<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K12G3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 1999
Cornerstone Bancorp, Inc.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Connecticut Requested Upon Filing 06-1524044
- --------------- --------------------- -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
550 Summer Street, Stamford, CT 06901
- ------------------------------------------ -------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 356-0111
--------------
Not Applicable
- -------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets
- ----------------------------------------------
On March 1, 1999, Cornerstone Bancorp, Inc. (the "Bancorp") completed the
acquisition of Cornerstone Bank (the "Bank") under an Agreement and Plan of
Reorganization (the "Plan"), dated August 19, 1998, pursuant to which the Bank
became a wholly owned subsidiary of the Bancorp, a newly formed holding company
incorporated by the Bank for that purpose (the "Reorganization"). Under the
terms of the Plan, each outstanding share of the common stock of the Bank, par
value $.01 per share (the "Bank Common Stock"), was exchanged on a one-for-one
basis for the common stock of the Bancorp, par value $.01 per share (the
"Bancorp Common Stock"), and the former holders of the Bank Common Stock became
the holders of all the outstanding Bancorp Common Stock. As a result of the
Reorganization, pursuant to Rule 12g-3(a) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Bancorp Common Stock is deemed to be
registered pursuant to Section 12(g) of the Exchange Act.
DESCRIPTION OF BANCORP CAPITAL STOCK
Common Stock
The authorized capital stock of the Bancorp consists of 2,000,000 shares of
Bancorp Common Stock, par value $.01 per share. Bancorp Common Stock has no
preemptive or conversion rights or other subscription rights. Effective upon
the consummation of the Reorganization, there were 1,122,837 shares of Bancorp
Common Stock outstanding. Each share of the Bancorp Common Stock has the same
relative rights and is identical in all respects with every other share of
Bancorp Common Stock. There are no redemption or sinking fund provisions
applicable to Bancorp Common Stock, and the outstanding shares of Bancorp Common
Stock issued in the Reorganization are fully paid and nonassessable.
Voting Rights
Shareholders of the Bancorp are entitled to one vote for each share of
Bancorp Common Stock held of record on matters submitted to a vote of
shareholders. The Bancorp Common Stock does not have cumulative voting rights.
As a result, the holders of more than 50% of the shares of Bancorp Common Stock
voting for the election of directors can elect all of the directors standing for
election if they chose to do so, and, in such event, the holders of the
remaining shares of Bancorp Common Stock will not be able to elect any person or
persons to the Board of Directors of the Bancorp.
Amendments
Provisions of the Bancorp's Certificate of Incorporation may be amended by
a majority of the voting stock of the Bancorp, except with respect to the
provisions governing annual and special shareholders meetings and shareholder
nominations of directors, the amendment of each of which requires a vote of 80%
of the outstanding shares of the Bancorp's capital stock entitled to vote
thereon. Such supermajority vote provisions of the Bancorp's Certificate of
Incorporation could make it more difficult for a third party to acquire, or
could discourage a third party from attempting to acquire, control of the
Bancorp and, therefore, may limit the price that certain investors might be
willing to pay in the future for shares of Bancorp Common Stock. The Bancorp's
bylaws may be amended, altered or repealed, at any regular meeting of the board
of directors, by a vote of a majority of the total number of the directors.
Limitations on Actions by Shareholders
Any one or more shareholders owning, in the aggregate, not less than 10% of
the voting stock of the Bancorp, may call a special meeting of shareholders at
any time.
Nominations of persons for election to the Board of Directors may be made
at an annual meeting of shareholders or a special meeting of shareholders at
which directors are to be elected pursuant to the Bancorp's notice of meeting
(a) if specified in the Bancorp's notice of meeting, (b) by or at the direction
of the Board of
-2-
<PAGE>
Directors or (c) by any shareholder of the Bancorp who was a shareholder of
record at the time of giving of notice as described below, who is entitled to
vote at the meeting and who complies with such notice procedures. For
nominations to be properly brought before a meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Bancorp. To be timely, a shareholder's notice shall be delivered to the
Secretary at the principal executive offices of the Bancorp not later than the
close of business on the 60th day nor earlier than the close of business on the
90th day prior to the first anniversary of the preceding year's annual meeting
(or not earlier than the 90th day prior to a special meeting nor later than the
60th day prior to such special meeting); provided, however, that in the event
that the date of an annual meeting is more than 30 days before or more than 60
days after such an anniversary date, notice by the shareholder to be timely must
be so delivered not earlier than the close of business on the 90th day prior to
such annual meeting and not later than the close of business on the later of the
60th day prior to such annual meeting or the close of business on the 10th day
following the day on which public announcement of the date of such meeting is
first made by the Bancorp. Such shareholder's notice shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case, pursuant to Regulation 14A under the Exchange Act
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (b) as to the
shareholder giving notice and the beneficial owner, if any, on whose behalf the
nomination is made (i) the name and address of such shareholder, as it appears
on the Bancorp's books, and of such beneficial owner and (ii) the class and
number of shares of the Bancorp that are owned beneficially and held of record
by such shareholder and such beneficial owner. Although the Bancorp's Bylaws do
not give the Bancorp's Board of Directors any power to approve or disapprove
shareholder nominations for the election of directors, the Bancorp's Bylaws (i)
may have the effect of precluding a nomination for the election of directors at
a particular annual meeting if the proper procedures are not followed or (ii)
may discourage or deter a third party from conducting a solicitation of proxies
to elect its own slate of directors or otherwise attempting to obtain control of
the Bancorp, even if the conduct of such solicitation or such attempt might be
beneficial to the Bancorp and its shareholders.
Classified Board of Directors
The Bancorp's Certificate of Incorporation provides that the Board of
Directors of the Bancorp is to be divided into three classes: Class I, Class II
and Class III, as nearly equal in number as is reasonably possible. Other than
the initial directors in Class I and Class II who will serve for one-year terms
and two-year terms, respectively, each director is elected for a three-year
term, with one class of directors being elected at each annual meeting of
shareholders. In the event of any increase or decrease in the authorized number
of directors, directorships will be apportioned among the classes by the
Bancorp's Board of Directors to ensure that no one class has more than one
director more than any other class, to the extent possible. Since only one
third of the directors of the classified Board of Directors are subject to
election each year, it is more difficult for the shareholders of the Bancorp to
change the management of the Bancorp than if the Board of Directors of the
Bancorp were not classified. In addition, the presence of a classified Board of
Directors could make it more difficult for a third party to acquire, or could
discourage a third party from attempting to acquire, control of the Bancorp and,
therefore, may limit the price that certain investors might be willing to pay in
the future for shares of Bancorp Common Stock.
