Exhibit
3.1





ARTICLES
OF INCORPORATION


OF


SEVERN
BANCORP, INC.





The
undersigned, Alan J. Hyatt, whose post office address is 1919A West Street,
Annapolis, Maryland 21401, being at least eighteen years of age, acting as
incorporator, does hereby form a corporation under the General Laws of the State
of Maryland with the following Articles of Incorporation:





ARTICLE
I





Name





The
name of the Corporation is Severn Bancorp, Inc. (herein the
"Corporation").





ARTICLE
II





Principal
Office





The
post office address of the principal office of the Corporation in the State of
Maryland is 1919A West Street, Annapolis, Maryland 21401.





ARTICLE
III





Powers





The
purpose for which the Corporation is organized is to act as a financial
institution holding company and to transact all other lawful business for which
corporations may be incorporated pursuant to the General Laws of the State of
Maryland. The Corporation shall have all the powers of a Corporation organized
under the General Laws of the State of Maryland.





ARTICLE
IV





Resident
Agent





The
name and post office address of the resident agent of the Corporation in
Maryland is Alan J. Hyatt, 1919 West Street, Annapolis, Maryland, 21401. The
resident agent is a citizen of the State of Maryland and actually resides
therein.





ARTICLE
V





Capital
Stock





A.
Number. The total number of shares of all classes of stock which the Corporation
shall have authority to issue is Three Million (3,000,000) shares of which Two
Million (2,000,000) shares shall be common stock of the par value of $0.01 per
share, all of one class, and of which One Million (1,000,000) shares shall be
Serial Preferred Stock of the par value of $0.01 per share.





Shares,
whether now or hereafter authorized, may be issued by the Corporation from time
to time upon the approval of the board of directors of the Corporation and
without the approval of the stockholders except as otherwise provided in this
Article V or the rules of a national securities exchange, if applicable. The
consideration for the issuance of the shares shall be paid to or received by the
Corporation in full before their issuance and shall not be less than the
par value per share.








Exhibit
3.1 -- Page 1 --




B.
Dividends. The holders of the common stock are entitled at all times to one vote
for each share and to such dividends as the Board of Directors may in their
discretion legally declare, subject, however, to the voting and dividend rights,
if any, of the holders of the Preferred Stock. In the event of any liquidation,
dissolution or winding up of the Corporation, the remaining assets of the
Corporation after the payment of all debts and necessary expenses, subject,
however, to the right of the holders of the Preferred Stock then outstanding,
shall be distributed among the holders of the Common Stock pro rata in
accordance with their respective holdings. The Common Stock is subject to all of
the terms and provisions of the Preferred Stock as fixed by the Board of
Directors as hereinafter provided.





C.
Preferred Stock. The Board of Directors shall have the authority to classify and
reclassify any unissued shares of Preferred Stock by authorizing the issuance of
the Preferred Stock in one or more series with such distinctive designations as
may be established by the Board of Directors and any such series: (a) may have
such voting powers, full or limited, or may be without voting powers; (b) may be
subject to redemption at such time and at such prices; (c) may be entitled to
receive dividends (which may be cumulative or noncumulative) at such rate or
rates, on such conditions, and at such times and payable in preference to, or in
such relation to, the dividends payable on any other class or classes or series
of stock; (d) may have such rights upon the dissolution of, or upon distribution
of the assets of, the Corporation; (e) may be made convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same or any other class or classes of stock of the Corporation, at such
price or prices or at such rates of exchange, and with such adjustments; and (f)
shall have such other preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms or conditions
of redemption or other rights, as shall hereafter be authorized by the Board of
Directors and stated and expressed in sections supplementary to this charter
document providing for the issuance of such Preferred Stock.





ARTICLE
VI





Preemptive
Rights





No
holder of any of the shares of any class or series of stock or of options,
warrants, or other rights to purchase shares of any class or series of stocks or
of other securities of the Corporation shall have any preemptive right to
purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of any class or series or carrying
the right to purchase stock of any class or series.





ARTICLE
VII





Repurchase
of Shares





The
Corporation may from time to time, pursuant to authorization by the Board of
Directors of the Corporation and without action by the stockholders, purchase or
otherwise acquire shares of any class, bonds, debentures, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
Board of Directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.





ARTICLE
VIII





Meetings
of Shareholders; Cumulative Voting





A.
Anytime in the interval between annual meetings, a special meeting of
stockholders may only be called by the Chairman of the Board, the President, by
a majority of the Board of Directors by vote at a meeting or in writing, or by
the written request of the holders of a minimum of 25% of the outstanding
capital stock entitled to vote at the meeting.








Exhibit
3.1 -- Page 2 --





B.
Stockholders shall not have cumulative voting rights.





ARTICLE
IX





Initial
Directors





The
Corporation shall be under the direction of a Board of Directors which shall
initially consist of eleven (11) directors. The number of directors may be
increased or decreased pursuant to the bylaws of the Corporation, but shall
never be fewer than the minimum number required by applicable law, nor more than
fifteen (15). The names of the directors who shall act until the first meeting
or until their successors are duly chosen and qualified are:




Alan
      J. Hyatt
                          Carroll
      H. Hynson
                          H.
      Erle SchaferMelvin
      E. Meekins
                          S.
      Scott Kirkley
                          T.
      Theodore SchultzLouis
      DiPasquale
                          Ronald
      Pennington
                          Keith
      StockMelvin
      Hyatt
                          Vincent
      J. Pompa




ARTICLE
X





Directors





A.
Classified Board. The Board of Directors shall be divided into three classes,
Class I, Class II, and Class III. Each such class shall consist, as nearly as
possible, of one-third of the total number of directors and any remaining
directors shall be included within such class or classes as the Board of
Directors shall designate.





The
following persons shall constitute Class I and shall serve as directors until
the 1991 annual meeting of stockholders: Alan J. Hyatt, Melvin E. Meekins, Louis
DiPasquale, and Melvin Hyatt.





The
following persons shall constitute Class II and shall serve as directors until
the 1992 annual meeting of stockholders: Carroll H. Hynson, S. Scott Kirkley,
Ronald Pennington, and Vincent J. Pompa.





The
following persons shall constitute Class III and shall serve as directors until
the 1993 annual meeting of stockholders: H. Erle Schafer, Keith Stock, and T.
Theodore Schultz.





At
each annual meeting of stockholders beginning in 1991, successors to the class
of directors whose term expires at that annual meeting shall be elected for a
term of three years.





If
the number of directors is changed, any increase or decrease shall be
apportioned among the classes so as to maintain the number of directors in each
class as nearly equal as possible. A director shall hold office, subject to any
removal, death, resignation, or retirement until the annual meeting for the year
in which his term expires and until his successor shall be elected and
qualifies.





To
the extent that any holders of any class or series of stock other than Common
Stock shall have the separate right, voting as a class or series, to elect
directors, the directors elected by such class or series shall be deemed to
constitute an additional class of directors and shall have a term of office for
one year or such other period as may be designated by the provisions of such
class or series providing such separate voting rights to the holders of such
class or series of stock, and any such class of directors shall be in addition
to the classes designated above.






Exhibit
3.1 -- Page 3 --





B.
Removal. Any director of the Corporation may be removed with cause by the
affirmative vote of the holders of 75 percent of all the votes entitled to be
cast for the election of directors but no director may be removed by the
stockholders without cause.





ARTICLE
XI





Indemnification
and Limitations on Liability





A.
Indemnification. The Corporation shall indemnify: (a) its directors to the full
extent provided under the Maryland General Corporation Law now or hereafter in
force, including the advance of expenses under the procedures provided by such
laws; (b) its officers to the same extent it shall indemnify its directors; and
(c) its officers who are not directors to such further extent as shall be
authorized by the Board of Directors and be consistent with law.
The foregoing shall not limit the authority of the Corporation to indemnify
other employees and agents consistent with law.





B.
Insurance. The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, trust or other enterprise, against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability.





C.
Limitations on Liability. To the fullest extent permitted by Maryland statutory
or decisional law, as amended or interpreted, no director or officer of this
Corporation shall be personally liable to the Corporation or its shareholders
for money damages. No amendment of the Charter of the Corporation or repeal of
any of its provisions' shall limit or eliminate the benefits provided to
directors and officers under this provision with respect to any act or omission
which occurred prior to such amendment or repeal.





ARTICLE
XII





Acquisition
Proposals





The
Board of Directors shall base the response of the Corporation to any
"Acquisition Proposal" on the Board of Directors' evaluation of what is in the
best interest of the Corporation. In evaluating what is in the best interest of
the Corporation, the Board of Directors shall consider:





(a)
The best interest of the stockholders. For this purpose, the Board shall
consider among other factors, not only the consideration offered in the
Acquisition Proposal in relation to the then current market price of the
Corporation's stock, but also in relation to the current value of the
Corporation in a freely negotiated transaction and in relation to the Board of
Directors' then estimate of the future value of the Corporation as an
independent entity or as the subject of a future Acquisition
Proposal





(b)
The best interests of depositors of banks affiliated with the Corporation and of
other creditors of the Corporation and its subsidiaries; and





(c)
Such other factors as the Board of Directors determines to be relevant,
including, among other factors, the social, legal and economic effects upon
employees, suppliers, customers and the business of the Corporation and its
subsidiaries and on the communities in which the Corporation and its
subsidiaries operate or are located.





"Acquisition
Proposal" means any proposal for the consolidation or merger of the Corporation
with another corporation, any share exchange involving the Corporation's
outstanding capital stock, any liquidation or dissolution of the Corporation,
any transfer of all or a material portion of the assets of the Corporation, and
any tender offer or exchange offer for any of the Corporation's outstanding
stock.





Exhibit
3.1 – Page  4 --


ARTICLE
XIII





Amendment
of Articles of Incorporation





The
Corporation reserves the right to repeal, alter, amend or rescind any
provision contained in these Articles in the manner now or hereafter prescribed
by law, and all rights conferred on stockholders herein are granted subject to
this reservation. Notwithstanding the foregoing, the provisions set forth in
Articles VI through XIV, inclusively, of these Articles may not be repealed,
altered, amended or rescinded in any respect unless the same is approved by the
affirmative vote of the holders of not less than 80% of the outstanding shares
of capital stock of the Corporation entitled to vote generally in the election
of directors (after giving effect to the provisions of Article V) cast at a
meeting of the stockholders called for that purpose.





ARTICLE
XIV





Duration





The
duration of the Corporation shall be perpetual.








IN
WITNESS WHEREOF,I, Alan J. Hyatt, being the hereinabove named incorporator, do
hereby acknowledge these Articles of Incorporation to be my act and deed on this
28th day of August, 1990.





/s/
Alan J. Hyatt


----------------------------------------------


Alan
J. Hyatt, Incorporator





Exhibit
3.1 – Page  5 --








SEVERN
BANCORP, INC.


