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                                                                EXHIBIT 4.1


                            ARTICLES OF INCORPORATION
                                       OF
                     COMMUNITY BANK SHARES OF INDIANA, INC.

                                    ARTICLE I

                                      NAME

         NAME. The name of the corporation is Community Bank Shares of Indiana,
Inc. (hereinafter referred to as the "Corporation").

                                   ARTICLE II

                                    DURATION

         DURATION. The period of duration of the existence of the Corporation is
perpetual.

                                   ARTICLE III

                             PURPOSE; EFFECTIVE DATE

         PURPOSE AND EFFECTIVE DATE. The purpose of the Corporation is to engage
in any lawful  activity or business for which a corporation  may be incorporated
under the Indiana Business Corporation Law, I.C. Section 23-1-17-1,  ET SEQ., as
amended ("Act"). These Articles of Incorporation shall become effective upon the
date that they are endorsed as filed with the Secretary of the State of Indiana.

                                   ARTICLE IV

             REGISTERED OFFICE; REGISTERED AGENT; SOLE INCORPORATOR

         REGISTERED OFFICE AND REGISTERED AGENT; SOLE INCORPORATOR.  The address
of the registered  office of the Corporation in the State of Indiana is 202 East
Spring Street,  in the City of New Albany,  County of Floyd,  Indiana 47150. The
name of the  registered  agent at such  address  is  Robert E.  Yates,  who is a
resident  of the State of Indiana and whose  business  office is the same as the
Corporation's  registered  office.  The address of the Corporation's  registered
office  shall also serve as the  principal  office  and  mailing  address of the
Corporation.

         The name and address of the sole  incorporator  of the  Corporation  is
Community  Savings Bank,  F.S.B.,  202 East Spring Street,  New Albany,  Indiana
47150.



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                                    ARTICLE V

                                  CAPITAL STOCK

         CAPITAL  STOCK.  The total number of shares of capital  stock which the
Corporation  has authority to issue is 15,000,000 of which  10,000,000  shall be
common stock $0.10 par value per share (hereinafter the "Common Stock"),  and of
which 5,000,000 shall be preferred stock no par value per share (hereinafter the
"Preferred Stock").  The Board of Director shall have the authority to establish
series  of  unissued  shares  of any  class  of  capital  stock  by  fixing  and
determining the  designations,  preferences,  limitations  and relative  rights,
including voting rights,  of the shares of any series so established to the same
extent that such  designations,  preferences,  limitations  and relative  rights
could be stated if fully set forth in these Articles of Incorporation. Except to
the extent required by governing law, rule or regulation,  the shares of capital
stock may be issued from time to time to such persons,  for such  consideration,
and upon such terms and  conditions  as the Board of Directors  may from time to
time determine, without further approval of stockholders.  The Corporation shall
have the authority to purchase its capital stock out of funds lawfully available
therefor,   which funds shall  include,  without  limitation,  the  Corporations
unreserved  and  unrestricted  capital.  Shares  of  Corporation  capital  stock
acquired by the Corporation  shall  constitute  authorized but unissued  shares.
Stockholders shall not be liable for the debts of the Corporation.

         A  description  of the  different  classes  and  series (if any) of the
Corporation's  capital  stock  and a  statement  of the  designations,  and  the
relative rights,  preferences and limitations of the shares of each class of and
series (if any) of capital stock are as follows:

         A.  COMMON  STOCK.  Except  as  provided  in this  Article V (or in any
resolution or resolutions  adopted by the Board of Directors  pursuant  hereto),
the  exclusive  voting  power shall be vested in the Common  Stock,  the holders
thereof being  entitled to one vote for each share of such Common Stock standing
in the holder's name on the books of the Corporation.  Subject to any rights and
preferences  of any class of stock  having  preference  over the  Common  Stock,
holders of Common  Stock shall be entitled to such  dividends as may he declared
by the Board of Directors out of funds  lawfully  available  therefor.  Upon any
liquidation,  dissolution  or  winding  up of the  affairs  of the  Corporation,
whether  voluntary or involuntary,  holders of Common Stock shall be entitled to
receive pro rata the remaining  assets of the  Corporation  after the payment or
provision for payment of the  Corporation's  debts and liabilities and after the
holders of any class of stock having  preference over the Common Stock have been
paid in full any sums to which they may be entitled.