Changes in Board of Directors
The Bancorp's Certificate of Incorporation provides that the number of
positions on the Board of Directors will be fixed by a vote of 80% of the Board
of Directors. The Board of Directors may increase or decrease the number of
directors by no more than two in each fiscal year. The Bancorp's Certificate of
Incorporation and Bylaws also provide that vacancies created by an increase in
the number of directorships or occurring for any other reason, such as death or
resignation, will be filled by a vote of 80% of the remaining directors.
Finally, the Bancorp's Certificate of Incorporation and Bylaws provide that a
director may be removed only for cause by affirmative vote of the holders of at
least 80% of the outstanding shares of the Bancorp's capital stock entitled to
vote thereon, unless the Board of Directors, by the affirmative vote of 80% of
the full Board recommends removal, in which case such removal will require the
affirmative vote of a majority of the Bancorp's capital stock entitled to vote
thereon. The foregoing provisions of the Bancorp's Certificate of Incorporation
and Bylaws could make it
-3-
<PAGE>
more difficult for a third party to acquire, or could discourage a third party
from attempting to acquire, control of the Bancorp and, therefore, may limit the
price that certain investors might be willing to pay in the future for shares of
Bancorp Common Stock.
Dividends
The holders of Bancorp Common Stock will be entitled to receive dividends
when and if declared by the Board of Directors of the Bancorp. Dividends may be
declared and paid by the Bancorp only out of funds legally available therefor.
Under Connecticut law, dividends may generally be declared by the board of
directors of a corporation and paid in cash, property or in shares of such
corporation, to the extent of its unreserved and unrestricted earned surplus and
capital surplus.
Preemptive Rights
No holder of shares of the capital stock of any class of the Bancorp shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Bancorp, whether now or hereafter authorized, or to any
obligations convertible into stock of the Bancorp, issued or sold, nor any right
of subscription to any thereof other than such, if any, as the Board of
Directors, in its discretion may from time to time determine and at such price
as the Board of Directors may from time to time fix.
Liquidation
In the event of liquidation of the Bancorp, holders of Bancorp Common Stock
are entitled to share pro rata in the net assets of the Bancorp remaining after
payment of all amounts due creditors.
Transfer Agent and Registrar
American Stock Transfer & Trust Company, 40 Wall Street, New York, New
York, is the transfer agent and registrar for Bancorp Common Stock.
-4-
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- ---------------------------------------------------------------------------
(a) Financial Statements of Business Acquired.
(1) Financial Statements of Cornerstone Bank
(A) Audited financial statements for the years ended December 31,
1997, 1996 and 1995 (incorporated by reference herein from the
Cornerstone Bank Annual Report on Form 10-KSB for the year ended
December 31, 1997 as filed with the Federal Deposit Insurance
Corporation)(which includes basic and diluted earnings per share
amounts that have not been adjusted for the 10% stock dividend
distributed in 1998).
(B) Unaudited financial statements for the nine months ended
September 30, 1998 and 1997 (incorporated by reference herein
from the Cornerstone Bank Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998 as filed with Federal Deposit
Insurance Corporation).
(b) Pro Forma Financial Information.
Prior to the consummation of the Reorganization, the Bancorp did not have
any significant assets or liabilities. Accordingly, the pro forma consolidated
financial statements of the Bancorp would reflect no material differences from
the consolidated financial statements of the Bank for the years ended December
31, 1997, 1996 and 1995, and the nine months ended September 30, 1998 and 1997
except that basic and diluted earnings per share amounts for the years prior to
1998 have not been restated to reflect the 10% stock dividend distributed in
1998.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization
4.1 Certificate of Incorporation of Cornerstone Bancorp, Inc.
4.2 Bylaws of Cornerstone Bancorp, Inc.
4.3 Form of Specimen Common Stock Certificate of Cornerstone Bancorp,
Inc.
-5-
<PAGE>
SIGNATURES
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 hereunto duly authorized.
CORNERSTONE BANCORP, INC.
By /s/ James P. Jakubek
-----------------------------
Name: James P. Jakubek
Title: Executive Vice President
Date: March 1, 1999
-6-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description
- --- -----------
2.1 Agreement and Plan of Reorganization
4.1 Certificate of Incorporation of Cornerstone Bancorp, Inc.
4.2 Bylaws of Cornerstone Bancorp, Inc.
4.3 Form of Specimen Common Stock Certificate of Cornerstone Bancorp, Inc.
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") dated as of August 19,
1998, between CORNERSTONE BANK, a Connecticut stock bank (the "Bank"), and
CORNERSTONE BANCORP, INC., a Connecticut corporation ("Bancorp") organized at
the direction of the Bank pursuant to Section 36a-181 of the Connecticut General
Statutes.
RECITALS
WHEREAS, the Bank has an authorized capitalization consisting of (a)
2,000,000 shares of common stock, par value $.01 per share (the "Bank Common
Stock"), of which 1,015,994 shares are issued and outstanding and (b) 35,000
shares of preferred stock, $100 par value per share, none of which are issued
and outstanding (the "Bank Preferred Stock" and, collectively with the Bank
Common Stock, the "Bank Stock"); and
WHEREAS, Bancorp has an authorized capitalization consisting of 2,000,000
shares of Common Stock, par value $.01 per share (the "Bancorp Common Stock");
and
WHEREAS, the respective Boards of Directors of the Bank and Bancorp deem it
advisable to effect a reorganization pursuant to the Connecticut Bank Holding
Company and Bank Acquisition Act (the "Connecticut BHC Act"), Conn. Gen. Stat.
(S)36a-181 et seq. and the share exchange provisions of the Connecticut Business
-- ----
Corporation Act, Conn. Gen. Stat. (S)33-816, et seq. (together with the
-- ----
Connecticut BHC Act, the "Applicable Laws") whereby at the Effective Time (as
hereinafter defined), Bancorp will acquire all the issued and outstanding shares
of Bank Common Stock (other than shares held by the Dissenting Shareholders, as
defined in Section 1.05) and the holders of shares of Bank Common Stock (other
than the Dissenting Shareholders) will receive one share of Bancorp Common Stock
in exchange for each share of Bank Common Stock held as of the Effective Time
(the "Reorganization"); and
WHEREAS, the Board of Directors of the Bank has determined that the
Reorganization is desirable and in the best interests of its Shareholders and
directed that the Plan be submitted to the vote of the shareholders of the Bank;
WHEREAS, this Plan has been approved by the Boards of Directors of the Bank
and Bancorp, each of which has duly authorized the officers whose respective
signatures appear below to execute and deliver the Plan;
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto hereby agree that
the terms and conditions of the Reorganization, the mode of carrying it into
effect, and the manner of exchanging shares shall be as follows:
ARTICLE I
THE REORGANIZATION
1.01. The time at which the Reorganization shall become effective (the
"Effective Time") shall be the later of (a) the close of business on the date on
which this Plan, having been approved by the Banking Commissioner of the State
of Connecticut (the "Commissioner"), shall be filed in the office of the
Secretary of the State of the State of Connecticut or (b) the close of business
on the date on which the last of the conditions specified in Article IV hereof
shall have been satisfied or otherwise fulfilled or compliance therewith shall
have been waived.