ARTICLES
OF AMENDMENT





Severn
Bancorp, Inc., a Maryland corporation, having its principal office at 1919A West
Street, Annapolis, Maryland 21401 (the "Corporation") hereby certifies to the
State Department of Assessments and Taxation of Maryland (the "Department")
that:





FIRST:
Pursuant to Section 2-607(b) of the Corporations and Associations Article of the
Annotated Code of Maryland (the "Code"), immediately prior to these Articles of
Amendment:





(i)   the
total number of shares of stock of all classes which the Corporation has
authority to issue is 3,000,000 shares, of which 2,000,000 shares
are  common stock with a par value of $0.01 per share and 1,000,000
shares are preferred shares with a par value of $0.01 per share;





(ii)  the
aggregate par value of the 3,000,000 shares is $30,000; and





(iii) the
information required by Section 2-607(b)(2)(i) is not changed by these Articles
of Amendment. As amended, the total number of shares of stock of all classes
which the Corporation has authority to issue is 21,000,000 shares, of which
20,000,000 shares are common stock with a par value of $0.01 per share and
1,000,000 shares are preferred stock with a par value of $0.01 per share, and
the aggregate par value of the 21,000,000 shares is $210,000.





SECOND:
The Articles of Incorporation (the "Articles") of the Corporation are amended as
follows:





(i)   Article
V, Part A of the Articles is deleted in its entirety and replaced with the
following: "The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Twenty-One Million (21,000,000)
shares, of which Twenty Million (20,000,000) shares shall be common stock with a
par value of $0.01 per share, all of one class, and of which One Million
(1,000,000) shares shall be serial preferred stock with a par value of
$0.01 per share. Shares, whether now or hereafter authorized, may be issued by
the Corporation from time to time upon the approval of the Board of
Directors of the Corporation and without the


approval
of the stockholders except as otherwise provided in this Article V or the rules
of a national securities exchange, if applicable. The consideration for the
issuance of the shares shall be paid to or received by the Corporation in full
before their issuance and shall not be less than the par value per
share."





(ii)  Article
XIII of the Articles is amended by adding the following to the end of Article
XII: "Notwithstanding anything to the contrary contained in these Articles, the
Board of Directors, with the approval of a majority of the entire Board of
Directors, and without action by the shareholders, may amend these Articles to
increase or decrease the aggregate number of shares of stock of the Corporation
or the number of shares of any class that the Corporation has authority to
issue."





THIRD:
These amendments to the Articles were duly advised by the Board of Directors of
the Corporation and duly approved by the stockholders of the Corporation in
accordance with the Code.








Exhibit
3.1 – Page 6 --


IN
WITNESS WHEREOF, Severn Bancorp, Inc. has caused these Articles of Amendment to
be signed in its name and on its behalf by its President and its corporate seal
to be hereunder affixed and attested by its Secretary on this 22nd day of
February, 2002, and its President acknowledges that these Articles of Amendment
are the act and deed of Severn Bancorp, Inc. and, under the penalties of
perjury, that the matters and facts set forth herein with respect to
authorization and approval are true in all material respects to the best of
his


knowledge,
information, and belief.





ATTEST:                                        SEVERN
BANCORP, INC.





/s/
S. Scott
Kirkley                          By:
/s/ Alan J. Hyatt


--------------------------------                   -----------------------------


S.
Scott Kirkley,
Secretary                       Alan
J. Hyatt, President












Exhibit
3.1 – Page 7 --


ARTICLES
OF AMENDMENT




SEVERN
BANCORP, INC.







Severn
Bancorp, Inc., a Maryland corporation, having its principal office at 200
Westgate Circle, Suite 200, Annapolis, Maryland 21401 (the “Corporation”) hereby
certifies to the State Department of Assessments and Taxation of Maryland (the
“Department”) that:




FIRST:
The Articles of Incorporation (the “Articles”) of the Corporation are amended as
follows:




1.           The
Articles are amended by inserting immediately after Article V, Part C of the
Articles, a new Part D as attached hereto.




SECOND:  This
amendment of the Articles has been approved by the Board of Directors of the
Corporation.  Approval of the shareholders of the Corporation is not
required.




We the
undersigned President and Secretary swear under penalties of perjury that the
foregoing is a corporate act.









ATTEST:                                                           SEVERN
BANCORP, INC.









By: /s/ S. Scott
Kirkley                                       y: /s/Alan J.
Hyatt


S. Scott Kirkley,
Secretary                             Alan
J. Hyatt, President


Exhibit
3.1 – Page 8 --




D. Designation of Series A8.0% Non-CumulativeConvertiblePreferred
Stock.
 
 Based on
the authority set forth in Article V, Parts A and C of the Articles, the Board
hereby establishes and designates a series of Preferred Stock from the Preferred
Stock available for issuance under Article V, Part A of the Articles, to be
known as “Series A 8.0% Non-Cumulative Convertible Preferred Stock” having the
following terms:
 
 Section 1.
Designation.
 
 The
designation of the series of preferred stock shall be “Series A 8.0%
Non-Cumulative Convertible Preferred Stock” (the “Series A Preferred
Stock ”). Each share of Series A Preferred Stock shall be identical in
all respects to every other share of Series A Preferred Stock. Series A
Preferred Stock will rank equally with Parity Stock, if any, will rank senior to
Junior Stock and will rank junior to Senior Stock, if any, with respect to the
payment of dividends and/or the distribution of assets in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation.
 
 Section 2.
Number of Shares.
 
 The
number of authorized shares of Series A Preferred Stock shall be 437,500. That
number from time to time may be increased (but not in excess of the total number
of authorized shares of preferred stock) or decreased (but not below the number
of shares of Series A Preferred Stock then outstanding) by further resolution
duly adopted by the Board of Directors or any other duly authorized committee
thereof and by the filing of Articles of Amendment pursuant to the provisions of
the General Corporation Law of the State of Maryland stating that such increase
or reduction, as the case may be, has been so authorized. The Corporation shall
have the authority to  issue fractional shares of Series A Preferred
Stock.
 
 Section 3. Definitions.
As used herein with respect to Series A Preferred Stock:
 
 “Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person. For the purposes of this definition, “control” when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.
 
 “Board of Directors”
means the Board of Directors of the Corporation.
 
 “Business Day” means
any weekday that is not a legal holiday in New York, New York and is not a day
on which banking institutions in New York, New York are authorized or required
by law or regulation to be closed.
 
 “Closing Price” of the
Common Stock on any date of determination means the closing sale price or, if no
closing sale price is reported, the last reported sale price of the shares of
the Common Stock on the Nasdaq Capital Market on such date. If the Common Stock
is not traded on the Nasdaq Capital Market on any date of determination, the
Closing Price of the Common Stock on such date of determination means the
closing sale price as reported in the composite transactions for the principal
U.S. national or regional securities exchange on which the Common Stock is so
listed or quoted, or, if no closing sale price is reported, the last reported
sale price on the principal U.S. national or regional securities exchange on
which the Common Stock is so listed or quoted, or if the Common Stock is not so
listed or quoted on a U.S. national or regional securities exchange, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by Pink Sheets LLC or similar organization, or, if that bid price is not
available, the market price of the Common Stock on that date as determined by a
nationally recognized investment banking firm (unaffiliated with the
Corporation) retained by the Corporation for this purpose.
   Exhibit
3.1 – Page 9 --
 
 “Common Stock” means
the common stock of the Corporation, par value $0.01 per share, or any other
shares of the capital stock of the Corporation into which such shares of common
stock shall be reclassified or changed.
 
 “Constituent Person”
has the meaning set forth in Section 10(a).
 
 “Conversion Agent”
means the Transfer Agent acting in its capacity as conversion agent for the
Series A Preferred Stock, and its successors and assigns.
 
 “Conversion at the Option of
theCorporationDate” has the
meaning set forth in Section 8(c).
 
 “Conversion Date” has
the meaning set forth in Section 7(e).
 
 “Conversion Price” at
any time means, for each share of Series A Preferred Stock, a dollar amount
equal to $8.00 divided by the Conversion Rate (initially $8.00 per
share).
 
 “Conversion Rate”
means for each share of Series A Preferred Stock, one share of Common Stock,
subject to adjustment as set forth herein.
 
 “Series A Preferred
Stock” shall have the meaning set forth in Section 1.
 
 “Current Market Price”
per share of Common Stock on any day means the average of the VWAP per share of
Common Stock on each of the 10 consecutive Trading Days ending on the earlier of
the day in question and the day before the Ex-date or other specified date with
respect to the issuance or distribution requiring such computation,
appropriately adjusted to take into account the occurrence during such period of
any event described in Section 9.
 
 “Dividend Payment
Date” shall have the meaning set forth in Section 4(a).
 
 “Dividend Period”
shall have the meaning set forth in Section 4(a).
 
 “Dividend Record Date”
shall have the meaning set forth in Section 4(a).
 
 “Dividend Threshold
Amount” shall have the meaning set forth in
Section 9(a)(i).
  
 Exhibit
3.1 – Page 10 --
 
 “Ex-date” when used
with respect to any issuance or distribution, means the first date on which the
shares of Common Stock or other securities trade without the right to receive an
issuance or distribution.
 
 “Exchange Property”
has the meaning set forth in Section 10(a).
 
 “Holder” means the
Person in whose name the shares of the Series A Preferred Stock are registered,
which may be treated by the Corporation, Transfer Agent, Registrar, paying agent
and Conversion Agent as the absolute owner of the shares of Series A Preferred
Stock for the purpose of making payment and settling the related conversions and
for all other purposes.
 
 “Junior Stock” means
the Common Stock and any other class or series of stock of the Corporation now
existing or hereafter authorized over which Series A Preferred Stock has
preference or priority in the payment of dividends or in the distribution of
assets on any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation.
 
 “Market Disruption
Event” means any of the following events that has occurred:
 
 (i) any
suspension of, or limitation imposed on, trading by any exchange or quotation
system on which the Closing Price is determined pursuant to the definition of
the Trading Day (a “Relevant Exchange ”) during the one-hour period prior to the close of
trading for the regular trading session on the Relevant Exchange (or for
purposes of determining the VWAP per share of Common Stock any period or periods
aggregating one half-hour or longer during the regular trading session on the
relevant day) and whether by reason of movements in price exceeding limits
permitted by the Relevant Exchange, or otherwise relating to Common Stock or in
futures or options contracts relating to the Common Stock on the Relevant
Exchange;
 
 (ii) any
event (other than an event described in clause (iii)) that disrupts or impairs
(as determined by the Corporation in its reasonable discretion) the ability of
market participants during the one-hour period prior to the close of trading for
the regular trading session on the Relevant Exchange (or for purposes of
determining the VWAP per share of Common Stock any period or periods aggregating
one half-hour or longer during the regular trading session on the relevant day)
in general to effect transactions in, or obtain market values for, the Common
Stock on the Relevant Exchange or to effect transactions in, or obtain market
values for, futures or options contracts relating to the Common Stock on the
Relevant Exchange; or
 
 (iii) the
failure to open of the Relevant Exchange on which futures or options contracts
relating to the Common Stock, are traded or the closure of such exchange prior
to its respective scheduled closing time for the regular trading session on such
day (without regard to after hours or any other trading outside of the regular
trading session hours) unless such earlier closing time is announced by such
exchange at least one hour prior to the earlier of the actual closing time for
the regular trading session on such day, and the submission deadline for orders
to be entered into such exchange for execution at the actual closing time on
such day.
 
