Exhibit 4.2
Description of Generations Bancorp NY, Inc. Common Stock
Unless otherwise indicated or the context otherwise requires, references in this Exhibit 4.2 to “we, “us” and “our” refer collectively to Generations Bancorp NY, Inc. and Generations Bank or to any of those entities, depending on the context.
General
Generations Bancorp NY, Inc. is authorized to issue 14,000,000 shares of common stock, par value of $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share.  Each share of common stock has the same relative rights as, and is identical in all respects to, each other share of common stock.  All of our shares of common stock are duly authorized, fully paid and nonassessable.
Common Stock
Dividends. Generations Bancorp NY, Inc. can pay dividends on its common stock if, after giving effect to the distribution, it would be able to pay its indebtedness as the indebtedness comes due in the usual course of business and its total assets exceed the sum of its liabilities and the amount needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have a preference in the event of dissolution.  The holders of common stock of Generations Bancorp NY, Inc. are entitled to receive and share equally in dividends as may be declared by our Board of Directors out of funds legally available therefor.  If we issue shares of preferred stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.
Voting Rights.  The holders of our common stock have exclusive voting rights in Generations Bancorp NY, Inc.  They elect our Board of Directors and act on other matters as are required to be presented to them under Maryland law or as are otherwise presented to them by the Board of Directors.  Generally, each holder of common stock is entitled to one vote per share and does not have any right to cumulate votes in the election of directors.  Any person who beneficially owns more than 10% of the outstanding shares of our common stock, however, is not be entitled or permitted to vote any shares of common stock held in excess of the 10% limit.  If we issues shares of preferred stock, holders of the preferred stock may also possess voting rights. Amendments to the articles of incorporation generally require a two-thirds vote, and certain amendments require an 80% stockholder vote.
Liquidation. In the event of any liquidation, dissolution or winding up of Generations Bank, Generations Bancorp NY, Inc., as the holder of 100% of Generations Bank’s capital stock, would be entitled to receive all assets of Generations Bank available for distribution, after payment or provision for payment of all debts and liabilities of Generations Bank, including all deposit accounts and accrued interest thereon, and after distribution of the balance in the liquidation account to “Eligible Account Holders” and “Supplemental Eligible Account Holders” (as defined in the Plan of Conversion of The Seneca Falls Savings Bank, MHC). In the event of liquidation, dissolution or winding up of Generations Bancorp NY, Inc., 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 Generations Bancorp NY, Inc. 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.
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Preemptive Rights. Holders of our common stock are not entitled to preemptive rights with respect to any shares that may be issued, unless such preemptive rights are approved by the Board of Directors.  The common stock is not subject to redemption.
Preferred Stock
None of the shares of Generations Bancorp NY, Inc.’s authorized preferred stock are outstanding. Preferred stock may be issued with preferences and designations as our Board of Directors may from time to time determine. Our Board of Directors may, without stockholder approval, issue shares of preferred stock with voting, dividend, liquidation and conversion rights that 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.
Generations Bancorp NY, Inc.’s Articles of Incorporation and Bylaws
Generations Bancorp NY, Inc.’s articles of incorporation and bylaws contain a number of provisions relating to corporate governance and rights of stockholders that might discourage future takeover attempts.  As a result, stockholders who might desire to participate in such transactions may not have an opportunity to do so. In addition, these provisions will also render the removal of the Board of Directors or management of Generations Bancorp NY, Inc. more difficult.
Directors. The Board of Directors is divided into three classes.  The members of each class are elected for a term of three years and only one class of directors is elected annually.  Thus, it would take at least two annual elections to replace a majority of our directors.  The bylaws establish qualifications for board members, including restrictions on affiliations with competitors of Generations Bank and prior legal or regulatory violations and a requirement that board members maintain residence within thirty (30) miles of an office of the Company or Generations Bank for a period of at least one year immediately before his or her nomination or appointment to the Board of Directors.  Further, the bylaws impose notice and information requirements in connection with the nomination by stockholders of candidates for election to the Board of Directors or the proposal by stockholders of business to be acted upon at an annual meeting of stockholders.  Such notice and information requirements are applicable to all stockholder business proposals and nominations, and are in addition to any requirements under the federal securities laws.
Evaluation of Offers.  The articles of incorporation of Generations Bancorp NY, Inc. provide that its Board of Directors, when evaluating a transaction that would or may involve a change in control of Generations Bancorp NY, Inc. (whether by purchases of its securities, merger, consolidation, share exchange, dissolution, liquidation, sale of all or substantially all of its assets, proxy solicitation or otherwise), may, in connection with the exercise of its business judgment in determining what is in the best interests of Generations Bancorp NY, Inc. and its stockholders and in making any recommendation to the stockholders, give due consideration to all relevant factors, including, but not limited to:
		·
	the economic effect, both immediate and long-term, upon Generations Bancorp NY, Inc.’s stockholders, including stockholders, if any, who do not participate in the transaction;


