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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
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FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
AF BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
UNITED STATE OF AMERICA PENDING
(State of incorporation or organization) (I.R.S. Employer Identification No.)
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206 SOUTH JEFFERSON AVENUE
WEST JEFFERSON, NORTH CAROLINA 28694
(336) 246-4344
(Address of principal executive offices, including zip code)
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If this Form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective pursuant to
General Instruction A.(c), check the following box. [ ]
If this Form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [X]
Securities Act registration statement file number to which this form
relates: N.A. (if applicable)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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NONE NOT APPLICABLE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Registrant is authorized to issue 5,000,000 shares of Common Stock
having a par value of $.01 per share (the "Common Stock") and 1,000,000 shares
of preferred stock, no par value per share ("Preferred Stock"). Each share of
the Common Stock will have the same relative rights as, and will be identical in
all respects with, each other share of Common Stock. The Common Stock of the
Registrant will represent nonwithdrawable capital, will not be an account of an
insurable type, and will not be insured by the FDIC or any government agency.
Dividends. The payment of dividends by the Registrant is subject to
limitations which are imposed by law and applicable regulation. The holders of
Common Stock of the Registrant will be entitled to receive and share equally in
such dividends as may be declared by the Board of Directors of the Registrant
out of funds legally available therefor. If the Registrant issues Preferred
Stock, the holders thereof may have a priority over the holders of the Common
Stock with respect to dividends.
Voting Rights. Tho holders of Common Stock will possess exclusive
voting rights in the Registrant. They will elect the Registrant's Board of
Directors and act on such other matters as are required to be presented to them
under Office of Thrift Supervision Rules and Regulations or as are otherwise
presented to them by the Board of Directors. If the Registrant issues Preferred
Stock, holders of the Preferred Stock may also possess voting rights.
Liquidation. In the event of any liquidation, dissolution or winding up
of the AF Bank (the "Bank"), the wholly-owned subsidiary of the Registrant, as
holder of the Bank's capital stock, would be entitled to receive, after payment
or provision for payment of all debts and liabilities of the Bank (including all
deposit accounts and accrued interest thereon) and after distribution of the
balance in the special liquidation account established in connection with the
Bank's Mutual Holding Company Reorganization, all assets of the Bank available
for distribution. In the event of liquidation, dissolution or winding up of the
Registrant, the holders of its Common Stock would be entitled to receive, after
payment or provision for payment of all its debts and liabilities, all of the
assets of the Registrant available for distribution. If Preferred Stock is
issued, the holders thereof may have a priority over the holders of the Common
Stock in the event of liquidation or dissolution.
Preemptive Rights. Holders of the Common Stock will not be entitled to
preemptive rights with respect to any shares which may be issued. The Common
Stock is not subject to redemption.
Preferred Stock. None of the shares of the Registrant's authorized
Preferred Stock will be issued in connection with the Plan of Reorganization.
Such stock may be issued with such preferences and designations as the Board of
Directors may from time to time determine. The Board of Directors can, without
shareholder approval, issue Preferred Stock with voting, dividend, liquidation
and conversion rights which could dilute the voting strength of the holders of
the Common Stock and may assist management in impeding an unfriendly takeover or
attempted change in control.
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Restrictions in the Registrant's Charter and Bylaws. A number of
provisions of the Registrant's Charter and Bylaws deal with matters of corporate
governance and certain rights of stockholders, which might be deemed to have
potential anti-takeover effects. These provisions may have the effect of
discouraging a future takeover attempt or change of control which is not
approved by the Board of Directors but which a majority of individual Registrant
stockholders may deem to be in their best interests or in which stockholders may
receive a substantial premium for their shares over then current market prices.
As a result, stockholders who desire to participate in such a transaction may
not have an opportunity to do so. Such provisions will also render the removal
of the current Board of Directors or management of the Registrant more
difficult.
Mutual Holding Company Ownership. So long as the AsheCo., M.H.C. (the
"MHC") is in existence, the MHC must own at least a majority of the outstanding
voting stock of the Registrant. The MHC currently is able to elect the
Registrant's and the Bank's directors and direct the affairs and business
operations of the Bank and the Registrant.
Limitation on Voting Rights. The Charter of Registrant provides that,
for a period of five years from the effective date of the Bank's mutual holding
company reorganization, no person (other than the MHC) may directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of any class of equity security of the Registrant. Each share beneficially owned
in violation of the foregoing percentage limitation will not be counted as
shares entitled to vote, will not be voted by any person or counted as voting
shares in connection with any matter submitted to stockholders for a vote. The
limitation does not apply to: a transaction in which either the Bank or the
Registrant forms a holding company without change in the respective beneficial
ownership interest of each of its stockholders, respectively; the purchase of
shares by underwriters in connection with a public offering; or the purchase of
shares by a tax-qualified employee stock benefit plan.
Cumulative Voting. Cumulative voting entitles each stockholder to cast
a number of votes in the election of directors equal to the number of such
stockholder's shares of common stock multiplied by the number of directors to be
elected, and to distribute such votes among one or more of the nominees to be
elected. The Charter of the Registrant states that cumulative voting for the
election of directors is not permitted. The absence of cumulative voting rights
means that the holders of a majority of the shares voted at a meeting of
stockholders may elect all directors of the Registrant thereby precluding
minority stockholder representation on the Registrant's Board of Directors.
Because the MHC owns a majority of the Common Stock, the MHC is able to elect
all of the members of Registrant's Board of Directors.
ITEM 2. EXHIBITS.
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2.1 Agreement and Plan of Reorganization.
3.1 Federal Stock Charter of AF Bankshares, Inc.
3.2 By-Laws of AF Bankshares, Inc.
4.3 Form of Specimen Stock Certificate of AF Bankshares, Inc.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
AF BANKSHARES, INC.
By: /s/ James A. Todd
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James A. Todd
President and Chief Executive Officer
Dated: June 12, 1998
ASHE FEDERAL BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated September 15, 1997, is
by and among ASHE FEDERAL BANK, a federal stock savings bank (the "Bank"); AF
BANKSHARES, INC., a federally-chartered corporation (the "Stock Holding
Company"), and ASHE INTERIM SAVINGS BANK, a to-be-formed interim federal stock
savings bank ("Interim").
The parties hereto desire to enter into an Agreement and Plan of
Reorganization whereby the corporate structure of the Bank will be reorganized
into the stock holding company form of ownership. The result of such
reorganization will be that immediately after the Effective Date (as defined in
Article V below), all of the issued and outstanding shares of common stock, par
value $0.01 per share, of the Bank will be held by the Stock Holding Company,
and the holders of the issued and outstanding shares of common stock of the Bank
will become the holders of the issued and outstanding shares of common stock of
the Stock Holding Company.