         B.  PREFERRED  STOCK.  The  Board  of  Directors  is  hereby  expressly
authorized to provide by resolution or  resolutions,  out of the unissued shares
of Preferred Stock, for series of Preferred Stock. Before any shares of any such
series are issued,  the Board of  Directors


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shall  fix,  and  hereby  is  expressly  empowered  to  fix,  by  resolution  or
resolutions, the following provisions of the shares thereof:

                   (a) The  designation of such series,  the number of shares to
         constitute such series and the stated value thereof;

                   (b)  Whether  the shares of such  series  shall  have  voting
         rights, in addition to any voting rights  provided by law,  and, if so,
         the terms of such voting rights, which may be general or limited;

                   (c) The dividends,  if any,  payable on such series,  whether
         any such dividends  shall be  cumulative,  and, if so, from what dates,
         the conditions  and dates upon which such  dividends  shall be payable,
         the  preference  or  relation  which such  dividends  shall bear to the
         dividends  payable  on any  shares of stock of any  other  class or any
         other series of this class;

                   (d)  Whether  the shares of such  series  shall be subject to
         redemption by the Corporation,  and, if so, the times, prices and other
         conditions of such redemption;

                   (e) The amount or amounts payable upon shares of such series,
         and the rights of the  holders of such  series  in,  the  voluntary  or
         involuntary  liquidation,  dissolution  or  winding  up,  or  upon  any
         distribution of the assets, of the Corporation;

                   (f) Whether the shares of such series shall be subject to the
         operation of a retirement or sinking fund and, if so, the extent to and
         manner in which any such retirement or sinking fund shall be applied to
         the purchase or redemption of the shares of such series for  retirement
         or other  corporate  purposes and the terms and provisions  relative to
         the operation thereof;

                   (g) Whether the shares of such  series  shall be  convertible
         into, or  exchangeable  for,  shares of stock of any other class or any
         other  series of this class or any other  securities,  and,  if so, the
         price or prices or the rate or rates of  conversion or exchange and the
         method,  if any,  of  adjusting  the  same,  and any  other  terms  and
         conditions of conversion or exchange;

                   (h) The price or other  consideration for which the shares of
         such series shall be issued;

                   (i) Whether the shares of such series which are redeemed or
         converted shall have the status of authorized but unissued shares of
         preferred stock and whether such shares may be reissued as shares of
         the same or any other series of preferred stock;


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                   (j) The limitations and restrictions, if any, to be effective
         while any shares of such  series are  outstanding  upon the  payment of
         dividends  or the  making  of  other  distributions  on,  and  upon the
         purchase,  redemption or other  acquisition by the  Corporation of, the
         Common  Stock or shares of stock of any other class or any other series
         of this class;

                   (k) The conditions or restrictions, if any, upon the creation
         of  indebtedness of the Corporation or upon the issue of any additional
         stock,  including  additional  shares  of such  series  or of any other
         series of this class or of any other class; and

                   (l)   Any   other   powers,    preferences    and   relative,
         participating,   optional   and   other   special   rights,   and   any
         qualifications, limitations and restrictions thereof.

         The powers, preferences and relative, participating, optional and other
special  rights,  of each series of  Preferred  Stock,  and the  qualifications,
limitations or  restrictions  thereof,  if any, may differ from those of any and
all other series, except that shares of any one series issued at different times
may differ as to the dates from which  dividends  thereon shall accrue and/or be
cumulative.

         Prior to the  issuance  of any  shares  of a series  of  capital  stock
established  by resolution  adopted by the Board of Directors,  the  Corporation
shall  file with the  Secretary  of State of the State of  Indiana  Articles  of
Amendment as required by the Act.  Upon the filing of such Articles of Amendment
by the Secretary of State,  the  resolution  establishing  and  designating  the
series and fixing and determining  the  preferences,  limitations,  and relative
rights  thereof  shall become an amendment of these  Articles of  Incorporation,
effective without stockholder action.

                                   ARTICLE VI

                              NO PREEMPTIVE RIGHTS

         PREEMPTIVE  RIGHTS.  No holder of the capital stock of the  Corporation
shall be entitled as such, as a matter of right or  otherwise,  to subscribe for
or  purchase  any part of any new or  additional  issue of equity or debt of any
class or series  whatsoever,  of the Corporation,  or of securities  convertible
into  equity  or  debt  of  any  class  whatsoever,  whether  now  or  hereafter
authorized,  or whether  issued for cash or other  consideration  or by way of a
dividend.

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                                   ARTICLE VII

                               BOARD OF DIRECTORS

         DIRECTORS. The initial Board of Directors of the Corporation shall be:

                                 C. Thomas Young
                                 Robert J. Koetter, Sr.
                                 Gary L. Libs
                                 Robert E. Yates
                                 Edward Pinaire
                                 James W. Robinson
                                 Timothy T. Shea


         The  business  address of each member of the Board of  Directors of the
Corporation shall be 202 East Spring Street, New Albany, Indiana 47150.

         The  business  and  affairs of the  Corporation  shall be managed by or
under the direction of a Board of Directors.  Except as otherwise fixed pursuant
to the  provisions of Article V hereof  relating to the rights of the holders of
any class or series of stock  having a  preference  over the Common  Stock as to
dividends  or upon  liquidation  to elect  additional  directors,  the number of
directors  shall be  determined  by  resolution  of the  Board of  Directors  as
provided in the  Corporation's  Bylaws,  as may be amended from time to time. In
addition,  the number of directors  shall not be less than five nor greater than
15.  Directors  shall be elected by a plurality of the votes cast by the holders
of  shares  entitled  to vote in the  election  of  directors  at a  meeting  of
stockholders at which a quorum is present.  There shall be no cumulative  voting
for the election of directors of the Corporation.

