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EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
PENN MAR BANCSHARES, INC.
FIRST: The undersigned, Eric E. Glass, whose post office address is
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5130 Allendale Lane, Taneytown, Maryland 21787, being at least eighteen (18)
years of age, does hereby form a corporation under and by virtue of the general
laws of the State of Maryland.
SECOND: The name of the corporation (the "Corporation") is:
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PENN MAR BANCSHARES, INC.
THIRD: The purposes for which Corporation is formed are as follows:
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1. To own and hold the stock of financial institutions and otherwise
operate as a financial institution holding company and to carry on any and all
business activities permitted by law; and
2. To do anything permitted by Section 2-103 of the Maryland General
Corporation Law, as amended from time to time (the "MGCL").
FOURTH: The post office address of the principal office of the
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Corporation in this State is 5130 Allendale Lane, Taneytown, Maryland 21787. The
name and post office address of the resident agent of the Corporation in this
State are Eric E. Glass, 5130 Allendale Lane, Taneytown, Maryland 21787. The
resident agent is an individual actually residing in this State.
FIFTH: The total authorized capital stock of the Corporation is Ten
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Million (10,000,000) shares, consisting of Nine Million (9,000,000) shares of
common stock, with a par value of $0.01 per share, and One Million (1,000,000)
shares of preferred stock, with a par value of $0.01 per share. The aggregate
par value of all authorized shares is $100,000.
The designations and the preferences, conversion or other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of the shares of each class of capital stock
are as follows:
(a) Common Stock. Subject to all of the rights of holders of any
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preferred stock established pursuant to paragraph (b) of this Article FIFTH,
each share of common stock shall possess all such rights and privileges as are
afforded to capital stock by applicable law in the absence of any express grant
of rights or privileges in the Corporation's Charter, including, but not limited
to, the following rights and privileges:
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(i) dividends may be declared and paid or set apart for
payment upon the common stock out of any assets or funds of the Corporation
legally available for the payment of dividends;
(ii) the holders of common stock shall have the right to
vote on all matters requiring stockholder action, each share being entitled to
one vote; and
(iii) upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the net assets of the Corporation
shall be distributed pro rata to the holders of the common stock in accordance
with their respective rights and interests.
(b) Preferred Stock. The preferred stock may be issued from
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time to time by the Board of Directors as shares of one or more series. The
description of shares of each series of such preferred stock, including the
designation, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or terms or conditions of redemption
shall be as set forth in resolutions adopted by the Board of Directors and in
Articles Supplementary filed as required by law from time to time prior to the
issuance of any shares of such series.
SIXTH: (a) At such time as the Corporation has stock outstanding, the
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Corporation shall have three (3) directors, which number may be increased or
decreased pursuant to the Bylaws of the Corporation, but shall never be less
than three (3), unless the number of stockholders is less than three (3), in
which case the number of directors shall not be less than the number of
stockholders. The name of the director who shall act until his successors are
duly elected and qualify is Eric E. Glass.
(b) At the first annual meeting of the stockholders, the
directors shall be divided into three classes, Class A, Class B and Class C, the
number of directors in each class to be as nearly equal in number as possible.
Each director shall serve for a term ending on the date of the third annual
meeting following the annual meeting at which such director was elected;
provided, however, that the Class A Directors first chosen shall hold office
until the first annual meeting following their election or appointment, the
Class B Directors first chosen shall hold office until the second annual meeting
following their election or appointment, and the Class C Directors first chosen
shall hold office until the third annual meeting following their election or
appointment. Each director elected shall hold office until his successor shall
be duly elected and shall qualify.
(c) Notwithstanding any provision to the contrary contained in
the MGCL, a director may only be removed from office upon the affirmative vote
of eighty percent (80%) of all of the votes entitled to be cast on the matter,
at any meeting of the stockholders called for the purpose.
(d) This Article SIXTH may not be amended except by the
affirmative vote, cast in person or by proxy, of the holders of record of eighty
percent (80%) of the shares of the capital stock of the Corporation entitled to
vote thereon.
SEVENTH: (a) The Corporation shall indemnify and advance expenses to
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its directors as and to the fullest extent permitted by the MGCL.
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(b) The Corporation shall indemnify and advance expenses to its
officers and former officers to the same extent that it shall indemnify and
advance expenses to its directors.
(c) No amendment to the Charter of the Corporation or repeal of any
of its provisions shall limit or eliminate the protection afforded by this
Article SEVENTH to a director or officer or former officer with respect to any
act or omission that occurred prior to such amendment or repeal.
(d) For purposes of this Article SEVENTH, the word "director" shall
have the meaning ascribed to that word by Section 2-418 of the MGCL.
EIGHTH: The following provisions are hereby adopted for the purpose
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of defining, limiting and regulating the powers of the Corporation and of the
directors and stockholders:
(a) The Corporation reserves the right to adopt from time to time any
amendment to its Charter, as now or thereafter authorized by law, including any
amendment that alters the contract rights, as expressly set forth in the
Charter, of any outstanding stock.
(b) The Board of Directors of the Corporation is hereby empowered to
authorize the issuance from time to time of shares of its stock of any class or
series, whether now or hereafter authorized, or securities convertible into
shares of its stock of any class or classes or series, whether now of hereafter
authorized, for such consideration as the Board of Directors deems advisable;
and the Board of Directors may classify or reclassify any unissued shares or
securities by fixing or altering in any one or more respects, from time to time
before issuance of such shares or securities, the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption, of such shares or
securities.
The enumeration and definition of a particular power of the Board of Directors
included in this Article shall in no way be limited or restricted by reference
to or inference from the terms of any other clause of this or any other Article
of the Charter of the Corporation, or construed as or deemed by inference or
otherwise in any manner to exclude or limit any powers conferred upon the Board
of Directors under the General Laws of the State of Maryland now or hereafter in
force.
NINTH: (a) No proposed transaction resulting in a Business
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Combination (hereinafter defined) shall be valid unless approved by the
affirmative vote, cast in person or by proxy, of the holders of record of eighty
percent (80%) of the shares of the capital stock of the Corporation entitled to
vote thereon.
(b) This Article NINTH may not be amended except by the
affirmative vote, cast in person or by proxy, of the holders of record of eighty
percent (80%) of the shares of the capital stock of the Corporation entitled to
vote thereon.
(c) "Business Combination" as used herein shall mean the
following proposed transactions:
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(i) the merger or consolidation of the Corporation or any
subsidiary of the Corporation;
(ii) the sale, exchange, transfer or other disposition (in one
or a series of transactions) of substantially all of the assets of the
Corporation or any subsidiary of the Corporation; or
(iii) any offer for the exchange of securities of another entity
for the securities of the Corporation.
TENTH: To the fullest extent permitted by Maryland law, as amended or
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interpreted from time to time, no director or officer or former director or
officer of the Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment to the Charter of the Corporation
or repeal of any of its provisions shall limit or eliminate the benefits
provided by this Article TENTH to the directors or former directors or officers
or former officers with respect to any act or omission that occurred prior to
such amendment or repeal.
IN WITNESS WHEREOF, I do hereby acknowledge these Articles of Incorporation
to be my act this 30/th/ day of September, 1999.
/s/ Eric E. Glass (SEAL)
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Eric E. Glass
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