 “Notice of Conversion at the
Option of theCorporation” has the
meaning set forth in Section 8(c).
   Exhibit
3.1 – Page 11 --
 
 “Officer” means the
President, Chief Executive Officer, the Chairman, any Vice Chairman, any
Executive Vice President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, the Treasurer, any Assistant Treasurer, the General Counsel
and Corporate Secretary and any Assistant Secretary of the
Corporation.
 
 “Officers’
Certificate” means a certificate signed (i) by the President, Chief
Executive Officer, the Chairman, any Vice Chairman,  any Executive
Vice President, the Chief Financial Officer, the Controller or the Chief
Accounting Officer, and (ii) by the Treasurer, any Assistant Treasurer, the
Corporate Secretary or any Assistant Secretary of the Corporation, and delivered
to the Conversion Agent.
 
 “Parity Stock” means
any class or series of stock of the Corporation hereafter authorized that ranks
equally with the Series A Preferred Stock in the payment of dividends and in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
 
 “Person” means a legal
person, including any individual, corporation, estate, partnership, joint
venture, association, joint-stock company, limited liability company or
trust.
 
 “Record Date” has the
meaning set forth in Section 9(d).
 
 “Registrar” means the
Transfer Agent acting in its capacity as registrar for the Series A Preferred
Stock, and its successors and assigns.
 
 “Relevant Exchange”
has the meaning set forth above in the definition of Market Disruption
Event.
 
 “Reorganization Event”
has the meaning set forth in Section 10(a).
 
 “Senior Stock” means
any class or series of stock of the Corporation now existing or hereafter
authorized which has preference or priority over the Series A Preferred Stock as
to the payment of dividends or in the distribution of assets on any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation.
 
 “Trading Day” means,
for purposes of determining a VWAP or Closing Price per share of Common Stock or
a Closing Price, a Business Day on which the Relevant Exchange (as defined in
the definition of Market Disruption Event) is scheduled to be open for business
and on which there has not occurred or does not exist a Market Disruption
Event.
 
 “Transfer Agent” means
the Corporation acting as Transfer Agent, Registrar, paying agent and Conversion
Agent for the Series A Preferred Stock, and its successors and
assigns.
 
 “VWAP” per share of
the Common Stock on any Trading Day means the per share volume-weighted average
price as displayed under the heading Bloomberg VWAP on Bloomberg page C UN
<equity> AQR (or its equivalent successor if such page is not available)
in respect of the period from the open of trading on the relevant Trading Day
until the close of trading on the relevant Trading Day (or if such
volume-weighted average price is unavailable, the market price of one share of
Common Stock on such Trading Days determined, using a volume-weighted average
method, by a nationally recognized investment banking firm (unaffiliated with
the Corporation) retained for this purpose by the Corporation).
   Exhibit
3.1 – Page 12 --
 
 Section 4.
Dividends.
 
 (a) Rate. Holders shall be
entitled to receive, if, as and when declared by the Board of Directors, or any
other duly authorized committee thereof, but only out of assets legally
available therefor, non-cumulative cash dividends on the liquidation preference
of $8.00 per share of Series A Preferred Stock, and no more, payable quarterly
in arrears on the last day of each March, June, September and December;
provided, however, if any such day is not a Business Day, then payment of any
dividend otherwise payable on that date will be made on the next succeeding day
that is a Business Day, unless that day falls in the next calendar year, in
which case payment of such dividend will occur on the immediately preceding
Business Day (in either case, without any interest or other payment in respect
of such delay) (each such day on which dividends are payable a “Dividend Payment
Date ”). The period from and including the date of issuance of the Series
A Preferred Stock or any Dividend Payment Date to, but excluding, the next
Dividend Payment Date is a “Dividend Period .”
Dividends on each share of Series A Preferred Stock will accrue on the
liquidation preference of $8.00 per share at a rate per annum equal to 8.0%. The
record date for payment of dividends on the Series A Preferred Stock will be
such record date fixed by the Board of Directors or any duly authorized
committee thereof that is not more than 45 nor less than 10 days prior to
such Dividend Payment Date (each, a “Dividend Record Date
”). Any such day that is a Dividend Record Date will be a Dividend Record Date
whether or not such day is a Business Day. The amount of dividends payable will
be computed on the basis of a 360-day year of twelve 30-day months.
 
 (b) Non-Cumulative Dividends. If
the Board of Directors or any duly authorized committee thereof does not declare
a dividend on the Series A Preferred Stock for any Dividend Period prior to the
related Dividend Payment Date, that dividend will not accrue, and the
Corporation will have no obligation to pay, and Holders shall have no right to
receive, a dividend for that Dividend Period on the related Dividend Payment
Date or at any future time, whether or not dividends on the Series A Preferred
Stock or any other series of preferred stock or common stock are declared for
any subsequent Dividend Period.  References herein to the “accrual” of
dividends refer only to the determination of the amount of such dividend and do
not imply that any right to a dividend arises prior to the date on which a
dividend is declared.
 
 (c) Priority of Dividends. So long
as any share of Series A Preferred Stock remains outstanding, unless as to a
Dividend Payment Date full dividends on all outstanding shares of the Series A
Preferred Stock have been declared and paid or declared and a sum sufficient for
the payment of those dividends has been set aside for the Dividend Period then
ending, the Corporation will not, during such Dividend Period, declare or pay
any dividend on, make any distributions relating to, or redeem, purchase,
acquire or make a liquidation payment relating to, any of Junior Stock, or make
any guarantee payment with respect thereto, other than:
 
 (i)
purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants;
   Exhibit
3.1 – Page 13 --
 
 (ii)
purchases of shares of Common Stock pursuant to a contractually binding
requirement to buy stock existing prior to the commencement of the then-current
dividend period, including under a contractually binding stock repurchase
plan;
 
 (iii) as
a result of an exchange or conversion of any class or series of Junior Stock for
any other class or series of Junior Stock; or
 
 (iv) the
purchase of fractional interests in shares of Junior Stock pursuant to the
conversion or exchange provisions of such Junior Stock or the security being
converted or exchanged.
 
 The
foregoing restriction, however, will not apply to any Junior Stock dividends
paid by the Corporation where the dividend stock being paid is the same stock as
that on which the dividend is being paid.
 
 Except as
provided below, for so long as any share of Series A Preferred Stock remains
outstanding, if dividends are not declared and paid in full upon the shares of
Series A Preferred Stock and any Parity Stock, all dividends declared upon
shares of Series A Preferred Stock and any Parity Stock will be declared on a
proportional basis so that the amount of dividends declared per share will bear
to each other the same ratio that accrued dividends for the then-current
Dividend Period per share of Series A Preferred Stock and accrued dividends for
the then-current Dividend Period per share of any Parity Stock (including, in
the case of any such Parity Stock that bears cumulative dividends, all accrued
and unpaid dividends) bear to each other.
 
 Subject
to the foregoing, and not otherwise, such dividends payable in cash, stock or
otherwise, as may be determined by the Board of Directors or any duly authorized
committee thereof, may be declared and paid on any Junior Stock and Parity Stock
from time to time out of any assets legally available for such payment, and
Holders will not be entitled to participate in those dividends.
 
 (d) Conversion FollowingaRecord Date. If a Conversion
Date for any shares of Series A Preferred Stock is prior to the close of
business on a Dividend Record Date for any declared dividend for the
then-current Dividend Period, the Holder of such shares will not be entitled to
any such dividend. If the Conversion Date for any shares of Series A Preferred
Stock is after the close of business on a Dividend Record Date for any declared
dividend for the then-current Dividend Period, but prior to the corresponding
Dividend Payment Date, the Holder of such shares shall be entitled to receive
such dividend, notwithstanding the conversion of such shares prior to the
Dividend Payment Date. However, such shares, upon surrender for conversion, must
be accompanied by funds equal to the dividend on such shares; provided that no
such payment need be made if the Corporation has issued a notice of
conversion at its option of the Series A Preferred Stock in accordance with the
terms hereof.
 
 Section 5.
Liquidation Rights.
 
 (a) Liquidation. In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, Holders shall be entitled, out of assets legally
available therefor, before any distribution or payment out of the assets of the
Corporation may be made to or set aside for the holders of any Junior Stock and
subject to the rights of the holders of any class or series of securities
ranking senior to or on parity with Series A Preferred Stock upon liquidation
and the rights of the Corporation’s depositors and other creditors, to receive
in full a liquidating distribution in the amount of the liquidation preference
of $8.00 per share, plus any accrued dividends thereon from the last dividend
payment date to, but excluding, the date of the liquidation, dissolution or
winding up if and to the extent declared. Holders shall not be entitled to any
further payments in the event of any such voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation other than what is
expressly provided for in this Section 5.
  
 Exhibit
3.1 – Page 14 --
 (b) Partial Payment. If the assets
of the Corporation are not sufficient to pay in full the liquidation preference
plus any dividends which have been declared but not yet paid to all Holders and
all holders of any Parity Stock, the amounts paid to the Holders and to the
holders of all Parity Stock shall be pro rata in accordance with the respective
aggregate liquidating distributions to which they would otherwise be
entitled.
 
 (c) Residual Distributions. If the
respective aggregate liquidating distributions to which all Holders and all
holders of any Parity Stock are entitled have been paid, the holders of Junior
Stock shall be entitled to receive all remaining assets of the Corporation
according to their respective rights and preferences.
 
 (d) Merger, Consolidation andSaleof Assets Not Liquidation.
For purposes of this Section 5, the sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all or
substantially all of the property and assets of the Corporation or other
Reorganization Event shall not be deemed a voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, nor shall the
merger, consolidation or any other business combination transaction of the
Corporation into or with any other corporation or person or the merger,
consolidation or any other business combination transaction of any other
corporation or person into or with the Corporation be deemed to be a voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Corporation.
 
 Section 6.
Right of the Holders to Convert.
 
 Each
Holder shall have the right, at such Holder’s option, to convert all or any
portion of such Holder’s Series A Preferred Stock at any time into shares of
Common Stock at the Conversion Rate per share of Series A Preferred Stock
(subject to the conversion procedures of Section 7), plus cash in lieu of
fractional shares.
 