<PAGE>
1.02. Except as otherwise provided in Section 1.05, at the Effective Time
each share of the issued and outstanding Bank Common Stock or fraction thereof
will be acquired automatically by Bancorp, and each share of Bank Common Stock
shall, automatically and without further action on the part of the holders
thereof, be exchanged for one share of Bancorp Common Stock, which shall
thereupon be issued, fully paid and non-assessable, and each holder of Bank
Common Stock (other than the Dissenting Shareholders (as defined in Section
1.05)) shall become a shareholder of Bancorp, all in a single transaction in
accordance with the Applicable Laws and the terms and conditions of this Plan.
Except as aforesaid, each share of Bank Common Stock outstanding at the
Effective Time shall continue to be issued and outstanding, and the ownership
thereof shall automatically and without further action be transferred to and
vested in Bancorp and Bancorp shall be entitled to receive a new certificate or
certificates evidencing the ownership thereof.
1.03. Except as otherwise provided in Section 1.05, each certificate
theretofore representing shares of Bank Common Stock shall, at the Effective
Time, become and be deemed for all purposes to evidence ownership of the same
number of shares of Bancorp Common Stock, without any physical exchange thereof.
Former shareholders of the Bank may, but shall not be required to, surrender
their certificates formerly evidencing shares of Bank Common Stock to American
Stock Transfer & Trust Company, the transfer agent for Bancorp Common Stock (the
"Transfer Agent"), and upon such surrender, or upon surrender for any other
transfer or exchange, such shareholder or the transferee, as the case may be,
shall be entitled to receive a certificate or certificates evidencing the same
number of shares of Bancorp Common Stock. The stock transfer books for Bank
Common Stock shall be closed at the Effective Time and no transfer of
outstanding shares of Bank Common Stock shall thereafter be made on such books.
1.04. If any certificate for shares of Bancorp Common Stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of the issuance thereof
that the certificate so surrendered shall be properly endorsed and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
person requesting such transfer pay to the Transfer Agent any transfer or other
taxes payable by reason of the issuance of such new certificate in any name
other than the registered holder of the certificate surrendered, or establish to
the satisfaction of the Transfer Agent that such tax has been paid or is not
payable.
1.05. Shareholders of the Bank whose shares of Bank Common Stock would
otherwise be automatically exchanged for shares of Bancorp Common Stock by
operation of the Applicable Laws and this Plan and who validly comply with all
the requirements of Section 36a-181(c) of the Connecticut BHC Act (the
"Dissenting Shareholders") may demand in writing from the Bank payment for their
Bank Common Stock and shall receive payment therefor from the Bank in accordance
with the provisions of Section 36a-181(c) of the Connecticut BHC Act.
1.06. At the Effective Time, the shares of Bancorp Common Stock that are
outstanding immediately prior to the Effective Time shall be cancelled.
ARTICLE II
COVENANTS
2.01. The Board of Directors of each of the Bank and Bancorp have duly
approved and adopted this Plan. Subject to the provisions of Section 6.02, the
Bank shall, at a Special Meeting of Shareholders (the "Special Meeting"), cause
its shareholders to vote on this Plan and the transactions contemplated thereby
and shall use all reasonable efforts to obtain the approval by its shareholders
of this Plan and the transactions contemplated thereby.
-2-
<PAGE>
2.02. Subject to the provisions of Section 6.02, prior to and after the
Effective Time, the Bank and Bancorp, respectively, shall take all such action
as may be necessary or appropriate in order to effectuate the Reorganization.
2.03. Bancorp shall, with the cooperation of the Bank, take all action
necessary to (a) qualify for an exemption from the filing requirements of the
Securities and Exchange Commission (the "SEC") pursuant to Section 3(a)(12) of
the Securities Act of 1933, as amended, (the "Securities Act") or, in the
absence of such exemption, to file, or cause to be filed, a registration
statement under such Act on such form as it shall deem appropriate with respect
to the offer and sale of the Bancorp Common Stock to be issued in connection
with the Reorganization, (b) register the shares of Bancorp Common Stock
issuable in connection with the Reorganization under the Securities Exchange Act
of 1934, as amended, (c) comply with the securities and blue sky laws of all
jurisdictions which are applicable in connection with the Reorganization, (d)
obtain approval for listing on the American Stock Exchange, upon official notice
of issuance, of the shares of Bancorp Common Stock issuable in connection with
the Reorganization, (e) file an application to the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") with respect to the
approval of the Reorganization pursuant to the Bank Holding Company Act of 1956,
as amended (the "BHC Act"), and obtain such approval, and (f) file such
application as may be necessary with the Banking Commissioner with respect to
the approval of the Reorganization under the Connecticut BHC Act, and obtain
such approval.
2.04. The Bank shall, with the cooperation of Bancorp, take all action
necessary to file with the Federal Deposit Insurance Corporation (the "FDIC') a
proxy statement/prospectus (the "Proxy Statement") relating to the Special
Meeting and the issuance of the Bancorp Common Stock pursuant to this Plan.
2.05. From the date hereof to the Effective Time, (a) the Bank shall not
issue or reserve for issuance any shares of Bank Preferred Stock and (b) other
than the 100 shares of Bancorp Common Stock issued or to be issued to the Bank,
Bancorp shall not issue or reserve for issuance any shares of Bancorp Common
Stock.