The reorganization of the Bank will be accomplished by the following
steps: (1) the formation by the Bank of the Stock Holding Company as a wholly
owned subsidiary; (2) the formation of Ashe Interim Savings Bank ("Interim"), an
interim federal stock savings bank which will be wholly owned by the Stock
Holding Company; and (3) the merger of Interim into the Bank, with the Bank as
the surviving corporation. Pursuant to such merger: (i) each of the issued and
outstanding shares of common stock of the Bank will be converted by operation of
law into an equal number of issued and outstanding shares of common stock of the
Stock Holding Company; and (ii) each of the issued and outstanding shares of
common stock of Interim will automatically be converted by operation of law into
an equal number of issued and outstanding shares of common stock of the Bank.
Notwithstanding any other provision herein, at any time prior to the Effective
Date, the Bank shall be entitled to revise the structure of the merger or other
transactions contemplated hereby or the manner of effecting such transactions;
provided, that each of the transactions comprising such revised structure or
manner shall not, as a result of such revision, subject any of the stockholders
of the Bank to adverse tax consequences. This agreement and any related
documents shall be appropriately amended in order to reflect any such revised
structure.
NOW, THEREFORE, in order to consummate this Agreement and Plan of
Reorganization, and in consideration of the mutual covenants herein set forth.
the parties agree as follows:
ARTICLE I
MERGER OF INTERIM INTO
THE BANK AND RELATED MATTERS
1.1 On the Effective Date, Interim will be merged with and into the
Bank (the "Merger") and the separate existence of Interim shall cease, and all
assets and property (real, personal and mixed, tangible and intangible, choses
in action, rights and credits) then owned by Interim, or which would inure to
it, shall immediately and automatically, by operation of law and without any
conveyance, transfer, or further action,
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become the property of the Bank. The Bank shall be deemed to be a continuation
of Interim, and the Bank shall succeed to the rights and obligations of Interim.
1.2 Following the Merger, the existence of the Bank shall continue
unaffected and unimpaired by the Merger, with all the rights, privileges,
immunities and powers, and subject to all the duties and liabilities, of a
corporation organized under federal law. The Charter and Bylaws of the Bank, as
presently in effect, shall continue in full force and effect and shall not be
changed in any manner whatsoever by the Merger.
1.3 From and after the Effective Date, and subject to the actions of
the Board of Directors of the Bank, the business presently conducted by the Bank
(whether directly or through its subsidiaries) will continue to be conducted by
it, as a wholly owned subsidiary of Stock Holding Company, and the present
directors and officers of the Bank will continue in their present positions. The
home office and branch offices of the Bank in existence immediately prior to the
Effective Date shall continue to be the home office and branch offices,
respectively, of the Bank from and after the Effective Date.
ARTICLE II
CONVERSION OF STOCK
2.1 The terms and conditions of the Merger, the mode of carrying the
same into effect, and the manner and basis of converting the common stock of the
Bank into common stock of the Stock Holding Company pursuant to this Agreement
shall be as follows:
A. On the Effective Date, each share of common stock, par
value $0.01 per share, of the Bank issued and outstanding immediately prior to
the Effective Date shall automatically by operation of law be converted into and
shall become one share of common stock, par value $0.01 per share, of the Stock
Holding Company (the "Stock Holding Company Common Stock"). Each share of common
stock of Interim issued and outstanding immediately prior to the Effective Date
shall, on the Effective Date, automatically by operation of law be converted
into and become one share of common stock, $0.01 par value per share, of the
Bank and shall not be further converted into shares of the Stock Holding
Company, so that from and after the Effective Date, all of the issued and
outstanding shares of common stock of the Bank shall be held by the Stock
Holding Company.
B. On the Effective Date, the current stock option plans and
recognition plans of the Bank (collectively, the "Benefit Plans") shall
automatically, by operation of law, be continued as Benefit Plans of the Bank
and/or the Stock Holding Company. Each option to purchase shares of the Bank
common stock under the Bank's stock option plan outstanding at that time will be
automatically converted into an identical option, with identical price, terms
and conditions, to purchase an identical number of shares of Stock Holding
Company Common Stock in lieu of shares of the Bank common stock. The Stock
Holding Company and the Bank may make appropriate amendments to the Benefit
Plans to reflect the adoption of the Benefit Plans as the plans of the Stock
Holding Company, without adverse effect on the Benefit Plans and their
participants.
C. From and after the Effective Date, each holder of an
outstanding certificate or certificates that, prior thereto, represented shares
of the Bank common stock, shall, upon surrender of the same to the designated
agent of the Bank, be entitled to receive in exchange therefor a certificate or
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certificates representing the number of whole shares of Stock Holding Company
Common Stock into which the shares theretofore represented by the certificate or
certificates so surrendered shall have been converted, as provided in the
foregoing provisions of this Section 2.1. Until so surrendered, each such
outstanding certificate which, prior to the Effective Date, represented shares
of Bank common stock shall be automatically deemed for all purposes to evidence
the ownership of the equal number of whole shares of Stock Holding Company
Common Stock. Former holders of shares of Bank common stock will not be required
to exchange their Bank common stock certificates for new certificates evidencing
the same number of shares of Stock Holding Company Common Stock. If in the
future the Stock Holding Company determines to effect an exchange of stock
certificates, instructions will be sent to all holders of record of Stock
Holding Company Common Stock.
D. All shares of Stock Holding Company Common Stock into which
shares of the Bank common stock shall have been converted pursuant to this
Article II shall be deemed to have been issued in full satisfaction of all
rights pertaining to such converted shares.
E. On the Effective Date, the holders of certificates formerly
representing the Bank common stock outstanding on the Effective Date shall cease
to have any rights with respect to the stock of the Bank common stock, and their
sole rights shall be with respect to the Stock, Holding Company Common Stock
into which their shares of the Bank common stock shall have been converted by
the Merger.
ARTICLE III
CONDITIONS
3.1 The obligations of the Bank, Stock Holding Company and Interim to
effect the Merger and otherwise consummate the transactions which are the
subject matter hereof shall be subject to satisfaction of the following
conditions:
A. To the extent required by applicable law, rules and
regulations, the holders of the outstanding shares of the Bank common stock
shall, at a meeting of the stockholders of the Bank duly called, have approved
this Agreement by the affirmative vote of a majority of the shares of the Bank
common stock.
B. Any and all approvals from the OTS, the Securities and
Exchange Commission and any other federal governmental agency having
jurisdiction necessary for the lawful consummation of the Merger and the
issuance and delivery of Stock Holding Company Common Stock as contemplated by
this Agreement shall have been obtained.
C. The Bank shall have received either (i) a ruling from the
Internal Revenue Service or (ii) an opinion from its legal counsel, to the
effect that the Merger will be treated as a non-taxable transaction under
applicable provisions of the Internal Revenue Code of 1986, as amended, and that
no gain or loss will be recognized by the stockholders of the Bank upon the
exchange of the Bank common stock held by them solely for Stock Holding Company
Common Stock.