 Section 7.
Conversion Procedures.
 
 (a) Conversion Date. Effective
immediately prior to the close of business on any applicable Conversion Date,
dividends shall no longer be declared on any such converted shares of Series A
Preferred Stock and such shares of Series A Preferred Stock shall cease to be
outstanding, in each case, subject to the right of Holders to receive any
declared and unpaid dividends on such shares and any other payments to which
they are otherwise entitled pursuant to the terms hereof.
   Exhibit
3.1 – Page 15 --
 
 (b) Rights Prior to
Conversion.  Prior to the close of business on any applicable
Conversion Date, shares of Common Stock issuable upon conversion of, or other
securities issuable upon conversion of, any shares of Series A Preferred Stock
shall not be deemed outstanding for any purpose, and Holders shall have no
rights with respect to the Common Stock or other securities issuable upon
conversion (including voting rights, rights to respond to tender offers for the
Common Stock or other securities issuable upon conversion and rights to receive
any dividends or other distributions on the Common Stock or other securities
issuable upon conversion) by virtue of holding shares of Series A Preferred
Stock.
 
 (c) Reacquired Shares. Shares of
Series A Preferred Stock duly converted in accordance with these Articles
of Amendment, or otherwise reacquired by the Corporation, will resume the status
of authorized and unissued preferred stock, undesignated as to series and
available for future issuance. The Corporation may from time-to-time take such
appropriate action as may be necessary to reduce the authorized number of shares
of Series A Preferred Stock.
 
 (d) Record Holder as of Conversion
Date. The Person or Persons entitled to receive the Common Stock and/or
cash, securities or other property issuable upon conversion of Series A
Preferred Stock shall be treated for all purposes as the record holder(s) of
such shares of Common Stock and/or securities as of the close of business on any
applicable Conversion Date. In the event that a Holder shall not by written
notice designate the name in which shares of Common Stock and/or cash,
securities or other property (including payments of cash in lieu of fractional
shares) to be issued or paid upon conversion of shares of Series A Preferred
Stock should be registered or paid or the manner in which such shares should be
delivered, the Corporation shall be entitled to register and deliver such
shares, and make such payment, in the name of the Holder and in the manner shown
on the records of the Corporation.
 
 (e) Conversion Procedure. On the
date of any conversion, if a Holder’s interest is in certificated form, a Holder
must do each of the following in order to convert:
 
 (i)
complete and manually sign the conversion notice provided by the Conversion
Agent, or a facsimile of the conversion notice, and deliver this irrevocable
notice to the Conversion Agent;
 
 (ii)
surrender the shares of Series A Preferred Stock to the Conversion
Agent;
 
 (iii) if
required, furnish appropriate endorsements and transfer documents;
 
 (iv) if
required, pay any stock transfer, documentary, stamp or similar taxes not
payable by the Corporation pursuant to Section 20; and
 
 (v) if
required as provided in Section 4(d) above, pay funds equal to any declared and
unpaid dividend payable on the next Dividend Payment Date to which such Holder
is entitled.
 
 The date
on which a Holder complies with the procedures in this paragraph (e) is the
“Conversion
Date .”  The Conversion Agent shall, on a Holder’s behalf, convert
the Series A Preferred Stock into shares of Common Stock, in accordance with the
terms of the notice delivered by such Holder described in clause
(i) above.
   
 Exhibit
3.1 – Page 16 --
  Section 8.
Conversion at the Option of the Corporation.
 
 (a) CorporationConversion Right. On or after
December 31, 2013, the Corporation shall have the right, at its option, at any
time or from time to time to cause some or all of the Series A Preferred Stock
to be converted into shares of Common Stock at the then-applicable Conversion
Rate.
 
 (b) Partial Conversion. If the
Corporation elects to cause less than all the shares of the Series A Preferred
Stock to be converted under clause (a) above, the Conversion Agent shall
select the Series A Preferred Stock to be converted on a pro rata basis, by lot
or in such other manner as the Board of Directors or any other duly authorized
committee thereof determines to be fair and equitable. If the Conversion Agent
selects a portion of a Holder’s Series A Preferred Stock for partial conversion
at the option of the Corporation and such Holder converts a portion of its
shares of Series A Preferred Stock, the converted portion will be deemed to be
from the portion selected for conversion at the option of the Corporation under
this Section 8.
 
 (c) Conversion Procedure. In order
to exercise the conversion right described in this Section 8, the
Corporation shall provide notice of such conversion to each Holder (such notice,
a “Notice of
Conversion at the Option of theCorporation ”). The
Conversion Date shall be a date selected by the Corporation (the “Conversion at the Option of
theCorporationDate ”) and shall be
no more than 20 days after the date on which the Corporation provides such
Notice of Conversion at the Option of the Corporation. In addition to any
information required by applicable law or regulation, the Notice of Conversion
at the Option of the Corporation shall state, as appropriate:
 
 (i) the
Conversion at the Option of the Corporation Date;
 
 (ii) the
number of shares of Common Stock to be issued upon conversion of each share of
Series A Preferred Stock; and
 
 (iii) the
number of shares of Series A Preferred Stock to be converted.
 
 Section 9.
Anti-Dilution Adjustments.
 
 (a) Adjustments. The Conversion
Rate will be subject to adjustment, without duplication, under the following
circumstances:
 
 (i) the
issuance of Common Stock as a dividend or distribution to all holders of Common
Stock, or a subdivision or combination of Common Stock, in which event the
Conversion Rate will be adjusted based on the following formula:
  
 Exhibit
3.1 – Page 17 --
 CR1 =
CR0 x
(OS1
/ OS0)
 
 where,
 CR0
              
              =
              
              the
      Conversion Rate in effect at the close of business on the Record
      DateCR1
              
              =
              
              the
      Conversion Rate in effect immediately after the Record
  DateOS0
              
              =
              
              the
      number of shares of Common Stock outstanding at the close of business on
      the Record Date prior to giving effect to such eventOS1
              
              =
              
              the
      number of shares of Common Stock that would be outstanding immediately
      after, and solely as a result of, such
event
 
 Notwithstanding
the foregoing, no adjustment will be made for the issuance of Common Stock as a
dividend or distribution to all holders of Common Stock that is made in lieu of
a quarterly or annual cash dividend or distribution to such holders, to the
extent such dividend or distribution does not exceed (i) $0.24 in any
fiscal quarter in the case of a quarterly dividend or (ii) $0.96 in the prior
twelve months in the case of an annual dividend (each such number, the “Dividend Threshold
Amount ”). The amount of any such dividend or distribution will equal the
number of such shares being issued multiplied by the average of the VWAP of the
Common Stock over each of the five consecutive Trading Days prior to the Ex-date
for such dividend or distribution.
 
 (ii) the
issuance to all holders of Common Stock of certain rights or warrants entitling
them for a period expiring 60 days or less from the date of issuance of
such rights or warrants to purchase shares of Common Stock (or securities
convertible into Common Stock) at less than (or having a conversion price per
share less than) the Current Market Price as of the Record Date, in which event
each Conversion Rate will be adjusted based on the following
formula:
 
 CR1 =
CR0 x
(OS0 +
X) / (OS0 +
Y)
 
 where,
 CR0
              
              =
              
              the
      Conversion Rate in effect at the close of business on the Record
      DateCR1
              
              =
              
              the
      Conversion Rate in effect immediately after the Record
  DateOS0
              
              =
              
              the
      number of shares of Common Stock outstanding at the close of business on
      the Record DateX
              
              =
              
              the
      total number of shares of Common Stock issuable pursuant to such rights
      (or upon conversion of such securities)Y
              
              =
              
              the
      number of shares of Common Stock equal to the aggregate price payable
      to exercise such rights (or the conversion price for such securities paid
      upon conversion) divided by the average of the VWAP of the Common Stock
      over each of the ten consecutive Trading Days prior to the Business
      Day immediately preceding the announcement of the issuance of such
      rights
 
 However,
the Conversion Rate will be readjusted to the extent that any such rights or
warrants are not exercised prior to their expiration.
 
 (iii) the
payment of a dividend or other distribution to all holders of Common Stock of
shares of capital stock of the Corporation (other than common stock) or
evidences of its indebtedness or its assets (excluding any dividend,
distribution or issuance covered by clauses (i) or (ii) above and excluding
cash dividends) in which event the Conversion Rate will be adjusted based on the
following formula:
   Exhibit
3.1 – Page 18 --
 
 CR1 =
CR0 x
SP0 /
(SP0 –
FMV)
 
 where,
 CR0
              
              =
              
              the
      Conversion Rate in effect at the close of business on the Record
      DateCR1
              
              =
              
              the
      Conversion Rate in effect immediately after the Record
  DateSP0
              
              =
              
              the
      Current Market Price as of the Record DateFMV
              
              =
              
              the
      fair market value (as determined by the Board of Directors) on the Record
      Date of the shares of capital stock of the Corporation, evidences of
      indebtedness or assets so distributed, expressed as an amount per share of
      Common Stock
 
 However,
if the transaction that gives rise to an adjustment pursuant to this clause
(iii) is one pursuant to which the payment of a dividend or other
distribution on Common Stock consists of shares of capital stock of the
Corporation of, or similar equity interests in, a subsidiary or other business
unit of ours, (i.e., a spin-off) that are, or, when issued, will be, traded on a
U.S. securities exchange or quoted on the Nasdaq Capital Market, then the
Conversion Rate will instead be adjusted based on the following
formula:
 
 CR1 =
CR0 x
(FMV0
+ MP0)
/ MP0
 
 where,
 
 CR0
              
              =
              
              the
      Conversion Rate in effect at the close of business on the Record
      DateCR1
              
              =
              
              the
      Conversion Rate in effect immediately after the Record
  DateFMV0
              
              =
              
              the
      average of the VWAP of the capital stock of the Corporation or similar
      equity interests distributed to holders of Common Stock applicable to one
      share of Common Stock over each of the 10 consecutive Trading Days
      commencing on and including the third Trading Day after the date on which
      “ex-distribution trading” commences for such dividend or distribution on
      the NYSE or such other national or regional exchange or market on which
      Common Stock is then listed or quotedMP0
              
              =
              
              the
      average of the VWAP of the Common Stock over each of the 10 consecutive
      Trading Days commencing on and including the third Trading Day after the
      date on which “ex-distribution trading” commences for such dividend or
      distribution on the NYSE or such other national or regional exchange or
      market on which Common Stock is then listed or
  quoted
 
 (b) Calculation of Adjustments.
All adjustments to the Conversion Rate shall be calculated by the Corporation to
the nearest 1/10,000th of one share of Common Stock (or if there is not a
nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No
adjustment to the Conversion Rate will be required unless such adjustment would
require an increase or decrease of at least one percent; provided, however, that
any such minor adjustments that are not required to be made will be carried
forward and taken into account in any subsequent adjustment, and provided
further that any such adjustment of less than one percent that has not been made
will be made upon (x) the end of each fiscal year of the Corporation and
(y) any Conversion Date.
   Exhibit
3.1 – Page 19 --
 
 (c) When No Adjustment
Required.
 