ARTICLE III
BANK EMPLOYEE BENEFIT PLANS AND SHAREHOLDER STOCK PURCHASE PLAN
3.01. At the Effective Time, Bancorp shall automatically and without
further action on its part adopt, and assume the rights and obligations of the
Bank under, the Cornerstone Bank 1996 Incentive and Non-Qualified Stock Option
Plan, the Cornerstone Bank 1986 Incentive and Non-Qualified Stock Option Plan,
the Directors Compensation Plan, and the Cornerstone Bank Dividend Reinvestment
and Stock Purchase Plan (collectively, the "Bank Stock Plans"), as the Bank
Stock Plans are then in effect (subject to certain conforming amendments
necessitated by the change in sponsorship of such plans). The Bank Stock Plans
shall, pursuant to their terms, thereafter apply only to shares of Bancorp
Common Stock in the same manner as they theretofore applied to shares of Bank
Common Stock. Bancorp shall reserve for issuance a sufficient number of shares
of Bancorp Common Stock in order to fulfill its obligations pursuant to this
Section 3.01 and shall take such action as it deems necessary or advisable to
permit the issuance of such shares under applicable state and federal securities
laws and rules and regulations thereunder. Approval of this Plan by the
shareholders of the Bank shall be deemed to be approval of the Bank Stock Plans
by the shareholders of Bancorp.
3.02. At the Effective Time, all rights and options then outstanding under
the Bank Stock Plans, which immediately prior thereto had given the holder
thereof the right to purchase shares of Bank Common Stock, shall, automatically
and without further action on the part of the holder thereof, be converted into
rights and options giving the holder thereof the right to purchase the same
number of shares of Bancorp Common Stock at the same exercise price per share,
and containing such other terms and conditions, as pertained under the rights
and options outstanding under the Bank Stock Plans immediately prior to the
Effective Time.
-3-
<PAGE>
ARTICLE IV
CONDITIONS
4.01. The consummation of the Reorganization is subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) This Plan and the transactions contemplated hereby shall have
received the approval by affirmative vote of the holders of at least two-
thirds of the outstanding shares of Bank Common Stock entitled to vote at
the Special Meeting or any adjournment thereof;
(b) All regulatory approvals and authorizations, including without
limitation, the approvals of (i) all state securities law agencies which
have jurisdiction over the offer and sale of Bancorp Common Stock
pursuant to the Reorganization, (ii) the Federal Reserve Board under the
BHC Act (iii) the Commissioner under the Connecticut BHC Act, and (iv)
all other consents, approvals and permissions necessary to permit
consummation of the Reorganization, shall have been received and shall be
in full force and effect and all waiting periods required in connection
with any such approvals shall have expired;
(c) The issuance by the Bancorp of its securities shall qualify for
an exemption from the filing requirements of the SEC pursuant to Section
3(a)(12) of the Securities Act, or, in the absence of such exemption, a
registration statement shall have been declared effective under the
Securities Act and at the Effective Time no stop order shall have been
issued and no proceedings therefor shall have been initiated or
threatened by the SEC;
(d) The Proxy Statement shall have been filed in accordance with the
rules and regulations of the FDIC and shall have been mailed to the
shareholders of the Bank in accordance with such rules and regulations;
(e) The Bank and the Bancorp shall have received an opinion of their
tax advisor with respect to the tax consequences of the Plan and the
transactions contemplated hereby;
(f) The Bank shall have determined that the number of shares of Bank
Common Stock owned by Dissenting Shareholders shall not make consummation
of the Reorganization inadvisable;
(g) The Bancorp Common Stock shall have been accepted as a substitute
listing by the American Stock Exchange; and
(h) The Plan shall have been filed with the Secretary of the State of
the State of Connecticut after approval thereof by the Commissioner.
ARTICLE V
BOARD OF DIRECTORS AND OFFICERS
5.01. On and after the Effective Time and until changed in the manner
prescribed by law, the Board of Directors of Bancorp shall be divided into three
classes, Class I, Class II and Class III, as nearly equal in number as is
reasonably possible. Other than the initial directors in Class I and Class II
who will serve for one-year terms and two-year terms, respectively, each
director shall be elected for a three-year term, with one class of directors
being elected at each annual meeting of shareholders. In the event of any
increase or decrease in the authorized number of directors, directorships will
be apportioned among the classes by the Registrant's Board of Directors to
ensure that no one class has more than one director more than any other class,
to the extent possible. The Bancorp Board of Directors shall consist of: Class
I directors (whose terms expire in 1999) Joseph S. Field, Jr., J. James Gordon,
-4-
<PAGE>
Courtney A. Nelthropp and Richard M. Sontag; Class II directors (whose terms
expire in 2000) Stanley A. Levine, Ronald C. Miller, Martin Prince, Patrick
Tisano and Dr. Joseph D. Waxberg, M.D.; and Class III directors (whose terms
expire in 2001) James P. Jakubek, Joseph A. Maida, Melvin L. Maisel and Norman
H. Reader, each of the whom is a current director in identical classes of the
Bank. Norman H. Reader shall be the President and Chief Executive Officer of
Bancorp, James P. Jakubek shall be Executive Vice President and Chief Operating
Officer, Paul H. Reader shall be Senior Vice President and Leigh A. Hardisty
shall be Vice President, Chief Financial Officer and Secretary.
ARTICLE VL
AMENDMENT AND TERMINATION
6.01. At any time prior to the Effective Time, the Bank and Bancorp may,
by written agreement, amend, modify or supplement this Plan; provided, however,
that no such amendment, modification or supplement which, in the sole judgment
of the Bank's Board of Directors, would have a materially adverse effect upon
the rights of the Bank's shareholders, may be effected without the approval of
such shareholders.
6.02. The Plan may be abandoned by either the Bank or Bancorp at any time
before the Effective Time in the event that:
(a) The number of shares of Bank Common Stock owned by Dissenting
Shareholders, as defined in Subsection 1.05, shall make consummation of
the Reorganization inadvisable in the opinions of the Bank or Bancorp;
(b) Any action, suit, proceeding or claim has been instituted,
made or threatened relating to the Plan which shall make consummation of
the Reorganization inadvisable in the opinion of the Bank or Bancorp; or
(c) For any other reason consummation of the Reorganization is
inadvisable in the opinion of the Bank or Bancorp.
Such abandonment shall be effected by written notice by the Bank or Bancorp
to the other of them, and shall be authorized or approved by the Board of
Directors of the party giving such notice. Upon the giving of such notice, the
Plan shall be terminated and there shall be no liability hereunder or on account
of such on the part of the Bank or Bancorp or the Directors, officers,
employees, agents or shareholders of either of them. In the event of
abandonment of the Plan, the Bank shall pay the fees and expenses incurred by
itself and Bancorp in connection with the Plan and the proposed Reorganization.
If either party hereto gives written notice of termination to the other party
pursuant to this section, the party giving such written notice shall
simultaneously furnish a copy thereof to the Banking Commissioner.