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ARTICLE IV
TERMINATION
4.1 This Agreement may be terminated at the election of any of the
parties hereto if any one or more of the conditions to the obligations of any of
them hereunder shall not have been satisfied and shall have become incapable of
fulfillment and shall not be waived. This Agreement may also be terminated at
any time prior to the Effective Date by the mutual consent of the respective
Boards of Directors of the parties.
4.2 In the event of the termination of this Agreement pursuant to any
of the foregoing provisions, no party shall have any further liability or
obligation of any nature to any other party under this Agreement.
ARTICLE V
EFFECTIVE DATE OF MERGER
5.1 Upon satisfaction or waiver (in accordance with the provisions of
this Agreement) of each of the conditions set forth in Article III, the parties
hereto shall cause to be filed with the OTS Articles of Combination and such
certificates or further documents as shall be required by the OTS, and with such
other federal regulatory agencies as may be required. Upon approval by the OTS
and endorsement of such Articles of Combination by the OTS, the Merger and other
transactions contemplated by this Agreement shall become effective. The
Effective Date for all purposes hereunder shall be the date of such endorsement
by the OTS.
ARTICLE VI
MISCELLANEOUS
6.1 Any of the terms or conditions of this Agreement, which may legally
be waived, may be waived at any time by any party hereto that is entitled to the
benefit thereof, or any of such terms or conditions may be amended or modified
in whole or in part at any time, to the extent authorized by applicable law, by
an agreement in writing, executed in the same manner as this Agreement.
6.2 Any of the terms or conditions of this Agreement may be amended or
modified in whole or in part at any time, to the extent permitted by applicable
law, rules, and regulations, by an amendment in writing, provided that any such
amendment or modification is not materially adverse to the Bank, the Stock
Holding Company or their stockholders. In the event that any governmental agency
requests or requires that the transactions contemplated herein be modified in
any respect as a condition of providing a necessary regulatory approval or
favorable ruling, or that in the opinion of counsel such modification is
necessary to obtain such approval or ruling, this Agreement may be modified, at
any time before or after adoption thereof by the stockholders of the Bank, by an
instrument in writing, provided that the effect of such amendment would not be
materially adverse to the Bank, Stock Holding Company or their stockholders.
6.3 This Agreement shall be governed by and construed under the laws of
the United States.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement and Plan of Reorganization as of the date first above written.
ASHE FEDERAL BANK
By: /s/ James A. Todd
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James A. Todd
President and Chief Executive Officer
AF BANKSHARES, INC.
(IN FORMATION)
By: /s/ James A. Todd
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James A. Todd
President and Chief Executive Officer
ASHE INTERIM SAVINGS BANK
(IN FORMATION)
By: /s/ James A. Todd
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James A. Todd
President and Chief Executive Officer
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FEDERAL STOCK CHARTER
AF BANKSHARES, INC.
SECTION 1. CORPORATE TITLE. The full corporate title of the Mutual
Holding Company subsidiary holding company is AF Bankshares, Inc. (the "Stock
Holding Company").
SECTION 2. OFFICE. The domicile of the Stock Holding Company shall be
in West Jefferson, in the county of Ashe, State of North Carolina.
SECTION 3. DURATION. The duration of the Stock Holding Company is
perpetual.
SECTION 4. PURPOSE AND POWERS. The purpose of the Stock Holding Company
is to pursue any or all of the lawful objectives of a federal mutual holding
company chartered under Section 10(o) of the Home Owners' Loan Act, 12 USC
1467a(o), and to exercise all of the express, implied, and incidental powers
conferred thereby and by all acts amendatory thereof and supplemental thereto,
subject to the Constitution and laws of the United States as they are now in
effect, or as they may hereafter be amended, and subject to all lawful and
applicable rules, regulations, and orders of the Office of Thrift Supervision
(the "Office").
SECTION 5. CAPITAL STOCK. The total number of shares of all classes of
the capital stock that the Stock Holding Company has the authority to issue is
6,000,000, of which 5,000,000 shares shall be common stock, par value $.01 per
share, and of which 1,000,000 shares shall be serial preferred stock, no par
value per share. The shares may be issued from time to time as authorized by the
Board of Directors without the approval of the stockholders, except as otherwise
provided in this Section 5 or to the extent that such approval is required by
governing law, rule, or regulation. The consideration for the issuance of the
shares shall be paid in full before their issuance and shall not be less than
the par or stated value. Neither promissory notes nor future services shall
constitute payment or part payment for the issuance of shares of the Stock
Holding Company. The consideration for the shares shall be cash, tangible or
intangible property (to the extent direct investment in such property would be
permitted to the Stock Holding Company), labor or services actually performed
for the Stock Holding Company, or any combination of the foregoing. In the
absence of actual fraud in the transaction, the value of such property, labor,
or services, as determined by the Board of Directors of the Stock Holding
Company, shall be conclusive. Upon payment of such consideration, such shares
shall be deemed to be fully paid and nonassessable. In the case of a stock
dividend, that part of the retained earnings of the Stock Holding Company which
is transferred to common stock or paid-in capital accounts upon the issuance of
shares as a stock dividend shall be deemed to be the consideration for their
issuance.
Except for the initial offering of shares of the Stock Holding Company,
no shares of capital stock (including shares issuable upon conversion, exchange
or exercise of other securities) shall be issued, directly or indirectly, to
officers, directors, or controlling persons (except for shares issued to AsheCo,
M.H.C., the parent mutual holding company (the "Mutual Holding Company")) of the
Stock Holding Company other than as part of a general public offering or as
qualifying shares to a director, unless their issuance or the plan under which
they would be issued has been approved by a majority of the total votes eligible
to be cast at a legal meeting.
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Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share except as
to the cumulation of votes for the election of directors unless the Charter
provides that there shall be no such cumulative voting; provided, that this
restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of preferred
stock, voting as a class or series, to elect some members of the Board of
Directors, less than a majority thereof, in the event of default in the payment
of dividends on any class or series of preferred stock;
(ii) To any provision which would require the holders of preferred
stock, voting as a class or series, to approve the merger or consolidation of
the Stock Holding Company with another corporation or the sale, lease or
conveyance (other than by mortgage or pledge) of properties or business in
exchange for securities of a corporation other than the Stock Holding Company if
the preferred stock is exchanged for securities of such other corporation;
provided, that no provision may require such approval for transactions
undertaken with the assistance or pursuant to the direction of the Office, the
Federal Deposit Insurance Corporation, or the Resolution Trust Corporation;
(iii) To any amendment which would adversely change the specific terms
of any class or series of capital stock as set forth in this Section 5 (or in
any supplementary sections hereto), including any amendment which would create
or enlarge any class or series ranking prior thereto in rights and preferences.