		·
	the social and economic effect on the present and future employees, creditors and customers of, and others dealing with, Generations Bancorp NY, Inc. and its subsidiaries and on the communities in which Generations Bancorp NY, Inc. and its subsidiaries operate or are located;


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		·
	whether the proposal is acceptable based on the historical, current or projected future operating results or financial condition of Generations Bancorp NY, Inc.;


		·
	whether a more favorable price could be obtained for Generations Bancorp NY, Inc.’s stock or other securities in the future;


		·
	the reputation and business practices of the other entity to be involved in the transaction and its management and affiliates as they would affect the employees of Generations Bancorp NY, Inc. and its subsidiaries;


		·
	the future value of the stock or any other securities of Generations Bancorp NY, Inc. or the other entity to be involved in the proposed transaction;


		·
	any antitrust or other legal and regulatory issues that are raised by the proposal;


		·
	the business and historical, current or expected future financial condition or operating results of the other entity to be involved in the transaction, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the proposed transaction, and other likely financial obligations of the other entity to be involved in the proposed transaction; and


		·
	the ability of Generations Bancorp NY, Inc. to fulfill its objectives as a financial institution holding company and on the ability of its subsidiary financial institution(s) to fulfill the objectives of a federally insured financial institution under applicable statutes and regulations. the economic effect, both immediate and long-term, upon Generations Bancorp NY, Inc.’s stockholders, including stockholders, if any, who do not participate in the transaction;


If the Board of Directors determines that any proposed transaction should be rejected, it may take any lawful action to defeat such transaction.
Restrictions on Call of Special Meetings.  The bylaws provide that special meetings of stockholders can be called by only the President, the Chief Executive Officer, the Chairperson of the Board or by the Board of Directors, or the Secretary upon the written request of stockholders entitled to cast a majority of all votes entitled to vote at the meeting..
Prohibition of Cumulative Voting.  The articles of incorporation prohibit cumulative voting for the election of directors.
Limitation of Voting Rights.   The articles of incorporation provide that in no event will any person who beneficially owns more than 10% of the then-outstanding shares of common stock be entitled or permitted to vote any of the shares of common stock held in excess of the 10% limit; provided that such 10% limit shall not apply if a majority of the unaffiliated directors approve the acquisition of shares in excess of the 10% limit prior to such acquisition.
Restrictions on Removing Directors from Office.  The articles of incorporation provide that directors may be removed only for cause, and only by the affirmative vote of the holders of at least two-thirds (2/3) of the voting power of all of the then-outstanding shares of capital stock of Generations Bancorp NY, Inc. entitled to vote generally in the election of directors (after giving effect to the limitation on voting rights discussed above in “ − Limitation of Voting Rights”), voting together as a single class.
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Authorized but Unissued Shares.  Generations Bancorp NY, Inc. has authorized but unissued shares of common and preferred stock.  The articles of incorporation authorize 1,000,000 shares of serial preferred stock.  Generations Bancorp NY, Inc. is authorized to issue preferred stock from time to time in one or more series subject to applicable provisions of law, and the board of directors is authorized to fix the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of such shares.  In addition, the articles of incorporation provide that a majority of the whole board may, without action by the stockholders, amend the articles of incorporation to increase or decrease the aggregate number of shares of stock of any class or series that Generations Bancorp NY, Inc. has the authority to issue.  In the event of a proposed merger, tender offer or other attempt to gain control of Generations Bancorp NY, Inc. that the board of directors does not approve, it would be possible for the board of directors to authorize the issuance of a series of preferred stock with rights and preferences that would impede the completion of the transaction.  An effect of the possible issuance of preferred stock therefore may be to deter a future attempt to gain control of Generations Bancorp NY, Inc.
Amendments to Articles of Incorporation and Bylaws.  Except as provided under “ − Authorized but Unissued Shares,” above, regarding the amendment of the articles of incorporation by the Board of Directors to increase or decrease the number of shares authorized for issuance, or as otherwise allowed by law, any amendment to the articles of incorporation must be approved by our Board of Directors and also by two-thirds of the outstanding shares of our voting stock (or a majority of the outstanding shares of our voting stock if the amendment is approved by two-thirds of our board of directors); provided, however, that approval by at least 80% of the outstanding voting stock is generally required to amend the following provisions:
		(i)
	The limitation on voting rights of persons who directly or indirectly beneficially own more than 10% of the outstanding shares of common stock;