ARTICLE VII
MISCELLANEOUS
7.01. This Plan (a) constitutes the entire agreement, and supersedes all
other prior agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof; (b) is not intended to
confer upon any person not a party hereto any rights or remedies hereunder; (c)
shall not be assigned, by operation of law or otherwise, by any party without
the express consent of the other party; (d) shall be binding upon and inure to
the benefit of the respective successors and permitted assigns of the parties
hereto; (e) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Connecticut without
giving effect to any choice of law doctrines that would make applicable the law
of any other state; and (f) may be executed in two or more counterparts, each of
which, when so executed, shall be deemed to be an original, and all of which
together shall constitute a single agreement.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be executed
and attested to by their respective officers thereunto duly authorized as of the
date first above written.
CORNERSTONE BANK
By ____________________________
Its
Attest:
_____________________________
Its Secretary
CORNERSTONE BANCORP, INC.
By_____________________________
Its
Attest:
_____________________________
Its Secretary
-6-
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF INCORPORATION
OF
CORNERSTONE BANCORP, INC.
ARTICLE I
---------
NAME OF CORPORATION
-------------------
The name of this corporation shall be CORNERSTONE BANCORP, INC.
ARTICLE II
----------
REGISTERED OFFICE AND AGENT
---------------------------
The address of the Corporation's initial registered office in the State of
Connecticut is 550 Summer Street, Stamford, CT 06901. The Corporation's
registered agent is Paul R. Pescatello. The registered agent's business address
is One American Row, Hartford, CT 06103 and his residence address is 3 Brighton
Lane, Simsbury, CT 06070.
ARTICLE III
-----------
SHAREHOLDERS MEETINGS
---------------------
SECTION 1. ANNUAL AND SPECIAL MEETINGS
---------------------------
There shall be an annual meeting of the shareholders to elect directors and
transact whatever other business may be brought before the meeting. It shall be
held at the Corporation's Registered Office or any other convenient place the
Board of Directors may designate, on the day of each year specified therefor in
the bylaws, but if no election is held on that day, it may be held on any
subsequent day according to such lawful rules as may be prescribed by the Board
of Directors. The Board of Directors of this Corporation, or any one or more
shareholders owning, in the aggregate, not less than ten percent (10%) of the
voting stock of this Corporation, may call a special meeting of shareholders at
any time. Unless otherwise provided by the laws of the United States, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10 days prior to the date of the meeting to each shareholder of record at
his or her address as shown upon the books of this Corporation.
SECTION 2. NOMINATIONS FOR BOARD OF DIRECTORS
----------------------------------
Nominations of persons for election to the Board of Directors may be made
at an annual meeting of shareholders or a special meeting of shareholders at
which directors are to be elected pursuant to the Registrant's notice of meeting
(a) if specified in the Registrant's notice of meeting, (b) by or at the
direction of the Board of Directors or (c) by any shareholder of Bancorp who was
a shareholder of record at the time of giving of notice as described below, who
is entitled to vote at the meeting and who complies with such notice procedures.
For nominations to be properly brought before a meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Bancorp. To be timely, a shareholder's notice shall be
delivered to the Secretary at the principal executive offices of the Bancorp not
later than the close of business on the sixtieth (60th) day nor earlier than the
close of business on the ninetieth (90th) day prior to the first anniversary of
the preceding year's annual meeting (or not earlier than the ninetieth (90th)
day prior to a special meeting nor later than the sixtieth (60th) day prior to
such special meeting); provided, however, that in the event that the date of an
annual meeting is more than thirty (30) days before or more than sixty (60) days
after such an anniversary date, notice by the shareholder to be timely must be
so delivered not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day
<PAGE>
prior to such annual meeting or the close of business on the tenth (10th) day
following the day on which public announcement of the date of such meeting is
first made by the Bancorp. Such shareholder's notice shall set forth (a) as to
each person whom the shareholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is otherwise
required, in each case, pursuant to Regulation 14A under the Exchange Act
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (b) as to the
shareholder giving notice and the beneficial owner, if any, on whose behalf the
nomination is made (i) the name and address of such shareholder, as it appears
on the Registrant's books, and of such beneficial owner and (ii) the class and
number of shares of the Bancorp that are owned beneficially and held of record
by such shareholder and such beneficial owner.
Nominations not made in accordance herewith may be disregarded by the
chairperson of the meeting, in his or her discretion, and upon his or her
instructions, the vote tellers may disregard all votes cast for each such
nominee.
ARTICLE IV
----------
BOARD OF DIRECTORS
------------------
SECTION 1. BOARD MEMBERSHIP
----------------
The Board of Directors of this Corporation shall consist of not less than
three shareholders, the exact number to be fixed from time to time by resolution
adopted by the affirmative vote of at least eighty percent (80%) of the full
Board of Directors, provided, however, that the total number of directors may
-----------------
not be increased or decreased by more than two (2) from the number determined by
the Board of Directors in connection with the last previous election of
directors by the shareholders.
Any vacancies on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, increase in the authorized
number of directors or other cause may be filled for the balance of the
unexpired term only by a vote of eighty percent (80%) of the full Board of
Directors at any regular or special meeting of the Board of Directors called for
that purpose.
Any director or the entire Board of Directors may be removed at any time,
but only for cause and only by the affirmative vote of the holders of at least
eighty percent (80%) of all the outstanding capital stock entitled to vote on
election of directors at a meeting of the shareholders called for that purpose,
except that if the Board of Directors, by an affirmative vote of at least eighty
percent of the full Board of Directors, recommends removal of a director to the
shareholders, such removal requires the affirmative vote of the holders of at
least a majority of the outstanding capital stock entitled to vote on the
election of directors.
Effective as of the annual meeting of shareholders in 1998, the Board of
Directors shall be divided into three classes, designated as Class I, Class II
and Class III, with each class containing approximately the same percentage of
the total, as near as may be; and the term of office of directors of one class
shall expire at each annual meeting of shareholders, and in all cases until
their successors shall be elected and qualified, or until their earlier
resignation, removal from office, death or incapacity. The initial term of
office of Class I shall expire at the annual meeting of shareholders in 1999;
that of Class II shall expire at the annual meeting of shareholders in 2000; and
that of Class III shall expire at the annual meeting of shareholders in 2001,
and in all cases as to each director until his or her successor shall be elected
and qualified, or until his or her earlier resignation, removal from office,
death or disability. Subject to the foregoing, at each annual meeting of
shareholders, the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the third
succeeding annual meeting and until their successors are elected and qualified.
-2-
<PAGE>
SECTION 2. BOARD POWERS
------------
The Board of Directors shall appoint one of its members President of this
Corporation, who shall be Chairperson of the board, unless the board appoints
another director to be the Chairperson. The Board of Directors shall have the
power to appoint one or more Vice Presidents; and to appoint a Cashier and such
other officers and employees as may be required to transact the business of this
Corporation.