An amendment which increases the number of authorized shares of any class or
series of capital stock, or substitutes the surviving savings bank in a merger
or consolidation for the Stock Holding Company, shall not be considered to be
such an adverse change.
A description of the different classes and series (if any) of the Stock
Holding Company's capital stock and a statement of the designations, and the
relative rights, preferences and limitations of the shares of each class of and
series (if any) of capital stock are as follows:
A. COMMON STOCK. Except as provided in this Section 5 (or in any
supplementary sections hereto) the holders of the common stock shall exclusively
possess all voting power. Each holder of shares of common stock shall be
entitled to one vote for each share held by such holder.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to payment of dividends, the full amount of
dividends and of sinking fund, retirement fund or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock and on any class or series
of stock entitled to participate therewith as to dividends out of any assets
legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the
Stock Holding Company, the holders of the common stock (and the holders of any
class or series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the Stock Holding Company available for distribution remaining after:
(i) payment or provision for payment of the Stock Holding Company's debts and
liabilities; (ii) distributions or provisions for distributions in settlement of
any liquidation account; and (iii) distributions or provisions for distributions
to holders of any class or series of stock having preference over the common
stock in the liquidation, dissolution, or winding
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up of the Stock Holding Company. Each share of common stock shall have the same
relative rights as and be identical in all respects with all the other shares of
common stock.
B. PREFERRED STOCK. The Stock Holding Company may provide in
supplementary sections to its charter for one or more classes of preferred
stock, which shall be separately identified. The shares of any class may be
divided into and issued in series, with each series separately designated so as
to distinguish the shares thereof from the shares of all other series and
classes. The terms of each series shall be set forth in a supplementary section
to the charter. All shares of the same class shall be identical except as to the
following relative rights and preferences, as to which there may be variations
between different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rate or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative and, if so, from
which date(s), the payment date(s) for dividends, and the participating or other
special rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such
series;
(d) Whether the shares of such series shall be redeemable and, if so,
the price(s) at which, and the terms and conditions on which, such shares may be
redeemed;
(e) The amount(s) payable upon the shares of such series in the event
of voluntary or involuntary liquidation, dissolution, or winding up of the Stock
Holding Company;
(f) Whether the shares of such series shall be entitled to the benefit
of a sinking or retirement fund to be applied to the purchase or redemption of
such shares, and if so entitled, the amount of such fund and the manner of its
application, including the price(s) at which such shares may be redeemed or
purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the Stock
Holding Company and, if so, the conversion price(s) or the rate(s) of exchange,
and the adjustments thereof, if any, at which such conversion or exchange may be
made, and any other terms and conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such
series shall be issued; and
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial preferred
stock and whether such shares may be reissued as shares of the same or any other
series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The Board of Directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series and, within the limitations set forth in this
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section and the remainder of this charter, fix and determine the relative rights
and preferences of the shares of any series so established.
Prior to the issuance of any preferred shares of a series established
by a supplementary charter section adopted by the Board of Directors, the Stock
Holding Company shall file with the Secretary of the Office a dated copy of that
supplementary section of this charter establishing and designating the series
and fixing and determining the relative rights and preferences thereof.
SECTION 6. PREEMPTIVE RIGHTS. Holders of the capital stock of the Stock
Holding Company shall not be entitled to preemptive rights with respect to any
shares of the Stock Holding Company which may be issued.
SECTION 7. DIRECTORS. The Stock Holding Company shall be under the
direction of a Board of Directors. The authorized number of directors, as stated
in the Stock Holding Company's bylaws, shall not be fewer than five nor more
than fifteen, except when a greater number is approved by the Director of the
Office, or his or her delegate.
SECTION 8. BENEFICIAL OWNERSHIP LIMITATION. Notwithstanding anything
contained in the Stock Holding Company's charter or bylaws to the contrary, for
a period of five years from the date of the Bank's reorganization into a Mutual
Holding Company no person, other than the Mutual Holding Company, shall directly
or indirectly offer to acquire or acquire the beneficial ownership of more than
10 percent of any class of an equity security of the Stock Holding Company. This
limitation shall not apply to a transaction in which the Stock Holding Company
forms a holding company without change in the respective beneficial ownership
interests of its stockholders other than pursuant to the exercise of any
dissenter and appraisal rights, the purchase of shares by underwriters in
connection with a public offering, or the purchase of shares by a tax-qualified
employee stock benefit plan which is exempt from the approval requirements under
574.3(c)(l)(vii) of the Office's regulations.
In the event shares are acquired in violation of this Section 8, all
shares beneficially owned by any person in excess of 10% shall be considered
"excess shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to the stockholders for a vote.
For the purposes of this Section 8, the following definitions apply:
(1) The term "person" includes an individual, a group acting in
concert, a corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate or any
other group formed for the purpose of acquiring, holding or disposing of the
equity securities of the Stock Holding Company.
(2) The term "offer" includes every offer to buy or otherwise acquire,
solicitation of an offer to sell, tender offer for, or request or invitation for
tenders of, a security or interest in a security for value.
(3) The term "acquire" includes every type of acquisition, whether
affected by purchase, exchange, operation of law or otherwise.
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(4) The term "acting in concert" means (a) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose pursuant to
any contract, understanding, relationship, agreement or other arrangements,
whether written or otherwise.
SECTION 9. CUMULATIVE VOTING LIMITATION. Stockholders shall not be
permitted to cumulate their votes for election of directors for a period of five
years from the effective date of the Bank's reorganization into the Mutual
Holding Company.
SECTION 10. CALL FOR SPECIAL MEETING. For a period of five years from
the effective date of the Bank's reorganization into the Mutual Holding Company,
special meetings of stockholders relating to changes in control of the Stock
Holding Company or amendments to its charter shall be called only upon direction
of the Board of Directors.
SECTION 11. AMENDMENT OF CHARTER. Except as provided in Section 5
hereof, no amendment addition, alteration, change, or repeal of this charter
shall be made, unless such is first proposed by the Board of Directors of the
Mutual Holding Company subsidiary holding company, approved by the stockholders
by a majority of the total votes eligible to be cast at a legal meeting, unless
a higher vote is otherwise required, and approved or preapproved by the Office.
AF BANKSHARES, INC.
Attest: /s/ Melanie Paisley Miller By: /s/ James A. Todd
--------------------------- -----------------------------------------
Melanie Paisley Miller James A. Todd
Secretary President and Chief Executive Officer
OFFICE OF THRIFT SUPERVISION
Attest: By: /s/ Nadine Washington
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Date: June 16, 1998
--------------------
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BYLAWS
AF BANKSHARES, INC.
ARTICLE I - HOME OFFICE
The domicile of AF Bankshares, Inc. (the "Stock Holding Company") shall
be located in West Jefferson, County of Ashe, State of North Carolina.