 (i)
Except as otherwise provided in this Section 9, the Conversion Rate will
not be adjusted for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock or carrying the right to purchase any of
the foregoing or for the repurchase of Common Stock.
 
 (ii) No
adjustment of the Conversion Rate need be made as a result of: (A) the
issuance of rights; (B) the distribution of separate certificates
representing rights; (C) the exercise or redemption of rights in accordance
with any rights agreement; or (D) the termination or invalidation of
rights, in each case, pursuant to any adopted stockholder rights plans hereafter
adopted by the Corporation; provided, however, that to the extent that the
Corporation has a stockholder rights plan in effect on a Conversion Date
(including the Corporation’s rights plan, if any, existing on the date hereof),
the Holder shall receive, in addition to the shares of Common Stock, the rights
under such rights plan, unless, prior to any such Conversion Date, the rights
have separated from the Common Stock, in which case the Conversion Rate will be
adjusted at the time of separation as if the Corporation made a distribution to
all holders of Common Stock of shares of capital stock of the Corporation or
evidences of its indebtedness or its assets as described in
Section 9.01(a)(iii), subject to readjustment in the event of the
expiration, termination or redemption of the rights.
 
 (iii) No
adjustment to the Conversion Rate need be made:
 
 (A) upon
the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in Common Stock under any plan;
 
 (B) upon
the issuance of any shares of Common Stock or options or rights to purchase
those shares pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Corporation or any of its
subsidiaries; or
 
 (C) upon
the issuance of any shares of Common Stock pursuant to any option, warrant,
right, or exercisable, exchangeable or convertible security outstanding as of
the date the Series A Preferred Stock was first issued.
 
 (iv) No
adjustment to the Conversion Rate need be made for a transaction referred to in
Section 9.01(a)(i), (ii) or (iii) if Holders may participate in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction.
 
 (v) No
adjustment to the Conversion Rate need be made for a change in the par value or
no par value of the Common Stock.
 
 (vi) No
adjustment to the Conversion Rate will be made to the extent that such
adjustment would result in the Conversion Price being less than the par value of
the Common Stock.
   Exhibit
3.1 – Page 20 --
  (vii)
Anything in this Section 9 to the contrary notwithstanding, the Board of
Directors shall have the right to adjust the application of the formulas set
forth above if they determine that the application of any such formula is
contrary to the intent of such formula or to the expectations of holders based
upon the application of similar formulas contained in similar equity investments
of other issuers.
 
 (d) Record Date. For purposes of
this Section 9, “Record Date” means,
with respect to any dividend, distribution or other transaction or event in
which the holders of the Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash, securities
or other property, the date fixed for determination of holders of the Common
Stock entitled to receive such cash, securities or other property (whether such
date is fixed by the Board of Directors or by statute, contract or
otherwise).
 
 (e) Successive Adjustments. After
an adjustment to the Conversion Rate under this Section 9, any subsequent
event requiring an adjustment under this Section 1 shall cause an
adjustment to such Conversion Rate as so adjusted.
 
 (f) Multiple Adjustments. For the
avoidance of doubt, if an event occurs that would trigger an adjustment to the
Conversion Rate pursuant to this Section 9 under more than one subsection
hereof, such event, to the extent fully taken into account in a single
adjustment, shall not result in multiple adjustments hereunder.
 
 (g) Other Adjustments. The
Corporation may, but shall not be required to, make such increases in the
Conversion Rate, in addition to those required by this Section, as the Board of
Directors considers to be advisable in order to avoid or diminish any income tax
to any holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or subscribe
for stock or from any event treated as such for income tax purposes or for any
other reason.
 
 (h) Notice of Adjustments.
Whenever a Conversion Rate is adjusted as provided under Section 9, the
Corporation shall within 10 Business Days following the occurrence of an event
that requires such adjustment (or if the Corporation is not aware of such
occurrence, as soon as reasonably practicable after becoming so aware) or the
date the Corporation makes an adjustment pursuant to
Section 9(g):
 
 (i)
compute the adjusted applicable Conversion Rate in accordance with
Section 9 and prepare and transmit to the Conversion Agent an Officers’
Certificate setting forth the applicable Conversion Rate, as the case may be,
the method of calculation thereof in reasonable detail, and the facts requiring
such adjustment and upon which such adjustment is based; and
 
 (ii)
provide a written notice to the Holders of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the adjustment
to the applicable Conversion Rate was determined and setting forth the adjusted
applicable Conversion Rate.
   Exhibit
3.1 – Page 21 --
 
 (i) Conversion Agent. The
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder to determine whether any facts exist that may require any adjustment
of the applicable Conversion Rate or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Conversion Agent shall be fully authorized and
protected in relying on any Officers’ Certificate delivered pursuant to
Section 9(h) and any adjustment contained therein and the Conversion Agent
shall not be deemed to have knowledge of any adjustment unless and until it has
received such certificate. The Conversion Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, that may at the time be issued or
delivered with respect to any Series A Preferred Stock; and the Conversion Agent
makes no representation with respect thereto. The Conversion Agent shall not be
responsible for any failure of the Corporation to issue, transfer or deliver any
shares of Common Stock pursuant to the conversion of Series A Preferred Stock or
to comply with any of the duties, responsibilities or covenants of the
Corporation contained in this Section 9.
 
 (j) Fractional Shares. No
fractional shares of Common Stock will be issued to holders of the Series A
Preferred Stock upon conversion. In lieu of fractional shares otherwise
issuable, holders will be entitled to receive an amount in cash equal to the
fraction of a share of Common Stock, calculated on an aggregate basis in respect
of the shares of Series A Preferred Stock being converted, multiplied by the
Closing Price of the Common Stock on the Trading Day immediately preceding the
applicable Conversion Date.
 
 Section 10.
Adjustment for Reorganization Events.
 
 (a) Reorganization Events. In the
event of:
 
 (1) any
consolidation or merger of the Corporation with or into another person (other
than a merger or consolidation in which the Corporation is the continuing
corporation and in which the shares of Common Stock outstanding immediately
prior to the merger or consolidation are not exchanged for cash, securities or
other property of the Corporation or another corporation);
 
 (2) any
sale, transfer, lease or conveyance to another person of all or substantially
all the property and assets of the Corporation; or
 
 (3) any
statutory exchange of securities of the Corporation with another Person (other
than in connection with a merger or acquisition) or any binding share exchange
which reclassifies or changes its outstanding Common Stock;
 
 each of
which is referred to as a “Reorganization
Event,” each share of the Series A Preferred Stock outstanding
immediately prior to such Reorganization Event will, without the consent of the
holders of the Series A Preferred Stock, become convertible into the kind and
amount of securities, cash and other property (the “Exchange Property ”)
receivable in such Reorganization Event (without any interest thereon, and
without any right to dividends or distribution thereon which have a record date
that is prior to the applicable Conversion Date) per share of Common Stock by a
holder of Common Stock that is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (any
such Person, a “Constituent Person ”), or an Affiliate of a Constituent Person to the
extent such Reorganization Event provides for different treatment of Common
Stock held by Affiliates of the Corporation and non-Affiliates;provided  that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by a Person other than a
Constituent Person or an Affiliate thereof, then for the purpose of this
Section 10(a), the kind and amount of securities, cash and other property
receivable upon such Reorganization Event will be deemed to be the weighted
average of the types and amounts of consideration received by the holders of
Common Stock that affirmatively make an election (or of all such holders if none
make an election). On each Conversion Date following a Reorganization Event, the
Conversion Rate then in effect will be applied to the value on such Conversion
Date of such securities, cash or other property received per share of Common
Stock, as determined in accordance with this Section 10.
   Exhibit
3.1 – Page 22 --
 
 (b) Exchange Property Election. In
the event that holders of the shares of Common Stock have the opportunity to
elect the form of consideration to be received in such transaction, the
consideration that the Holders are entitled to receive shall be deemed to be the
types and amounts of consideration received by the holders of the shares of
Common Stock that affirmatively make an election (or of all such holders if none
make an election). The amount of
 Exchange
Property receivable upon conversion of any Series A Preferred Stock in
accordance with the terms hereof shall be determined based upon the Conversion
Rate in effect on such Conversion Date.
 
 (c) Successive Reorganization
Events. The above provisions of this Section 10 shall similarly
apply to successive Reorganization Events and the provisions of Section 9
shall apply to any shares of capital stock of the Corporation (or any successor)
received by the holders of the Common Stock in any such Reorganization
Event.
 
 (d) Reorganization Event Notice.
The Corporation (or any successor) shall, within 20 days of the occurrence
of any Reorganization Event, provide written notice to the Holders of such
occurrence of such event and of the kind and amount of the cash, securities or
other property that constitutes the Exchange Property. Failure to deliver such
notice shall not affect the operation of this Section 10.
 
 Section 11.
Voting Rights.
 
 The
Holders shall not be entitled to vote on any matter except as specifically set
forth in Maryland law.
 
 Section 12.
Preemption.
 
 The
Holders shall not have any rights of preemption.
 
 Section 13.
Rank.
 
 Notwithstanding
anything set forth in the Articles of Incorporation or these Articles of
Amendment to the contrary, the Board of Directors or any duly authorized
committee thereof, without the vote of the Holders, may authorize and issue
additional shares of Senior Stock, Junior Stock or Parity Stock.
  
 Exhibit
3.1 – Page 23 --
 Section 14.
Repurchase.
 
 Subject
to the limitations imposed herein, the Corporation may purchase and sell Series
A Preferred Stock from time to time to such extent, in such manner, and upon
such terms as the Board of Directors or any other duly authorized committee
thereof may determine; provided, however, that the Corporation shall not use any
of its funds for any such purchase when there are reasonable grounds to believe
that the Corporation is, or by such purchase would be, rendered
insolvent. Notwithstanding anything set forth in the Articles of
Incorporation or these Articles of Amendment to the contrary, the
Corporation shall have no obligation to repurchase or redeem the Series A
Preferred Stock.
 
 Section 15.
Unissued or Reacquired Shares.
 
 Shares of
Series A Preferred Stock not issued or which have been issued and converted,
redeemed or otherwise purchased or acquired by the Corporation shall be restored
to the status of authorized but unissued shares of preferred stock without
designation as to series.
 
 Section 16.
No Sinking Fund.
 
 Shares of
Series A Preferred Stock are not subject to the operation of a sinking
fund.
 
 Section 17.
Reservation of Common Stock.
 