		(ii)
	The division of the board of directors into three staggered classes;


		(iii)
	The ability of the board of directors to fill vacancies on the board;


		(iv)
	The requirement that at least a majority of the voting power of the stockholders must vote to remove directors, and can only remove directors for cause;


		(v)
	The ability of the board of directors to amend and repeal the bylaws and the required stockholder vote to amend or repeal the bylaws;


		(vi)
	The ability of the board of directors to evaluate a variety of factors in evaluating offers to purchase or otherwise acquire Generations Bancorp NY, Inc.;


		(vii)
	The authority of the board of directors to provide for the issuance of preferred stock;


		(viii)
	The validity and effectiveness of any action lawfully authorized by the affirmative vote of the holders of a majority of the total number of outstanding shares of common stock;


		(ix)
	The number of stockholders constituting a quorum or required for stockholder consent;


		(x)
	The provision regarding stockholder proposals and nominations;


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		(xi)
	The indemnification of current and former directors and officers, as well as employees and other agents, by Generations Bancorp NY, Inc.;


		(xii)
	The limitation of liability of officers and directors to Generations Bancorp NY, Inc. for money damages; and


		(xiii)
	The provision of the articles of incorporation requiring approval of at least 80% of the outstanding voting stock to amend the provisions of the articles of incorporation set forth in (i) through (xii) of this list and the provisions related to amendment of the articles of incorporation.


The articles of incorporation also provide that the bylaws may be amended by the affirmative vote of a majority of the total number of directors that Generations Bancorp NY, Inc. would have if there were no vacancies on the board of directors or by the stockholders by the affirmative vote of at least 80% of the votes entitled to be cast in the election of directors (after giving effect to the limitation on voting rights discussed above in “ – Limitation of Voting Rights”).
Maryland Corporate Law
Under Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, statutory share exchange or, in circumstances specified in the statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications involving interested stockholders and their affiliates or issuance or reclassification of equity securities. Maryland law defines an interested stockholder as: (i) any person who beneficially owns 10% or more of the voting power of a corporation’s voting stock after the date on which Generations Bancorp NY, Inc. had 100 or more beneficial owners of its stock; or (ii) an affiliate or associate of Generations Bancorp NY, Inc. at any time after the date on which Generations Bancorp NY, Inc. had 100 or more beneficial owners of its stock who, within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting stock of Generations Bancorp NY, Inc.. A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board.
After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of Generations Bancorp NY, Inc. and approved by the affirmative vote of at least: (i) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of Generations Bancorp NY, Inc. and (ii) two-thirds of the votes entitled to be cast by holders of voting stock of Generations Bancorp NY, Inc. other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder. These super-majority vote requirements do not apply if Generations Bancorp NY, Inc.’s common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.
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Change in Control Regulations
Under the Change in Bank Control Act, no person may acquire control of an insured savings association or its parent holding company unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition.  The Federal Reserve Board takes into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition.  In addition, federal regulations provide that no company may acquire control of a savings association without the prior approval of the Federal Reserve Board.  Any company that acquires such control becomes a “savings and loan holding company” subject to registration, examination and regulation by the Federal Reserve Board.
Control, as defined under federal law, means ownership, control of or holding irrevocable proxies representing more than 25% of any class of voting stock, control in any manner of the election of a majority of the company’s directors, or a determination by the Federal Reserve Board that the acquirer has the power to direct, or directly or indirectly exercise a controlling influence over, the management or policies of the institution.  Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances including where, as is the case with Generations Bancorp NY, Inc., the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.  Federal Reserve Board regulations provide that parties seeking to rebut control will be provided an opportunity to do so in writing.
Benefit Plans
In addition to the provisions of Generations Bancorp NY, Inc.’s articles of incorporation and bylaws described above, benefit plans of Generations Bancorp NY, Inc. and Generations Bank that may authorize the issuance of equity to its board of directors, officers and employees contain or may contain provisions which also may discourage hostile takeover attempts which the board of directors of Generations Bank might conclude are not in the best interests of Generations Bancorp NY, Inc. and Generations Bank or Generations Bancorp NY, Inc.’s stockholders.