ARTICLE II - STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All annual and special meetings of
stockholders shall be held at the domicile of the Stock Holding Company or at
such other place in the State of North Carolina as the Board of Directors may
determine.
SECTION 2. ANNUAL MEETING. A meeting of the stockholders of the Stock
Holding Company for the election of directors and for the transaction of any
other business of the Stock Holding Company shall be held annually within 150
days after the end of the Stock Holding Company's fiscal year on the third
Monday of October, if not a legal holiday, and if a legal holiday, then on the
next day following which is not a legal holiday, or at such other date and time
within the 150-day period as the Board of Directors may determine.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by the Federal Stock
Charter of the Stock Holding Company, may be called at any time by the chairman
of the board, the president, or a majority of the Board of Directors, and shall
be called by the chairman of the board, the president, or the secretary upon the
written request of the holders of not less than 10% of all of the outstanding
capital stock of the Stock Holding Company entitled to vote at the meeting. Such
written request shall state the purpose or purposes of the meeting and shall be
delivered to the home office of the Stock Holding Company addressed to the
chairman of the board, the president or the secretary.
SECTION 4. CONDUCT OF MEETINGS. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors adopts another written procedure for the conduct of meetings.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, day,
and hour of the meeting and the purpose(s) for which the meeting is called shall
be delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, directors or other persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the stockholder at the address as it appears on the stock transfer
books or records of the Stock Holding Company as of the record date prescribed
in Section 6 of this Article II with postage thereon prepaid. When any
stockholders' meeting, either annual or special, is adjourned for
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30 days or more, notice of the adjourned meeting shall be given as in the case
of an original meeting. It shall not be necessary to give any notice of the time
and place of any meeting adjourned for less than 30 days or of the business to
be transacted at the meeting, other than an announcement at the meeting at which
such adjournment is taken.
SECTION 6. FIXING OF RECORD DATE. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment, or stockholders entitled to receive payment of any dividend, or
in order to make a determination of stockholders for any other proper purpose,
the Board of Directors shall fix in advance a date as the record date for any
such determination of stockholders. Such date in any case shall be not more than
60 days and, in case of a meeting of stockholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
stockholders, is to be taken. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof.
SECTION 7. VOTING LIST. At least 20 days before each meeting of the
stockholders, the officer or agent having charge of the stock transfer books for
shares of the Stock Holding Company shall make a complete list of the
stockholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address and the number of shares held
by each. This list of stockholders shall be kept on file at the home office of
the Stock Holding Company and shall be subject to inspection by any stockholder
of record or such stockholders's agent at any time during usual business hours
for a period of 20 days prior to such meeting. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject to
inspection by any stockholder of record during the entire time of the meeting.
The original stock transfer book shall constitute prima facie evidence of the
stockholders entitled to examine such list or transfer books or to vote at any
meeting of stockholders.
In lieu of making the shareholder list available for inspection by
shareholders as provided in the preceding paragraph, the board of directors may
elect to follow the procedures prescribed in ss. 552.6(d) of the Office's
regulations as now or hereafter in effect.
SECTION 8. QUORUM. A majority of the outstanding shares of the Stock
Holding Company entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than a majority of the
outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to constitute less than a quorum. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
SECTION 9. PROXIES. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder or by his or her duly
authorized attorney in fact. Proxies solicited on behalf of the management shall
be voted as directed by the stockholder or, in the absence of such direction, as
determined by a majority of the Board of Directors. No proxy shall be valid more
than eleven months from the date of its execution except for a proxy coupled
with an interest.
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SECTION 10. VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Stock Holding Company to the contrary, at any meeting of the
stockholders of the Stock Holding Company, any one or more of such stockholders
may cast, in person or by proxy, all votes to which such ownership is entitled.
In the event an attempt is made to cast conflicting votes, in person or by
proxy, by the several persons in whose names shares of stock stand, the vote or
votes to which those persons are entitled shall be cast as directed by a
majority of those holding such stock and present in person or by proxy at such
meeting, but no votes shall be cast for such stock if a majority cannot agree.
SECTION 11. VOTING OF SHARES OF CERTAIN HOLDERS. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the Board of Directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name if authority to do so is contained in
an appropriate order of the court or other public authority by which such
receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Stock Holding
Company nor shares held by another corporation, if a majority of the shares
entitled to vote for the election of directors of such other corporation are
held by the Stock Holding Company, shall be voted at any meeting, or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.
SECTION 12. NO CUMULATIVE VOTING. Stockholders shall not be entitled to
cumulate their votes for election of directors.
SECTION 13. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment
thereof. The number of inspector shall be either one or three. Any such
appointment shall not be altered at the meeting. If inspectors of election are
not so appointed, the chairman of the board or the president may, or on the
request of not fewer than 10 percent of the votes represented at the meeting
shall, make such appointment at the meeting. If appointed at the meeting, the
majority of the votes present shall determine whether one or three inspectors
are to be appointed. In case any person appointed as inspector fails to appear
or fails or refuses to act, the vacancy may be filled by appointment by the
Board of Directors in advance of the meeting or at the meeting by the chairman
of the board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares of stock and the
voting power of each share, the shares represented at the meeting, the existence
of a quorum, and the authenticity, validity and effect of proxies; receiving
votes, ballots, or consents; hearing and determining all challenges and
questions in any way arising
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in connection with the rights to vote; counting and tabulating all votes or
consents; determining the result; and such acts as may be proper to conduct the
election or vote with fairness to all stockholders.
SECTION 14. NOMINATING COMMITTEE. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at the principal executive offices
of the Stock Holding Company at least 20 days prior to the date of the annual
meeting. Upon delivery, such nominations shall be posted in a conspicuous place
in each office of the Stock Holding Company. No nominations for director except
those made by the nominating committee shall be voted upon at the annual meeting
unless other nominations by stockholders are made in writing and delivered to
the secretary at the principal executive offices of the Stock Holding Company at
least five (5) days prior to the date of the annual meeting. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, and (iii) such person's written consent to serve as a
director, if elected; and (b) as to the stockholder giving the notice (i) the
name and address of such stockholder and (ii) the class and number of shares of
the Stock Holding Company which are owned of record by such stockholder. At the
request of the board of directors, any person nominated by the board of
directors for election as a director shall furnish to the secretary that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee together with the required written consents. Upon
delivery, such nominations shall be posted in a conspicuous place in each office
of the Stock Holding Company. Ballots bearing the names of all the persons
nominated by the nominating committee and by stockholders shall be provided for
use at the annual meeting. However, if the nominating committee shall fail or
refuse to act at least 20 days prior to the annual meeting, nominations for
directors may be made at the annual meeting by any stockholder entitled to vote
and shall be voted upon.