 (a) Sufficient Shares. The
Corporation shall at all times reserve and keep available out of its authorized
and unissued Common Stock or shares acquired by the Corporation, solely for
issuance upon the conversion of shares of Series A Preferred Stock as provided
in these Articles of Amendment, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of Series A Preferred Stock then
outstanding. For purposes of this Section 17(a), the number of shares of
Common Stock that shall be deliverable upon the conversion of all outstanding
shares of Series A Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single
Holder.
 
 (b) Use of Acquired Shares.
Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon
conversion of shares of Series A Preferred Stock, as herein provided, shares of
Common Stock acquired by the Corporation (in lieu of the issuance of authorized
and unissued shares of Common Stock), so long as any such acquired shares are
free and clear of all liens, charges, security interests or encumbrances (other
than liens, charges, security interests and other encumbrances created by the
Holders).
 
 (c) Free and Clear Delivery. All
shares of Common Stock delivered upon conversion of the Series A Preferred Stock
shall be duly authorized, validly issued, fully paid and non-assessable, free
and clear of all liens, claims, security interests and other encumbrances (other
than liens, charges, security interests and other encumbrances created by the
Holders).
   Exhibit
3.1 – Page 24 --
 
 (d) Compliance with Law. Prior to
the delivery of any securities that the Corporation shall be obligated to
deliver upon conversion of the Series A Preferred Stock, the Corporation shall
use its reasonable best efforts to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
 
 (e) Listing. The Corporation
hereby covenants and agrees that, if at any time the Common Stock shall be
listed on the Nasdaq Capital Market or any other national securities exchange or
automated quotation system, the Corporation will, if permitted by the rules of
such exchange or automated quotation system, list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated quotation
system, all the Common Stock issuable upon conversion of the Series A Preferred
Stock; provided, however, that if the rules of such exchange or automated
quotation system require the Corporation to defer the listing of such Common
Stock until the first conversion of Series A Preferred Stock into Common Stock
in accordance with the provisions hereof, the Corporation covenants to list such
Common Stock issuable upon conversion of the Series A Preferred Stock in
accordance with the requirements of such exchange or automated quotation system
at such time.
 
 Section 18.
Transfer Agent, Conversion Agent, Registrar and Paying Agent.
 
 The duly
appointed Transfer Agent, Conversion Agent, Registrar and paying agent for the
Series A Preferred Stock shall be the Corporation. The Corporation may, in its
sole discretion, remove the Transfer Agent in accordance with the agreement
between the Corporation and the Transfer Agent; provided that the Corporation
shall appoint a successor transfer agent who shall accept such appointment prior
to the effectiveness of such removal. Upon any such removal or appointment, the
Corporation shall send notice thereof by first-class mail, postage prepaid, to
the Holders.
 
 Section 19.
Replacement Certificates.
 
 (a) Mutilated, Destroyed, Stolen and Lost
Certificates. If physical certificates are issued, the Corporation shall
replace any mutilated certificate at the Holder’s expense upon surrender of that
certificate to the Transfer Agent. The Corporation shall replace certificates
that become destroyed, stolen or lost at the Holder’s expense upon delivery to
the Corporation and the Transfer Agent of satisfactory evidence that the
certificate has been destroyed, stolen or lost, together with any indemnity that
may be required by the Transfer Agent and the Corporation.
 
 (b) Certificates Following
Conversion. If physical certificates are issued, the Corporation shall
not be required to issue any certificates representing the Series A Preferred
Stock on or after the applicable Conversion Date. In place of the delivery of a
replacement certificate following the applicable Conversion Date, the Transfer
Agent, upon delivery of the evidence and indemnity described in clause
(a) above, shall deliver the shares of Common Stock pursuant to the terms
of the Series A Preferred Stock formerly evidenced by the
certificate.
   Exhibit
3.1 – Page 25 --
 
 Section 20.
Taxes.
 
 (a) Transfer Taxes. The
Corporation shall pay any and all stock transfer, documentary, stamp and similar
taxes that may be payable in respect of any issuance or delivery of shares of
Series A Preferred Stock or shares of Common Stock or other securities issued on
account of Series A Preferred Stock pursuant hereto or certificates representing
such shares or securities. The Corporation shall not, however, be required to
pay any such tax that may be payable in respect of any transfer involved in the
issuance or delivery of shares of Series A Preferred Stock, shares of Common
Stock or other securities in a name other than that in which the shares of
Series A Preferred Stock with respect to which such shares or other securities
are issued or delivered were registered, or in respect of any payment to any
Person other than a payment to the registered holder thereof, and shall not be
required to make any such issuance, delivery or payment unless and until the
Person otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid or is not payable.
 
 (b) Withholding. All payments and
distributions (or deemed distributions) on the shares of Series A Preferred
Stock (and on the shares of Common Stock received upon their conversion) shall
be subject to withholding and backup withholding of tax to the extent required
by law, subject to applicable exemptions, and amounts withheld, if any, shall be
treated as received by Holders.
 
 Section 21.
Notices.
 
 All
notices referred to herein shall be in writing, and, unless otherwise specified
herein, all notices hereunder shall be deemed to have been given upon the
earlier of receipt thereof or three Business Days after the mailing thereof if
sent by registered or certified mail (unless first class mail shall be
specifically permitted for such notice under the terms of these Articles of
Amendment) with postage prepaid, addressed: (i) if to the Corporation, to
its office at 200 Westgate Circle, Annapolis, Maryland  21401
(Attention: Corporate Secretary), or other agent of the Corporation designated
as permitted by these Articles of Amendment, or (ii) if to any Holder, to
such Holder at the address of such Holder as listed in the stock record books of
the Corporation (which may include the records of the Transfer Agent) or
(iii) to such other address as the Corporation or any such Holder, as the
case may be, shall have designated by notice similarly given.
   Exhibit
3.1 – Page 26 --





ARTICLES
SUPPLEMENTARY


TO
THE


ARTICLES
OF INCORPORATION


OF


SEVERN
BANCORP, INC.





WHEREAS, by the Articles of
Incorporation, as amended (the“Articles of
Incorporation”), of Severn Bancorp, Inc. (the“Corporation”
), 1,000,000 shares of serial preferred stock, with $0.01 par value per share
(the“Preferred
Stock” ) are authorized; and





WHEREAS, in and by
Article V of the Articles of Incorporation, the Board of Directors of the
Corporation (the“Board of Directors” ), pursuant to Section 2-208 of the Maryland
General Corporation Law, is expressly authorized, by resolution or resolutions
from time to time adopted, to provide for the issuance of Preferred Stock in
series and to fix and state the powers, designations, preferences, and relative,
participating, optional or other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof; and:





WHEREAS, the Board of
Directors or an applicable committee of the Board of Directors, in accordance
with the Articles of Incorporation and bylaws of the Corporation and applicable
law, adopted the following resolution on November 18, 2008 creating a
series of 23,393 shares of Preferred Stock of the Corporation designated as“Fixed Rate
Cumulative Perpetual Preferred Stock, Series B” .





RESOLVED, that pursuant to the
provisions of the Articles of Incorporation and the bylaws of the Corporation
and applicable law, a series of Preferred Stock, par value $0.01 per share, of
the Corporation be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof, of the shares of such series, are as
follows:





Part 1.Designation and Number of
Shares. There is hereby created out of the authorized and unissued shares
of preferred stock of the Corporation a series of preferred stock designated as
the “Fixed Rate Cumulative Perpetual Preferred Stock, Series B” (the“Designated
Preferred Stock” ). The authorized number of shares of Designated
Preferred Stock shall be 23,393.





Part 2.Standard Provisions.
The Standard Provisions contained in Annex A attached hereto are incorporated
herein by reference in their entirety and shall be deemed to be a part of this
Certificate of Designations to the same extent as if such provisions had been
set forth in full herein.




Part
3.Definitions.
The following terms are used in this Certificate of Designations (including the
Standard Provisions in Annex A hereto) as defined below:





(a) “Common Stock” means
the common stock, par value $0.01 per share, of the Corporation.





(b) “Dividend Payment
Date” means February 15, May 15, August 15 and
November 15 of each year.





(c) “Junior Stock” means
the Common Stock, and any other class or series of stock of the Corporation the
terms of which expressly provide that it ranks junior to Designated Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Corporation.





(d)“Liquidation Amount”
means $1,000 per share of Designated Preferred Stock.





(e)“Minimum Amount”
means $5,848,250.









Exhibit
3.1 -- Page 27 --






(f) “Parity Stock” means
any class or series of stock of the Corporation (other than Designated Preferred
Stock) the terms of which do not expressly provide that such class or series
will rank senior or junior to Designated Preferred Stock as to dividend rights
and/or as to rights on liquidation, dissolution or winding up of the Corporation
(in each case without regard to whether dividends accrue cumulatively or
non-cumulatively). Without limiting the foregoing, Parity Stock shall include
the Corporation’s Series A 8.0% Non-Cumulative Convertible Preferred
Stock.





(g)“Signing Date” means
Original Issue Date.





Part
4.Certain Voting
Matters. Holders of shares of Designated Preferred Stock will be entitled
to one vote for each such share on any matter on which holders of Designated
Preferred Stock are entitled to vote, including any action by written
consent.





[Remainder
of Page Intentionally Left Blank]



















Exhibit
3.1 – Page 28 --















IN
WITNESS WHEREOF, this instrument has been executed and acknowledged for the
Corporation by Alan J. Hyatt, its President, and attested to by its Secretary,
S. Scott Kirkley, under penalties of perjury, on the 19th  day of November, 2008.


ATTEST:
            
            
            
            SEVERN
      BANCORP, INC.By:
            
            /s/
      S. Scott Kirkley
              S. Scott Kirkley, Secretary
            
            
            
            By:
            
            /s/
      Alan J. Hyatt
              Alan
      J. Hyatt, President



















Exhibit
3.1 – Page 29 --










ANNEX
A


STANDARD
PROVISIONS


Section 1.General Matters.
Each share of Designated Preferred Stock shall be identical in all respects to
every other share of Designated Preferred Stock. The Designated Preferred Stock
shall be perpetual, subject to the provisions of Section 5 of these
Standard Provisions that form a part of the Certificate of Designations. The
Designated Preferred Stock shall rank equally with Parity Stock and shall rank
senior to Junior Stock with respect to the payment of dividends and the
distribution of assets in the event of any dissolution, liquidation or winding
up of the Corporation.





Section 2.Standard
Definitions. As used herein with respect to Designated Preferred
Stock:





(a) “Applicable Dividend
Rate” means (i) during the period from the Original Issue Date to,
but excluding, the first day of the first Dividend Period commencing on or after
the fifth anniversary of the Original Issue Date, 5% per annum and
(ii) from and after the first day of the first Dividend Period commencing
on or after the fifth anniversary of the Original Issue Date, 9% per
annum.