The Board of Directors shall have power to:
(a) Define the duties of the officers and employees of the Corporation;
(b) Fix the salaries to be paid to the officers and employees;
(c) Dismiss officers and employees;
(d) Require bonds from officers and employees and fix the penalty thereof;
(e) Regulate the manner in which any increase of the capital of the
Corporation shall be made;
(f) Manage and administer the business and affairs of the Corporation;
(g) Make all bylaws that it may be lawful for the Board to make;
(h) Perform generally all acts that are legal for a Board of Directors to
perform.
ARTICLE V
---------
CAPITAL STOCK
-------------
SECTION 1. CAPITAL STOCK - GENERAL
-----------------------
The authorized amount of capital stock of this Corporation shall be two
million (2,000,000) shares all of which shall be common stock, par value $0.01
per share. The capital stock of this Corporation may be increased or decreased
from time to time, in accordance with the provisions of the laws of the State of
Connecticut.
No holder of shares of the capital stock of any class of the Corporation
shall have any preemptive or preferential right of subscription to any shares of
any class of stock of the Corporation, whether now or hereafter authorized, or
to any obligations convertible into stock of the Corporation, issued or sold,
nor any right of subscription to any thereof other than such, if any, as the
Board of Directors, in its discretion may from time to time determine and at
such price as the Board of Directors may from time to time fix.
The Corporation may, at any time and from time to time, authorize and issue
debt obligations, whether or not subordinated, without the approval of the
shareholders.
ARTICLE VI
----------
DURATION
--------
The corporate existence of this Corporation shall continue until terminated
according to the laws of the State of Connecticut.
-3-
<PAGE>
ARTICLE VII
-----------
INDEMNIFICATION
---------------
(a) The personal liability of any director to the Corporation or its
shareholders for monetary damages for breach of duty as a director shall be
limited to an amount equal to the compensation received by the director for
serving the Corporation as a director during the year of the violation if such
breach did not:
(1) involve a knowing and culpable violation of law by the director;
(2) enable the director or an associate, as defined in subdivision (3)
of Section 33-843 of the Connecticut General Statutes, to receive an improper
personal economic gain;
(3) show a lack of good faith and a conscious disregard for the duty
of the director to the Corporation under circumstances in which the director was
aware that his conduct or omission created an unjustifiable risk of serious
injury to the Corporation;
(4) constitute a sustained and unexcused pattern of inattention that
amounted to an abdication of the director's duty to the Corporation; or
(5) create liability under Section 36a-58 or Section 33-757 of the
Connecticut General Statutes.
This provision shall not limit or preclude the liability of a director for any
act or omission occurring prior to the effective date of this provision.
(b) Any person, his or her heirs, executors, or administrators may be
indemnified or reimbursed by the Corporation for reasonable expenses actually
incurred in connection with any action, suit or proceeding, civil or criminal,
to which he or she or they shall be made a party by reason of his or her being
or having been a director, officer, or employee of the Corporation or of any
firm, corporation, or organization which he or she served in any such capacity
at the request of the Corporation; Provided, however, that no person shall be so
-----------------
indemnified or reimbursed relative to any matter in such action, suit, or
proceeding as to which he or she shall finally be adjudged to have been guilty
of or liable for gross negligence, willful misconduct or criminal acts in the
performance of his or her duties to the Corporation; And, provided, further,
-----------------
that no person shall be so indemnified or reimbursed relative to any matter in
such action, suit, or proceeding which has been made the subject of a compromise
settlement except with the approval of a court of competent jurisdiction, or the
holders of record of a majority of the outstanding shares of the Corporation, or
the Board of Directors, acting by vote of directors not parties to the same or
substantially the same action, suit, or proceeding, constituting a majority of
the whole number of directors. The foregoing right of indemnification or
reimbursement shall not be exclusive of other rights of which such persons, his
or her heirs, executors, or administrators, may be entitled as a matter of law.
The Corporation may, upon the affirmative vote of a majority of its Board
of Directors, purchase insurance to indemnify its directors, officers and other
employees to the extent that such indemnification is allowed in the preceding
paragraph. Such insurance may, but need not, be for the benefit of all
directors, officers or employees.
-4-
<PAGE>
ARTICLE VIII
------------
INCORPORATOR
------------
The name and address of the sole incorporator is as follows:
Paul R. Pescatello
Shipman & Goodwin LLP
One American Row
Hartford, Connecticut 06103-2819
ARTICLE IX
----------
AMENDMENTS
----------
This Certificate of Incorporation may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the voting stock of this Corporation, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount: Provided, however, that the affirmative vote of
-----------------
the holders of at least eighty percent (80%) of the voting stock of this
Corporation shall be required to amend or repeal or adopt any provision
inconsistent with Article Third, Sections 1 or 2.
-5-
<PAGE>
EXHIBIT 4.2
BYLAWS
OF
CORNERSTONE BANCORP, INC.
ARTICLE I
MEETINGS OF SHAREHOLDERS
------------------------
Section 1.1 Annual Meeting. The regular meeting of the shareholders to
--------------
elect directors and transact whatever other business may properly come before
the meeting, shall be held at the main office of the Corporation, 550 Summer
Street, City of Stamford, State of Connecticut, or such other places as the
board of directors may designate, at 3:00 p.m. on the 15th day of May of each
year, or such other substitute date as the Board of Directors may designate by
resolution. When the regular meeting of shareholders falls on a holiday, the
meeting shall be held on the next banking business day unless the board shall
designate another day. Notice of the meeting shall be mailed, postage prepaid
at least 10 days prior to the date thereof, addressed to each shareholder at his
address appearing on the books of the Corporation. If, for any cause, any
election of directors is not made on that day, the board of directors shall
order the election to be held on some subsequent day, as soon thereafter as
practicable according to the provisions of law; and notice shall be given in the
manner herein provided for the annual meeting.
Section 1.2 Special Meetings. Except as otherwise specifically provided
----------------
by statute, special meetings of the shareholders may be called for any purpose
at any time by the board of directors or by any one or more shareholders owning,
in the aggregate, not less than ten percent of the common stock of the
Corporation. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid not less than 10 days prior to the date
fixed for the meeting, to each shareholder at this address appearing on the
books of the Corporation a notice stating the purpose of the meeting.