SECTION 15. NEW BUSINESS. At an annual meeting of stockholders, only
such business shall be conducted, and only such proposals shall be acted upon,
as shall have been properly brought before the meeting. For any business
proposed by management to be properly brought before the annual meeting, such
business shall be approved by the Board of Directors, either directly or through
its approval of proxy solicitation materials related thereto, and shall be
stated in writing and filed with the secretary at least 5 days before the date
of the annual meeting, and all business so stated, proposed and filed shall be
considered at the annual meeting. Any stockholder may make any other proposal at
the annual meeting and the same may be discussed and considered but unless
stated in writing and filed with the secretary at least five (5) days before the
meeting, such proposal shall be laid over for action at an adjourned, special or
annual meeting of the stockholders taking place 30 days or more thereafter. This
provision shall not prevent the consideration and approval or disapproval at the
annual meeting of reports of officers, directors, and committees; but in
connection with such reports, no new business shall be acted upon at such annual
meeting unless stated and filed as herein provided. 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, (b) the business, as well as the name
and address of such stockholder and the class and number of shares of the Stock
Holding Company which are owned of record by such stockholder.
SECTION 16. INFORMAL ACTION BY STOCKHOLDERS. Any action required to be
taken at a meeting of the stockholders, or any other action which may be taken
at a meeting of the stockholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
stockholders entitled to vote with respect to the subject matter thereof.
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ARTICLE III - BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the Stock
Holding Company shall be under the direction of its Board of Directors. The
Board of Directors shall annually elect a chairman of the board and a president
from among its members and shall designate, when present, either the chairman of
the board or the president to preside at its meetings.
SECTION 2. NUMBER AND TERM. The Board of Directors shall consist of
eight members and shall be divided into three classes as nearly equal in number
as possible. The members of each class shall be elected for a term of three
years and until their successors are elected and qualified. One class shall be
elected by ballot annually.
SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately after,
and at the same place as, the annual meeting of stockholders. The Board of
Directors may provide, by resolution, the time and place, within the Stock
Holding Company's normal lending territory, for the holding of additional
regular meetings without other notice than such resolution.
Members of the Board of Directors may participate in special meetings
by means of conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other. Such participation
shall constitute presence in person for all purposes, including the purpose of
compensation pursuant to Section 12 of this Article.
SECTION 4. QUALIFICATION. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Stock
Holding Company unless the Stock Holding Company is a wholly owned subsidiary of
a holding company.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board, the president,
or one-third of the directors. The persons authorized to call special meetings
of the Board of Directors may fix any place, within the Stock Holding Company's
normal lending territory, as the place for holding any special meeting of the
Board of Directors called by such persons.
Directors may participate in special meetings by means of a conference
telephone or similar communications device through which all persons
participating can hear each other. Such participation shall constitute presence
in person for all purposes, including the purpose of compensation pursuant to
Section 12 of this Article.
SECTION 6. NOTICE. Written notice of any special meeting shall be given
to each director at least twenty-four (24) hours prior thereto when delivered
personally or by telegram or at least five days prior thereto when delivered by
mail at the address at which the director is most likely to be reached. Such
notice shall be deemed to be delivered when deposited in the mail so addressed,
with postage thereon prepaid if mailed or when delivered to the telegraph
company if sent by telegram. Any director may waive notice of any meeting by a
writing filed with the secretary. The attendance of a director at a meeting
shall
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constitute a waiver of notice of such meeting, except where a director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting.
SECTION 7. QUORUM. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors; but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time. Notice of any adjourned meeting shall be
given in the same manner as prescribed by Section 6 of this Article III.
SECTION 8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the Board of Directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors.
SECTION 10. RESIGNATION. Any director may resign at any time by sending
a written notice of such resignation to the home office of the Stock Holding
Company addressed to the chairman of the board or the president. Unless
otherwise specified, such resignation shall take effect upon receipt thereof by
the chairman of the board or the president. More than three consecutive absences
from regular meetings of the Board of Directors, unless excused by resolution of
the Board of Directors, shall automatically constitute a resignation, effective
when such resignation is accepted by the Board of Directors.
SECTION 11. VACANCIES. Any vacancy occurring on the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the Board of Directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the stockholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the Board of Directors for a
term of office continuing only until the next election of directors by the
stockholders.
SECTION 12. COMPENSATION. Directors, as such, may receive a stated
salary for their services. By resolution of the Board of Directors, a reasonable
fixed sum, and reasonable expenses of attendance, if any, may be allowed for
actual attendance at each regular or special meeting of the Board of Directors.
Members of either standing or special committees may be allowed such
compensation for actual attendance at committee meetings as the Board of
Directors may determine.
SECTION 13. PRESUMPTION OF ASSENT. A director of the Stock Holding
Company who is present at a meeting of the Board of Directors at which action on
any Stock Holding Company matter is taken shall be presumed to have assented to
the action taken unless his or her dissent or abstention shall be entered in the
minutes of the meeting or unless he or she 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 dissent by registered mail to the
secretary of the Stock Holding Company 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.
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SECTION 14. REMOVAL OF DIRECTORS. At a meeting of stockholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of the shares of any class are entitled to elect
one or more directors by the provisions of the charter or supplemental sections
thereto, the provisions of this Section shall apply, in respect to the removal
of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.
ARTICLE IV - EXECUTIVE AND OTHER COMMITTEES
SECTION 1. APPOINTMENTS. The board of directors, by resolution adopted
by a majority of the full board, may designate the chief executive officer and
two or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
SECTION 2. AUTHORITY. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the Stock Holding Company, or recommending to the
shareholders a plan of merger, consolidation, or conversion; the sale, lease, or
other disposition of all or substantially all of the property and assets of the
Stock Holding Company otherwise than in the usual and regular course of its
business; a voluntary dissolution of the Stock Holding Company; a revocation of
any of the foregoing; or the approval of a transaction in which any member of
the executive committee, directly or indirectly, has any material beneficial
interest.
SECTION 3. TENURE. Subject to the provisions of section 8 of this
article IV, each member of the executive committee shall hold office until the
next regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
SECTION 4. MEETINGS. Regular meetings of the executive committee may be
held without notice at such times and places as t he executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
SECTION 5. QUORUM. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the executive committee at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the members of the executive committee.
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SECTION 7. VACANCIES. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
SECTION 8. RESIGNATIONS AND REMOVAL. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the Stock Holding Company. Unless
otherwise specified, such resignation shall take effect upon its receipt; the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 9. PROCEDURE. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
SECTION 10. OTHER COMMITTEES. The board of directors may by resolution
establish an audit, loan, or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Stock Holding Company and may prescribe the duties, constitution, and procedures
thereof.