(b) “Appropriate Federal Banking
Agency” means the “appropriate Federal banking agency” with respect to
the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act
(12 U.S.C. Section 1813(q)), or any successor provision.





(c) “Business Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Corporation’s stockholders.





(d) “Business Day” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.





(e)
“Bylaws” means
the bylaws of the Corporation, as they may be amended from time to
time.





(f) “Certificate of
Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.





(g) “Charter” means the
Corporation’s certificate or articles of incorporation, articles of association,
or similar organizational document.





(h) “Dividend Period” has
the meaning set forth in Section 3(a).





(i) “Dividend Record Date”
has the meaning set forth in Section 3(a).





(j) “Liquidation
Preference” has the meaning set forth in Section 4(a).










A-1





Exhibit
3.1 – Page 30 --










(k) “Original Issue Date”
means the date on which shares of Designated Preferred Stock are first
issued.





(l) “Preferred Director”
has the meaning set forth in Section 7(b).





(m)
“Preferred
Stock” means any and all series of preferred stock of the Corporation,
including the Designated Preferred Stock.





(n) “Qualified Equity
Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the Original
Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included in
Tier 1 capital of the Corporation at the time of issuance under the applicable
risk-based capital guidelines of the Corporation’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008).





(o) “Share Dilution
Amount” has the meaning set forth in Section 3(b).





(p)
“Standard
Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred
Stock.





(q) “Successor Preferred
Stock” has the meaning set forth in Section 5(a).





(r)
“Voting Parity
Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in
Sections 7(a) and 7(b) of these Standard Provisions that form a part of the
Certificate of Designations, any and all series of Parity Stock upon which like
voting rights have been conferred and are exercisable with respect to such
matter.





Section 3.Dividends.





(a) Rate. Holders of
Designated Preferred Stock shall be entitled to receive, on each share of
Designated Preferred Stock if, as and when declared by the Board of Directors or
any duly authorized committee of the Board of Directors, but only out of assets
legally available therefor, cumulative cash dividends with respect to each
Dividend Period (as defined below) at a rate per annum equal to the Applicable
Dividend Rate on (i) the Liquidation Amount per share of Designated
Preferred Stock and (ii) the amount of accrued and unpaid dividends for any
prior Dividend Period on such share of Designated Preferred Stock, if any. Such
dividends shall begin to accrue and be cumulative from the Original Issue Date,
shall compound on each subsequent Dividend Payment Date (i.e. , no dividends shall
accrue on other dividends unless and until the first Dividend Payment Date for
such other dividends has passed without such other dividends having been paid on
such date) and shall be payable quarterly in arrears on each Dividend Payment
Date, commencing with the first such Dividend Payment Date to occur at least 20
calendar days after the Original Issue Date. In the event that any Dividend
Payment Date would otherwise fall on a day that is not a Business Day, the
dividend payment due on that date will be postponed to the next day that is a
Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date to, but
excluding, the next Dividend Payment Date is a “Dividend Period ”,
provided that the initial Dividend Period shall be the period from and including
the Original Issue Date to, but excluding, the next Dividend Payment
Date.










A-2












Exhibit
3.1 -- Page 31 --







Dividends
that are payable on Designated Preferred Stock in respect of any Dividend Period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The amount of dividends payable on Designated Preferred Stock on any
date prior to the end of a Dividend Period, and for the initial Dividend Period,
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months, and actual days elapsed over a 30-day month.





Dividends
that are payable on Designated Preferred Stock on any Dividend Payment Date will
be payable to holders of record of Designated Preferred Stock as they appear on
the stock register of the Corporation on the applicable record date, which shall
be the 15th calendar day immediately preceding such Dividend Payment Date or
such other record date fixed by the Board of Directors or any duly authorized
committee of the Board of Directors that is not more than 60 nor less than 10
days prior to such Dividend Payment Date (each, a “Dividend Record Date
”). Any such day that is a Dividend Record Date shall be a Dividend Record Date
whether or not such day is a Business Day.





Holders
of Designated Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Designated Preferred Stock as specified in this
Section 3 (subject to the other provisions of the Certificate of
Designations).





(b) Priority of
Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the Common
Stock or any other shares of Junior Stock (other than dividends payable solely
in shares of Common Stock) or Parity Stock, subject to the immediately following
paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or
Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise
acquired for consideration by the Corporation or any of its subsidiaries unless
all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been or are contemporaneously declared and paid
in full (or have been declared and a sum sufficient for the payment thereof has
been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date). The foregoing limitation shall not apply
to (i) redemptions, purchases or other acquisitions of shares of Common
Stock or other Junior Stock in connection with the administration of any
employee benefit plan in the ordinary course of business (including purchases to
offset the Share Dilution Amount (as defined below) pursuant to a publicly
announced repurchase plan) and consistent with past practice,provided  that
any purchases to offset the Share Dilution Amount shall in no event exceed the
Share Dilution Amount; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation solely for the purpose of
market-making, stabilization or customer facilitation transactions in Junior
Stock or Parity Stock in the ordinary course of its business;
(iii) purchases by a broker-dealer subsidiary of the Corporation of capital
stock of the Corporation for resale pursuant to an offering by the Corporation
of such capital stock underwritten by such broker-dealer subsidiary;
(iv) any dividends or distributions of rights or Junior Stock in connection
with a










A-3





Exhibit
3.1 – Page 32 --










stockholders’
rights plan or any redemption or repurchase of rights pursuant to any
stockholders’ rights plan; (v) the acquisition by the Corporation or any of
its subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Corporation or any of
its subsidiaries), including as trustees or custodians; and (vi) the
exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock for or into other Parity Stock (with the same or lesser aggregate
liquidation amount) or Junior Stock, in each case, solely to the extent required
pursuant to binding contractual agreements entered into prior to the Signing
Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock. “Share Dilution
Amount ” means the increase in the number of diluted shares outstanding
(determined in accordance with generally accepted accounting principles in the
United States, and as measured from the date of the Corporation’s consolidated
financial statements most recently filed with the Securities and Exchange
Commission prior to the Original Issue Date) resulting from the grant, vesting
or exercise of equity-based compensation to employees and equitably adjusted for
any stock split, stock dividend, reverse stock split, reclassification or
similar transaction.





When
dividends are not paid (or declared and a sum sufficient for payment thereof set
aside for the benefit of the holders thereof on the applicable record date) on
any Dividend Payment Date (or, in the case of Parity Stock having dividend
payment dates different from the Dividend Payment Dates, on a dividend payment
date falling within a Dividend Period related to such Dividend Payment Date) in
full upon Designated Preferred Stock and any shares of Parity Stock, all
dividends declared on Designated Preferred Stock and all such Parity Stock and
payable on such Dividend Payment Date (or, in the case of Parity Stock having
dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment
Date) shall be declaredpro
rata  so that the respective amounts of such dividends declared
shall bear the same ratio to each other as all accrued and unpaid dividends per
share on the shares of Designated Preferred Stock (including, if applicable as
provided in Section 3(a) above, dividends on such amount) and all Parity Stock
payable on such Dividend Payment Date (or, in the case of Parity Stock having
dividend payment dates different from the Dividend Payment Dates, on a dividend
payment date falling within the Dividend Period related to such Dividend Payment
Date) (subject to their having been declared by the Board of Directors or a duly
authorized committee of the Board of Directors out of legally available funds
and including, in the case of Parity Stock that bears cumulative dividends, all
accrued but unpaid dividends) bear to each other. If the Board of Directors or a
duly authorized committee of the Board of Directors determines not to pay any
dividend or a full dividend on a Dividend Payment Date, the Corporation will
provide written notice to the holders of Designated Preferred Stock prior to
such Dividend Payment Date.





Subject
to the foregoing, and not otherwise, such dividends (payable in cash, securities
or other property) as may be determined by the Board of Directors or any duly
authorized committee of the Board of Directors may be declared and paid on any
securities, including Common Stock and other Junior Stock, from time to time out
of any funds legally available for such payment, and holders of Designated
Preferred Stock shall not be entitled to participate in any such
dividends.










A-4





Exhibit
3.1 – Page 33 --










Section 4.Liquidation
Rights.





(a) Voluntary or Involuntary
Liquidation. In the event of any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or involuntary, holders of
Designated Preferred Stock shall be entitled to receive for each share of
Designated Preferred Stock, out of the assets of the Corporation or proceeds
thereof (whether capital or surplus) available for distribution to stockholders
of the Corporation, subject to the rights of any creditors of the Corporation,
before any distribution of such assets or proceeds is made to or set aside for
the holders of Common Stock and any other stock of the Corporation ranking
junior to Designated Preferred Stock as to such distribution, payment in full in
an amount equal to the sum of (i) the Liquidation Amount per share and
(ii) the amount of any accrued and unpaid dividends (including, if
applicable as provided in Section 3(a) above, dividends on such amount), whether
or not declared, to the date of payment (such amounts collectively, the “Liquidation
Preference ”).





(b) Partial Payment. If
in any distribution described in Section 4(a) above the assets of the
Corporation or proceeds thereof are not sufficient to pay in full the amounts
payable with respect to all outstanding shares of Designated Preferred Stock and
the corresponding amounts payable with respect of any other stock of the
Corporation ranking equally with Designated Preferred Stock as to such
distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.





(c) Residual
Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable with
respect of any other stock of the Corporation ranking equally with Designated
Preferred Stock as to such distribution has been paid in full, the holders of
other stock of the Corporation shall be entitled to receive all remaining assets
of the Corporation (or proceeds thereof) according to their respective rights
and preferences.





(d) Merger, Consolidation andSaleof Assets Not
Liquidation. For purposes of this Section 4, the merger or
consolidation of the Corporation with any other corporation or other entity,
including a merger or consolidation in which the holders of Designated Preferred
Stock receive cash, securities or other property for their shares, or the sale,
lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.





Section 5.Redemption.





(a) Optional Redemption.
Except as provided below, the Designated Preferred Stock may not be redeemed
prior to the first Dividend Payment Date falling on or after the third
anniversary of the Original Issue Date. On or after the first Dividend Payment
Date falling on or after the third anniversary of the Original Issue Date, the
Corporation, at its option, subject to the approval of the Appropriate Federal
Banking Agency, may redeem, in whole or in part, at any time and from time to
time, out of funds legally available therefor, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below,
any accrued and unpaid dividends (including, if applicable as provided in
Section 3(a) above, dividends on such amount) (regardless of whether any
dividends are actually declared) to, but excluding, the date fixed for
redemption.