Section 1.3 Nominations of Directors. Nominations of persons for election
------------------------
to the Board of Directors may be made at an annual meeting of shareholders or a
special meeting of shareholders at which directors are to be elected pursuant to
the Registrant's notice of meeting (a) if specified in the Registrant's notice
of meeting, (b) by or at the direction of the Board of Directors or (c) by any
shareholder of Bancorp who was a shareholder of record at the time of giving of
notice as described below, who is entitled to vote at the meeting and who
complies with such notice procedures.
For nominations to be properly brought before a meeting by a shareholder,
the shareholder must have given timely notice thereof in writing to the
Secretary of the Bancorp. To be timely, a shareholder's notice shall be
delivered to the Secretary at the principal executive offices of the Bancorp not
later than the close of business on the sixtieth (60th) day nor earlier than the
close of business on the ninetieth (90th) day prior to the first anniversary of
the preceding year's annual meeting (or not earlier than the ninetieth (90th)
day prior to a special meeting nor later than the sixtieth (60th) day prior to
such special meeting); provided, however, that in the event that the date of an
annual meeting is more than thirty (30) days before or more than sixty (60) days
after such an anniversary date, notice by the shareholder to be timely must be
so delivered not earlier than the close of business on the ninetieth (90th) day
prior to such annual meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such annual meeting or the close of
business on the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made by the Bancorp. Such shareholder's
notice shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or reelection as a director all information
<PAGE>
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case,
pursuant to Regulation 14A under the Exchange Act (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (b) as to the shareholder giving notice
and the beneficial owner, if any, on whose behalf the nomination is made (i) the
name and address of such shareholder, as it appears on the Registrant's books,
and of such beneficial owner and (ii) the class and number of shares of the
Bancorp that are owned beneficially and held of record by such shareholder and
such beneficial owner.
Nominations not made in accordance herewith may, in his or her discretion,
be disregarded by the chairperson of the meeting, and upon his or her
instructions, the vote tellers may disregard all votes cast for each such
nominee.
Section 1.4 Judges of Election. Every election of directors shall be
------------------
managed by three judges, who shall be appointed from among the shareholders by
the board of directors. The judges of election shall hold and conduct the
election at which they are appointed to serve. After the election, they shall
file with the cashier a certificate signed by them, certifying the result
thereof and the names of the directors elected. The judges of election, at the
request of the chairperson of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall certify the result thereof.
Section 1.5 Proxies. Shareholders may vote at any meeting of the
-------
shareholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting, to be specified therein, and any adjournments of such meeting.
Proxies shall be dated and filed with the records of the meeting. Nothing
herein shall be construed as prohibiting any officer, director, employee or
shareholder from acting as a proxy.
Section 1.6 Quorum. A majority of the outstanding capital stock,
------
represented in person or by proxy shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Certificate of Incorporation.
ARTICLE II
BOARD OF DIRECTORS
------------------
Section 2.1 General Authority. The board of directors shall have power to
-----------------
manage and administer the business and affairs of the Corporation. Except as
expressly limited by law, all corporate powers of the Corporation shall be
vested in and may be exercised by the board.
Section 2.2 Number of Directorships. The board of directors of this
-----------------------
Corporation shall consist of not less than three shareholders, the exact number
to be fixed from time to time by resolution adopted by the affirmative vote of
at least eighty percent (80%) of the full board of directors, provided, however,
--------- -------
that the total number of directors may not be increased or decreased by more
than two (2) from the number determined by the board of directors in connection
with the last previous election of directors by the shareholders.
Section 2.3 Removal of Directors. Any director or the entire board of
--------------------
directors may be removed at any time, but only for cause and only by the
affirmative vote of the holders of at least eighty percent (80%) of all the
outstanding capital stock entitled to vote on election of directors at a meeting
of the stockholders called for that purpose except that if the board of
directors, by an affirmative vote of at least eighty percent (80%) of the full
board of directors, recommends removal of a director to the shareholders, such
removal requires the affirmative vote of the holders of at least a majority of
the outstanding capital stock entitled to vote on the election of directors.
Section 2.4 Organization Meeting. The secretary, upon receiving the
--------------------
certificate of the judges of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required to
meet at
-2-
<PAGE>
the main office of the Corporation to organize the new board and elect and
appoint officers of the Corporation for the succeeding year. Such meeting shall
be held on the day of the election or as soon thereafter as practicable and, in
any event, within 30 days thereof. If, at the time fixed for such meeting, there
shall not be a quorum the directors present may adjourn the meeting, from time
to time, until a quorum is obtained.
Section 2.5 Regular Meetings. The regular meetings of the board of
----------------
directors shall be held, without notice, on the third Wednesday of each month at
the main office. When any regular meeting of the board falls upon a holiday the
meeting shall be held on the next banking business day unless the board shall
designate some other day.
Section 2.6 Special Meetings. Special meetings of the board of directors
----------------
may be called by the president or chief executive officer of the Corporation or
at the request of one or more directors. Each member of the board of directors
shall be given notice stating the time and place by telegram, letter, or in
person, of each special meeting.
Section 2.7 Quorum. A majority of the directors shall constitute a quorum
------
at any meeting, except when otherwise provided by law; but a less number may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.
Section 2.8 Vacancies. Any vacancies on the board of directors resulting
---------
from death, resignation, retirement, disqualification removal from office,
increase in the authorized number of directors or other cause may be filled for
the balance of the unexpired term only by a vote of eighty percent (80%) of the
full board of directors at any regular or special meeting of the board of
directors called for that purpose.
ARTICLE III
COMMITTEES OF THE BOARD
-----------------------
Section 3.1 Committees. (a) The board of directors, by the affirmative
----------
vote of a majority of the entire Board, may designate one or more committees,
each committee to consist of one or more directors, as the board may deem
proper. Such committees shall have such names as may be determined from time to
time by resolution adopted by the board of directors.
(b) 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. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.
(c) Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority to:
(1) authorize distributions;
(2) approve or propose actions required to be approved by the
shareholders;
(3) fill vacancies on the board of directors or any of its committees;
(4) amend the certificate of incorporation;
(5) adopt, amend or repeal any provisions of these Bylaws;
(6) approve a plan of merger not requiring shareholder approval;
-3-
<PAGE>
(7) authorize or approve the reacquisition by the corporation of its
shares of stock, except according to a formula or method specifically
prescribed by the board of directors; or
(8) authorize or approve the issuance or sale of shares or determine the
designation and relative rights, preferences and limitations of a
class or series of shares unless within any limits prescribed by the
board of directors.