ARTICLE V - OFFICERS
SECTION 1. POSITIONS. The officers of the Stock Holding Company shall
be a president, one or more vice presidents, a secretary, and a treasurer, each
of whom shall be elected by the Board of Directors. The Board of Directors also
may designate the chairman of the board as an officer. The president shall be
the chief executive officer, unless the Board of Directors designates the
chairman of the board as chief executive officer. The president shall be a
director of the Stock Holding Company. The offices of the secretary and
treasurer may be held by the same person and a vice president may also be either
the secretary or the treasurer. The Board of Directors may designate one or more
vice presidents as executive vice president or senior vice president. The Board
of Directors also may elect or authorize the appointment of such other officers
as the business of the Stock Holding Company may require. The officers shall
have such authority and perform such duties as the Board of Directors may from
time to time authorize or determine. In the absence of action by the Board of
Directors, the officers shall have such powers and duties as generally pertain
to their respective offices.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Stock
Holding Company shall be elected annually at the first meeting of the Board of
Directors held after each annual meeting of the stockholders. If the election of
officers is not held at such meeting, such election shall be held as soon
thereafter as possible. Each officer shall hold office until a successor has
been duly elected and qualified or until the officer's death, resignation, or
removal in the manner hereinafter provided. Election or appointment of an
officer, employee, or agent shall not of itself create contractual rights. The
Board of Directors may authorize the Stock Holding Company to enter into an
employment contract with any officer in accordance with regulations of the
Office; but no such contract shall impair the right of the Board of Directors to
remove any officer at any time in accordance with Section 3 of this Article V.
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SECTION 3. REMOVAL. Any officer may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Stock Holding
Company will be served thereby, but such removal, other than for cause, shall be
without prejudice to any contractual rights, if any, of the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
SECTION 5. REMUNERATION. The remuneration of the officers shall be
fixed from time to time by the Board of Directors.
ARTICLE VI - CONTRACTS, LOANS, CHECKS, AND DEPOSITS
Section 1. Contracts. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the Board of Directors may authorize any officer,
employee or agent of the Stock Holding Company to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the Stock
Holding Company. Such authority may be general or confined to specific
instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the Stock
Holding Company and no evidence of indebtedness shall be issued in its name
unless authorized by the Board of Directors. Such authority may be general or
confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the Stock Holding Company shall be signed by one or more officers,
employees, or agents of the Stock Holding Company in such manner as shall from
time to time be determined by the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Stock Holding Company not
otherwise employed shall be deposited from time to time to the credit of the
Stock Holding Company in any duly authorized depositories as the Board of
Directors may select.
ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
capital stock of the Stock Holding Company shall be in such form as shall be
determined by the Board of Directors and approved by the Office. Such
certificates shall be signed by the chief executive officer or by any other
officer of the Stock Holding Company authorized by the Board of Directors,
attested by the secretary or an assistant secretary, and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar, other than the Stock Holding Company itself or
one of its employees. Each certificate for shares of capital stock shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Stock Holding
Company. All certificates surrendered to the Stock Holding Company for transfer
shall be canceled and no new certificate shall be issued until the former
certificate for a like number of shares has been surrendered and canceled,
except that in the case of a lost or destroyed certificate, a new certificate
may be issued upon such terms and indemnity to the Stock Holding Company as the
Board of Directors may prescribe.
9
<PAGE>
SECTION 2. TRANSFER OF SHARES. Transfer of shares of capital stock of
the Stock Holding Company shall be made only on its stock transfer books.
Authority for such transfer shall be given only by the holder of record thereof
or by his legal representative, who shall furnish proper evidence of such
authority, or by his attorney thereunto authorized by a duly executed power of
attorney and filed with the Stock Holding Company. Such transfer shall be made
only on surrender for cancellation of the certificate for such shares. The
person in whose name the shares of capital stock stand on the books of the Stock
Holding Company shall be deemed by the Stock Holding Company to be the owner for
all purposes.
ARTICLE VIII - FISCAL YEAR; ANNUAL AUDIT
The fiscal year of the Stock Holding Company shall end on the 30th day
of June of each year. The Stock Holding Company 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.
ARTICLE IX - DIVIDENDS
Subject only to the terms of the Stock Holding Company's charter and
the regulations and orders of the Office, the Board of Directors may, from time
to time, declare, and the Stock Holding Company may pay, dividends on its
outstanding shares of capital stock.
ARTICLE X - CORPORATE SEAL
The Board of Directors shall provide a Stock Holding Company seal which
shall be two concentric circles between which shall be the name of the Stock
Holding Company. The year of incorporation or an emblem may appear in the
center.
ARTICLE XI - AMENDMENTS
These bylaws may be amended in a manner consistent with regulations of
the Office and shall be effective after: (i) approval of the amendment by a
majority vote of the authorized board of directors, or by a majority vote of the
votes cast by the shareholders of the Stock Holding Company at any legal
meeting, and (ii) receipt of any applicable regulatory approval. When the Stock
Holding Company fails to meet its quorum requirements, solely due to vacancies
on the board, then the affirmative vote of a majority of the sitting board will
be required to amend the bylaws.
ARTICLE XII - INDEMNIFICATION
The Stock Holding Company shall indemnify its directors, officers and
employees in accordance with the following requirements:
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following
definitions apply for purposes of this Article XII:
(i) Action. The term "action" means any judicial or
administrative proceeding, or
10
<PAGE>
threatened proceeding, whether civil, criminal or otherwise, including
any appeal or other proceeding for review;
(ii) Court. The term "court" includes, without limitation, any
court to which or in which any appeal or any proceeding for review is
brought.
(iii) Final judgment. The term "final judgment" means a
judgment, decree or order that is not appealable or as to which the
period for appeal has expired with no appeal taken.
(iv) Settlement. The term "settlement" includes entry of a
judgment by consent or confession or a plea of guilty or nolo
contendere.
(b) References in this Article XII to any individual or other
person, including any savings bank, shall include legal representatives,
successors and assigns thereof.
SECTION 2. INDEMNIFICATION. Subject to Sections 3 and 7 of
this Article XII, the Stock Holding Company shall indemnify any person against
whom an action is brought or threatened because that person is or was a
director, officer or employee of the Stock Holding Company for:
(a) Any amount for which that person becomes liable under a
judgment in such action; and
(b) Reasonable costs and expenses, including reasonable
attorneys' fees, actually paid or incurred by that person in defending
or settling such action, or in enforcing his or her rights under this
Article XII if he or she attains a favorable judgment in such
enforcement action.
SECTION 3. REQUIREMENTS FOR INDEMNIFICATION. Indemnification shall be
made to such person under Section 2 of this Article XII only if:
(a) Final judgment on the merits is in his or her favor; or
(b) In case of:
(i) settlement;
(ii) final judgment against him or her; or
(iii) final judgment in his or her favor, other than on
the merits,
if a majority of the disinterested directors of the Stock
Holding Company determines that he or she was acting in good
faith within the scope of his or her employment or authority
as he or she could have reasonably perceived it under the
circumstances and for a purpose he or she could reasonably
have believed under the circumstances was in the best
interests of the Stock Holding Company or its shareholders.
