 1. Dividends. Subject to the provisions of statute and the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, in property or in shares of stock of the Corporation, unless otherwise provided by statute or the Certificate of Incorporation. SECTION 2. Seal. The seal of the Corporation shall be in such form as shall be approved by the Board of Directors. SECTION 3. Fiscal Year. The fiscal year of the Corporation shall be fixed, and once fixed, may thereafter be changed, by resolution of the Board of Directors. The Corporation shall be subject to an annual audit as of the end of its fiscal year by independent public accountants appointed by and responsible to the Board of Directors. The appointment of such accountants shall be subject to annual ratification by the stockholders. SECTION 4. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other orders for the payment of money of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such officer, officers, person or persons as from time to time may be designated by the Board of Directors or by an officer or officers authorized by the Board of Directors to make such designation. SECTION 5. Execution of Contracts, Deeds, Etc. The Board of Directors may authorize any officer or officers, agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances. SECTION 6. Voting of Stock in Other Corporations. Unless otherwise provided by resolution of the Board of Directors, the Chairman of the Board or the President, from time to time, may (or may appoint one or more attorneys or agents to) cast the votes which the Corporation may be entitled to cast as a stockholder or otherwise in any other corporation, any of whose shares or securities may be held by the Corporation, at meetings of the holders of the shares or other securities of such other corporation. In the event one or more attorneys or agents are appointed, the Chairman of the Board or the President may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent. The Chairman of the Board or the President may, or may instruct the attorneys or agents appointed to, execute or cause to be executed in the name and on behalf of the Corporation and under its seal or otherwise, such written proxies, consents, waivers or other instruments as may be necessary or proper in the circumstances. 19 20 ARTICLE VII DEFINITIONS Capitalized terms in these Bylaws, not otherwise defined in these Bylaws, have the meanings assigned to them in the Certificate of Incorporation. ARTICLE VIII AMENDMENTS These Bylaws may be amended or repealed or new bylaws adopted as provided in Article FIFTEENTH of the Certificate of Incorporation. 20 EX-99 4 PRESS RELEASE OF CHARTER ONE, DATED 10/31/95. 1 Exhibit 99 [CHARTER ONE FINANCIAL, INC. LOGO] 1215 Superior Avenue NEWS RELEASE Cleveland, Ohio 44114 (216) 566-5300 For Immediate Release Contact: William Dupuy Ellen L. Batkie (216) 566-5311 (313) 965-5909 Charter One & FirstFed Michigan Corporation Complete Merger CLEVELAND, Ohio, October 31, 1995 - Charter One Financial, Inc. (Nasdaq-NNM:COFI) and FirstFed Michigan Corporation (Nasdaq-NNM:FFOM) announced today that the merger of the two thrift holding companies has been completed. At the close of trading today, each share of FirstFed Michigan Corporation common stock will be exchanged for 1.2 shares of Charter One common stock, traded under the symbol COFI. Headquartered in Cleveland, the combined company, which continues under the name Charter One Financial, Inc., has total assets of approximately $13 billion and operates 157 offices in Ohio and Michigan. The 94 offices in Ohio operate under the name Charter One Bank, F.S.B. while the 63 offices in Michigan are under the First Federal of Michigan name. -----END PRIVACY-ENHANCED MESSAGE-----