A-5





Exhibit
3.1 – Page 34 --










Notwithstanding
the foregoing, prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Corporation, at its option,
subject to the approval of the Appropriate Federal Banking Agency, may redeem,
in whole or in part, at any time and from time to time, the shares of Designated
Preferred Stock at the time outstanding, upon notice given as provided in
Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below,
any accrued and unpaid dividends (including, if applicable as provided in
Section 3(a) above, dividends on such amount) (regardless of whether any
dividends are actually declared) to, but excluding, the date fixed for
redemption;provided  that
(x) the Corporation (or any successor by Business Combination) has received
aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum
Amount” as defined in the relevant certificate of designations for each other
outstanding series of preferred stock of such successor that was originally
issued to the United States Department of the Treasury (the “Successor Preferred
Stock ”) in connection with the Troubled Asset Relief Program Capital
Purchase Program) from one or more Qualified Equity Offerings (including
Qualified Equity Offerings of such successor), and (y) the aggregate
redemption price of the Designated Preferred Stock (and any Successor Preferred
Stock) redeemed pursuant to this paragraph may not exceed the aggregate net cash
proceeds received by the Corporation (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of
such successor).





The
redemption price for any shares of Designated Preferred Stock shall be payable
on the redemption date to the holder of such shares against surrender of the
certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends payable on a redemption date that occurs
subsequent to the Dividend Record Date for a Dividend Period shall not be paid
to the holder entitled to receive the redemption price on the redemption date,
but rather shall be paid to the holder of record of the redeemed shares on such
Dividend Record Date relating to the Dividend Payment Date as provided in
Section 3 above.





(b) No Sinking Fund. The
Designated Preferred Stock will not be subject to any mandatory redemption,
sinking fund or other similar provisions. Holders of Designated Preferred Stock
will have no right to require redemption or repurchase of any shares of
Designated Preferred Stock.





(c) Notice of Redemption.
Notice of every redemption of shares of Designated Preferred Stock shall be
given by first class mail, postage prepaid, addressed to the holders of record
of the shares to be redeemed at their respective last addresses appearing on the
books of the Corporation. Such mailing shall be at least 30 days and not
more than 60 days before the date fixed for redemption. Any notice mailed
as provided in this Subsection shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice, but failure duly to give
such notice by mail, or any defect in such notice or in the mailing thereof, to
any holder of shares of Designated Preferred Stock designated for redemption
shall not affect the validity of the proceedings for the redemption of any other
shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares
of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Corporation or any other similar facility, notice of redemption
may be given to the holders of Designated Preferred Stock at such time and in
any manner permitted by such facility. Each notice of redemption given to a
holder shall state: (1) the redemption date; (2) the number of shares
of Designated Preferred Stock to be redeemed and, if less than all the shares
held by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; and (4) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price.










A-6





Exhibit
3.1 – Page 35 --










(d) Partial Redemption.
In case of any redemption of part of the shares of Designated Preferred Stock at
the time outstanding, the shares to be redeemed shall be selected eitherpro
rata  or in such other manner as the Board of Directors or a
duly authorized committee thereof may determine to be fair and equitable.
Subject to the provisions hereof, the Board of Directors or a duly authorized
committee thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed
from time to time. If fewer than all the shares represented by any certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof.





(e) Effectiveness of
Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the
redemption have been deposited by the Corporation, in trust for thepro
rata  benefit of the holders of the shares called for
redemption, with a bank or trust company doing business in the Borough of
Manhattan, The City of New York, and having a capital and surplus of at least
$500 million and selected by the Board of Directors, so as to be and
continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for
cancellation, on and after the redemption date dividends shall cease to accrue
on all shares so called for redemption, all shares so called for redemption
shall no longer be deemed outstanding and all rights with respect to such shares
shall forthwith on such redemption date cease and terminate, except only the
right of the holders thereof to receive the amount payable on such redemption
from such bank or trust company, without interest. Any funds unclaimed at the
end of three years from the redemption date shall, to the extent permitted by
law, be released to the Corporation, after which time the holders of the shares
so called for redemption shall look only to the Corporation for payment of the
redemption price of such shares.





(f) Status of Redeemed
Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Corporation shall revert to authorized
but unissued shares of Preferred Stock (provided  that any
such cancelled shares of Designated Preferred Stock may be reissued only as
shares of any series of Preferred Stock other than Designated Preferred
Stock).





Section 6.Conversion. Holders
of Designated Preferred Stock shares shall have no right to exchange or convert
such shares into any other securities.










A-7





Exhibit
3.1 – Page 36 --










Section 7.Voting
Rights.





(a) General. The holders
of Designated Preferred Stock shall not have any voting rights except as set
forth below or as otherwise from time to time required by law.





(b) Preferred Stock
Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the“Preferred
Directors”  and each a“Preferred
Director” ) to
fill such newly created directorships at the Corporation’s next annual meeting
of stockholders (or at a special meeting called for that purpose prior to such
next annual meeting) and at each subsequent annual meeting of stockholders until
all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in
Section 3(a) above, dividends on such amount), on all outstanding shares of
Designated Preferred Stock have been declared and paid in full at which time
such right shall terminate with respect to the Designated Preferred Stock,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent default of the character above mentioned;provided  that
it shall be a qualification for election for any Preferred Director that the
election of such Preferred Director shall not cause the Corporation to violate
any corporate governance requirements of any securities exchange or other
trading facility on which securities of the Corporation may then be listed or
traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the right of the holders of shares of
Designated Preferred Stock and Voting Parity Stock as a class to vote for
directors as provided above, the Preferred Directors shall cease to be qualified
as directors, the term of office of all Preferred Directors then in office shall
terminate immediately and the authorized number of directors shall be reduced by
the number of Preferred Directors elected pursuant hereto. Any Preferred
Director may be removed at any time, with or without cause, and any vacancy
created thereby may be filled, only by the affirmative vote of the holders a
majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting
Parity Stock, to the extent the voting rights of such holders described above
are then exercisable. If the office of any Preferred Director becomes vacant for
any reason other than removal from office as aforesaid, the remaining Preferred
Director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.





(c) Class Voting Rights as
to Particular Matters. So long as any shares of Designated Preferred
Stock are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Charter, the vote or consent of the holders of at
least 66 2/3% of the shares of Designated Preferred Stock at the time
outstanding, voting as a separate class, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for the purpose,
shall be necessary for effecting or validating:





(i)Authorization of Senior
Stock. Any amendment or alteration of the Certificate of Designations for
the Designated Preferred Stock or the Charter to authorize or create or increase
the authorized amount of, or any issuance of, any shares of, or any securities
convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Corporation ranking senior to Designated
Preferred Stock with respect to either or both the payment of dividends and/or
the distribution of assets on any liquidation, dissolution or winding up of the
Corporation;










A-8





Exhibit
3.1 – Page 37 --










(ii)Amendment of Designated
Preferred Stock. Any amendment, alteration or repeal of any provision of
the Certificate of Designations for the Designated Preferred Stock or the
Charter (including, unless no vote on such merger or consolidation is required
by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a
merger, consolidation or otherwise) so as to adversely affect the rights,
preferences, privileges or voting powers of the Designated Preferred Stock;
or





(iii)Share Exchanges,
Reclassifications, Mergers and Consolidations. Any consummation of a
binding share exchange or reclassification involving the Designated Preferred
Stock, or of a merger or consolidation of the Corporation with another
corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such merger
or consolidation with respect to which the Corporation is not the surviving or
resulting entity, are converted into or exchanged for preference securities of
the surviving or resulting entity or its ultimate parent, and (y) such
shares remaining outstanding or such preference securities, as the case may be,
have such rights, preferences, privileges and voting powers, and limitations and
restrictions thereof, taken as a whole, as are not materially less favorable to
the holders thereof than the rights, preferences, privileges and voting powers,
and limitations and restrictions thereof, of Designated Preferred Stock
immediately prior to such consummation, taken as a whole;





provided,however, that for all
purposes of this Section 7(c), any increase in the amount of the authorized
Preferred Stock, including any increase in the authorized amount of Designated
Preferred Stock necessary to satisfy preemptive or similar rights granted by the
Corporation to other persons prior to the Signing Date, or the creation and
issuance, or an increase in the authorized or issued amount, whether pursuant to
preemptive or similar rights or otherwise, of any other series of Preferred
Stock, or any securities convertible into or exchangeable or exercisable for any
other series of Preferred Stock, ranking equally with and/or junior to
Designated Preferred Stock with respect to the payment of dividends (whether
such dividends are cumulative or non-cumulative) and the distribution of assets
upon liquidation, dissolution or winding up of the Corporation will not be
deemed to adversely affect the rights, preferences, privileges or voting powers,
and shall not require the affirmative vote or consent of, the holders of
outstanding shares of the Designated Preferred Stock.





(d) Changes after Provision for
Redemption. No vote or consent of the holders of Designated Preferred
Stock shall be required pursuant to Section 7(c) above if, at or prior to the
time when any such vote or consent would otherwise be required pursuant to such
Section, all outstanding shares of the Designated Preferred Stock shall have
been redeemed, or shall have been called for redemption upon proper notice and
sufficient funds shall have been deposited in trust for such redemption, in each
case pursuant to Section 5 above.





(e) Procedures for Voting and
Consents. The rules and procedures for calling and conducting any meeting
of the holders of Designated Preferred Stock (including, without limitation, the
fixing of a record date in connection therewith), the solicitation and use of
proxies at such a meeting, the obtaining of written consents and any other
aspect or matter with regard to such a meeting or such consents shall be
governed by any rules of the Board of Directors or any duly authorized committee
of the Board of Directors, in its discretion, may adopt from time to time, which
rules and procedures shall conform to the requirements of the Charter, the
Bylaws, and applicable law and the rules of any national securities exchange or
other trading facility on which Designated Preferred Stock is listed or traded
at the time.










A-9





Exhibit
3.1 – Page 38 --










Section 8.Record Holders. To
the fullest extent permitted by applicable law, the Corporation and the transfer
agent for Designated Preferred Stock may deem and treat the record holder of any
share of Designated Preferred Stock as the true and lawful owner thereof for all
purposes, and neither the Corporation nor such transfer agent shall be affected
by any notice to the contrary.





Section 9.Notices. All notices
or communications in respect of Designated Preferred Stock shall be sufficiently
given if given in writing and delivered in person or by first class mail,
postage prepaid, or if given in such other manner as may be permitted in this
Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any
similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.





Section 10.No Preemptive
Rights. No share of Designated Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the Corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such
securities, or such warrants, rights or options, may be designated, issued or
granted.





Section 11.Replacement
Certificates. The Corporation shall replace any mutilated certificate at
the holder’s expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at
the holder’s expense upon delivery to the Corporation of reasonably satisfactory
evidence that the certificate has been destroyed, stolen or lost, together with
any indemnity that may be reasonably required by the Corporation.





Section 12.Other Rights. The
shares of Designated Preferred Stock shall not have any rights, preferences,
privileges or voting powers or relative, participating, optional or other
special rights, or qualifications, limitations or restrictions thereof, other
than as set forth herein or in the Charter or as provided by applicable
law.










A-10











Exhibit
3.1 – Page 39 --