However, no indemnification shall be made unless the Stock Holding Company gives
the Office at least 60 days notice of its intention to make such
indemnification. Such notice shall state the facts on which the
11
<PAGE>
action arose, the terms of any settlement and any disposition of the matter by a
court. Such notice, a copy thereof and a certified copy of the resolution
containing the required determination by the Board shall be sent to the Regional
Director of the Office, who shall promptly acknowledge receipt thereof. The
notice period shall run from the date of such receipt. No such indemnification
shall be made if the Office advises the Stock Holding Company in writing, within
such notice period, of his or her objection thereto.
SECTION 4. INSURANCE. The Stock Holding Company may obtain insurance to
protect it and its directors, officers and employees from potential losses
arising from claims against any of them for alleged wrongful acts, or wrongful
acts committed in their capacity as directors, officers or employees. However,
the Stock Holding Company may not obtain insurance that provides for payment of
losses of any person incurred as a consequence of his or her willful or criminal
misconduct.
SECTION 5. PAYMENT OF EXPENSES. If a majority of the directors of the
Stock Holding Company concludes that, in connection with an action, any person
ultimately may become entitled to indemnification under this Article XII, the
directors may authorize payment of reasonable costs and expenses, including
reasonable attorneys' fees, arising from the defense or settlement of such
action. Nothing in this Section 5 shall prevent the directors of the Stock
Holding Company from imposing such conditions on a payment of expenses as they
deem warranted and in the interests of the Stock Holding Company. Before making
advance payment of expenses under this Section 5, the Stock Holding Company
shall obtain an agreement that the Stock Holding Company will be repaid if the
person on whose behalf payment is made is later determined not to be entitled to
such indemnification.
SECTION 6. EXCLUSIVENESS OF PROVISIONS. The Stock Holding Company shall
not indemnify any person referred to in Section 2 of this Article XII or obtain
insurance referred to in Section 4 of this Article XII other than in accordance
with this Article XII.
SECTION 7. STATUTORY LIMITATIONS. The indemnification provided for in
Section 2 of this Article XII is subject to and qualified by 12 U.S.C. section
1821(k).
SECTION 8. SUBSEQUENT LEGISLATION OR REGULATION. If law and regulations
thereunder applicable to federal stock savings banks are amended to expand the
indemnifications permitted to directors and officers of the Stock Holding
Company, then the Stock Holding Company shall indemnify such persons to the
extent permitted by such applicable law and regulations, as so amended.
AF BANKSHARES, INC.
Attest: /s/ Melanie Paisley Miller By: /s/ James A. Todd
--------------------------- -----------------------------------------
Melanie Paisley Miller James A. Todd
Secretary President and Chief Executive Officer
OFFICE OF THRIFT SUPERVISION
Attest: By: /s/ Nadine Washington
--------------------- -----------------------------------------
Date: June 16, 1998
--------------------
12
[FORM OF STOCK CERTIFICATE - FRONT SIDE]
NUMBER SHARES
AF BANKSHARES, INC.
WEST JEFFERSON, NORTH CAROLINA
COMMON STOCK CUSIP 001046101
--------------
See reverse for certain definitions
This certifies that_______________________ is the record holder of ___________
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK,
$0.01 PAR VALUE PER SHARE, OF AF BANKSHARES, INC.,
a corporation incorporated under the laws of the United States (the
"Corporation") . The shares evidenced by this Certificate are transferable only
on the stock-transfer books of the Corporation by the holder of record hereof,
in person or by attorney or legal representative, upon surrender of this
Certificate properly endorsed. THE STOCK EVIDENCED HEREBY IS NOT AN ACCOUNT OF
AN INSURABLE TYPE AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.
IN WITNESS HEREOF, the Corporation has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused its facsimile seal to be affixed hereto.
Dated:
/s/ Melanie Paisley Miller /s/ James A. Todd
- --------------------------- --------------------------------------
Secretary President and Chief Executive Officer
(SEAL)
Countersigned and Registered:
CHASE MELLON SHAREHOLDER SERVICES, L.L.C.
By: Transfer Agent
and Registrar
<PAGE>
(FORM OF STOCK CERTIFICATE - BACK SIDE)
The shares represented by this certificate are issued subject to all
the provisions of the Charter and Bylaws of AF BANKSHARES, INC. (the
"Corporation"), as from time to time amended (copies of which are on file at the
principal office of the Corporation), to all of which the holder by acceptance
hereof assents. The following description constitutes a summary of certain
provisions of, and is qualified in its entirety by reference to, the Charter.
The Charter of the Corporation contains certain provisions, applicable
for a period of five years from the date of the AF Bank's reorganization into a
Mutual Holding Company, that restrict persons, other than the Mutual Holding
Company, from directly or indirectly acquiring or holding, or attempting to
acquire or hold, the beneficial ownership of in excess of 10% of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors ("Voting Stock"). The Charter contains a provision
pursuant to which the shares beneficially held in excess of 10% the Voting Stock
of the Corporation are considered "excess shares" and shall not be counted as
shares entitled to vote and shall not be voted by any person or counted as
voting shares in connection with any matters submitted to the stockholders for a
vote. These restrictions are not applicable to underwriters in connection with a
public offering of the common stock, certain reorganization transactions
described in the Charter or to acquisitions of Voting Stock by the Corporation,
any majority-owned subsidiary of the Corporation, or any tax-qualified employee
stock benefit plan which is exempt from the approval requirements under
574.3(c)(1)(vi) of the Office's regulations. AsheCo, M.H.C., the federally
chartered mutual holding company of the Corporation ("Mutual Holding Company")
will own in excess of 50% of the Common Stock of the Corporation so long as the
Mutual Holding Company remains in mutual form.
The Corporation is authorized to issue more than one class of stock,
including a class of Preferred Stock which may be issued in one or more series.
The Corporation will furnish to any stockholder, upon written request and
without charge, within five days after receipt of such request, a full statement
of the designations, preferences, limitations or relative rights of the shares
of each class authorized to be issued and, as to shares of Preferred Stock, the
variations in the relative rights and preferences between the shares of each
series so far as the same have been fixed and determined and the authority of
the Board of Directors to fix and determine the relative rights and preferences
of subsequent series.
The following abbreviations when used in the inscription on the face of
this certificate shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ...................Custodian................
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of survivorship and under Uniform Gifts to Minors
not as tenants in common Act.....................................
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list
For value received, _________________________________ hereby sell,
assign and transfer unto ______________ shares of Common Stock evidenced by this
Certificate, and do hereby irrevocably constitute and appoint
_______________________ as Attorney, to transfer the said shares on the books of
the herein named Corporation, with full power of substitution.
Date: ________________ ____________________________________________
Signature
____________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the Certificate, in every
particular, without alteration or
enlargement, or any change whatsoever.