Section 3.2 Committee Meetings. Meetings of any committee of the board of
------------------
directors may be called by either the president or any of the members of such
committee upon at least one (2) days' written or oral notice of the place, date
and time. The notice need not state the purpose of such meeting. A majority of
the committee members shall constitute a quorum for the transaction of business,
and if a quorum exists, the action of the majority of those present at any
meeting shall be the action of the committee. Each committee shall keep minutes
of its proceedings.
ARTICLE IV
OFFICERS AND EMPLOYEES
----------------------
Section 4.1 Chairperson of the Board. The board of directors shall
------------------------
appoint one of its members to be the chairperson of the board to serve at its
pleasure. Such person shall preside at all meetings of the board of directors.
The chairperson of the board shall supervise the carrying out of the policies
adopted or approved by the board; shall have general executive powers as well as
the specific powers conferred by these Bylaws; shall also have and may exercise
such further powers and duties as from time to time may be conferred or assigned
by the board of directors.
Section 4.2 President. The board of directors shall appoint one of its
---------
members to be the president of the Corporation. In the absence of the
chairperson, the president shall preside at any meeting of the board. The
president shall have general executive powers, and shall have and may exercise
any and all other powers and duties pertaining by law, regulation, or practice,
to the office of president or imposed by these bylaws. The president shall also
have and may exercise such further powers and duties as from time to time may be
conferred or assigned by the board of directors.
Section 4.3 Vice President. The board of directors may appoint one or
--------------
more vice presidents. Each vice president shall have such powers and duties as
may be assigned by the board of directors. One vice president shall be
designated by the board of directors, in the absence of the president, to
perform all the duties of the president.
Section 4.4 Secretary. The board of directors shall appoint a secretary
---------
or other designated officer who shall be secretary of the board and of the
Corporation, and shall keep accurate minutes of all meetings. The secretary
shall attend to the giving of all notices required by these bylaws to be given;
shall be custodian of the corporate seal, records, documents and papers of the
Corporation; shall provide for the keeping of proper records of all transactions
of the Corporation; shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the office of secretary, or
imposed by these bylaws; and shall also perform such other duties as may be
assigned from time to time by the board of directors.
Section 4.5 Other Officers. The board of directors may appoint one or
--------------
more assistant vice presidents, one or more assistant secretaries and such other
officers and attorneys-in-fact as from time to time may appear to the board of
directors to be required or desirable to transact the business of the
Corporation. Such officers shall respectively exercise such powers and perform
such duties as pertain to their several offices, or as may be conferred upon, or
assigned to, them by the board of directors, the chairperson of the board, or
the president.
Section 4.6 Tenure of Office. The president and all other officers shall
----------------
hold office for the term for which they are appointed and until their successors
have been elected and qualified, unless they shall resign, become disqualified
or be removed; and any vacancy occurring in the office of president shall be
filled promptly by the board of directors.
-4-
<PAGE>
ARTICLE V
STOCK AND STOCK CERTIFICATES
----------------------------
Section 5.1 Transfers. Shares of stock shall be transferable on the books
---------
of the Corporation, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights of the prior holder of
such shares.
Section 5.2 Stock Certificates. Certificates of stock shall bear the
------------------
signature of the president (which may be engraved, printed or impressed), and
shall be signed manually or by facsimile process by the secretary, assistant
secretary, cashier, assistant cashier, or any other officer appointed by the
board of directors for that purpose, to be known as an authorized officer, and
the seal of the Corporation shall be engraved thereon. Each certificate shall
recite on its face that the stock represented thereby is transferable only upon
the books of the Corporation properly endorsed.
ARTICLE VI
CORPORATE SEAL
--------------
The president, the secretary or any assistant secretary, or other officer
thereunto designated by the board of directors, shall have authority to affix
the corporate seal to any document requiring such seal, and to attest the same.
Such seal shall be substantially in the following form:
Impression
of
Seal
ARTICLE VII
MISCELLANEOUS PROVISIONS
------------------------
Section 7.1 Fiscal Year. The fiscal year of the Corporation shall be the
-----------
calendar year.
Section 7.2 Execution of Instruments. All agreements indentures,
------------------------
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies and other instruments or
documents may be signed, executed, acknowledged, verified, delivered or accepted
on behalf of the Corporation by the chairperson of the board, or the president,
or any vice president, or the secretary. Any such instruments may also be
executed, acknowledged, verified, delivered or accepted on behalf of the
Corporation in such other manner and by such other officers as the board of
directors may from time to time direct. The provisions of this section 7.2 are
supplementary to any other provision of these bylaws.
Section 7.3 Records. The Certificate of Incorporation, the bylaws and the
-------
proceedings of all meetings of the shareholders, the board of directors, and
standing committees of the board, shall be recorded in appropriate minute books
provided for that purpose. The minutes of each meeting shall be signed by the
secretary or other officer appointed to act as secretary of the meeting.
-5-
<PAGE>
ARTICLE VIII
BYLAWS
------
Section 8.1 Inspection. A copy of the bylaws with all amendments, shall
----------
at all times be kept in a convenient place at the main office of the
Corporation, and shall be open for inspection to all shareholders during banking
hours.
Section 8.2 Amendments. The bylaws may be amended, altered or repealed,
----------
at any regular meeting of the board of directors, by a vote of a majority of the
total number of the directors.
-6-
<PAGE>
EXHIBIT 4.3
COMMON STOCK COMMON STOCK
Number Shares
CB [logo] CORNERSTONE BANCORP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF CONNECTICUT
SEE REVERSE FOR
CERTAIN DEFINITIONS
CUSIP 218925 10 5
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, EACH OF THE PAR VALUE OF
ONE CENT ($.01) OF
CORNERSTONE BANCORP, INC.
Transferable only upon the books of the corporation by the holder hereof in
person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate and the shares represented hereby are
issued and shall be held subject to all of the provisions of the Certificate of
Incorporation and the Bylaws of the corporation as amended from time to time, to
which the holder by acceptance hereof asserts.
This certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
WITNESS the facsimile seal of the corporation and the facsimile signatures
of its duly authorized officers.
DA
COUNTERSIGNED AND REGISTERED: [SEAL]
AMERICAN STOCK TRANSFER & TRUST COMPANY
TRANSFER AGENT AND REGISTRAR SECRETARY
BY
AUTHORIZED SIGNATURE PRESIDENT
<PAGE>
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 under Uniform Gifts to Minors
survivorship and not as tenants in Act ______________________________________
common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received, ____________________________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------------
- ------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------- Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
- ----------------------------------------------------------------------- Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated:_________________________________
___________________________________________
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 WHATEVER.
_____________________________________________________
SIGNATURE(S) GUARANTEED: THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