         A.  CLASSIFICATION  AND TERM. The Board of Directors,  other than those
who may be  elected  by the  holders  of any  class or  series  of stock  having
preference over the Common Stock as to dividends or upon  liquidation,  shall be
divided into three classes as nearly equal in number as possible, with one class
to be elected annually, as set forth in the Bylaws of the Corporation.

         B.  VACANCIES.  Except as otherwise fixed pursuant to the provisions of
Article V hereof relating to the rights of the holders of any class or series of
stock  having  a  preference  over the  Common  Stock  as to  dividends  or upon
liquidation to elect directors, any vacancy occurring in the Board of Directors,
by reason of an  increase  in the number of  directors  or  otherwise,  shall be
filled by a majority  vote of the Whole Board of Directors and a majority of the
Continuing Directors then in office, as defined by Article X, though less than a
quorum of the Board of  Directors,  and any  director so chosen shall be elected
for a term


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of  office  continuing  until  the end of the term  for  which  such  director's
predecessor  was  elected,  or,  if such  director  is  elected  by reason of an
increase  in  the  number  of  directors,  until  the  next  annual  meeting  of
stockholders  at which  the term of the  class to which  the  director  has been
elected  expires,  and until  such  director's  successor  shall  have been duly
elected and qualified.  Whenever the holders of any class or series of shares or
group of classes or series of shares are entitled to elect one or more directors
by the  provisions  of these  Articles of  Incorporation,  any vacancies in such
directorships and any newly created  directorships of such class or series to be
filled by reason of increase in the number of such directors  shall be filled by
the  affirmative  vote of the  holders of such class or group of classes or such
series of shares or group of series of shares,  and any director so chosen shall
be elected for a term of office  continuing  until the end of the term for which
such  director's  predecessor  was elected,  or, if such  director is elected by
reason of an increase in the number of directors,  until the next annual meeting
of  stockholders  at which the term of the class to which the  director has been
elected expires, and until such director's successor shall have been elected and
qualified. When the number of directors is changed, the Board of Directors shall
determine  the class or classes to which the  increased or  decreased  number of
directors  shall be  apportioned,  provided  that no  decrease  in the number of
directors shall shorten the term of any incumbent director.

         C.  REMOVAL.  Subject  to the  rights  of any  class or series of stock
having  preference over the Common Stock as to dividends or upon  liquidation to
elect directors,  any director  (including  persons elected by directors to fill
vacancies in the Board of Directors)  may be removed from office only with cause
by an affirmative  vote of not less than  two-thirds of the votes eligible to be
cast by  stockholders  at a duly  constituted  meeting  of  stockholders  called
expressly  for such  purpose.  Whenever  the  holders  of any class or series of
capital stock of the  Corporation are entitled to elect one or more directors by
the provisions of these Articles of Incorporation or any amendment thereto, only
the holders of shares of that class or series of Capital Stock shall be entitled
to vote for or against  the removal of any  director,  elected by the holders of
the shares of that class or series.  Cause for  removal  shall exist only if the
director  whose removal is proposed has been either  declared of unsound mind by
an order of a court of  competent  jurisdiction,  convicted of a felony or of an
offense  punishable by imprisonment  for a term of more than one year by a court
of competent jurisdiction, or deemed liable by a court of competent jurisdiction
for gross negligence or misconduct in the performance of such director's  duties
to the  Corporation.  At  least  thirty  (30)  days  prior  to such  meeting  of
stockholders, written notice shall be sent to the director whose removal will be
considered at the meeting.

         D. NOMINATIONS OF DIRECTORS.  Nominations of candidates for election as
directors at any annual  meeting of  stockholders  may be made (a) by, or at the
direction  of, a majority of the Board of  Directors  or (b) by any  stockholder
entitled to vote at such annual  meeting.  Only persons  nominated in accordance
with the  procedures  set forth in this  Article  VII.D.  shall be eligible  for
election as directors at an annual meeting. Ballots bearing the names


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of all the persons who have been  nominated  for  election  as  directors  at an
annual  meeting in  accordance  with the  procedures  set forth in this  article
VII.D. shall be provided for use at the annual meeting.

         Subject  to the  rights of the  holders of any class or series of stock
having a preference  over the Common Stock as to dividends or upon  liquidation,
nominations,  other  than  those  made by or at the  direction  of the  Board of
Directors,  shall be made  pursuant to timely notice in writing to the Secretary
of the  Corporation  as set  forth  in  this  Article  VII.D.  To be  timely,  a
stockholder's  notice  shall be  delivered  to, or mailed and  received  at, the
principal executive offices of the Corporation not less than (i) with respect to
the first  annual  meeting of  stockholders  of the  Corporation  following  the
completion of the reorganization of Community Savings Bank, F.S.B. (the "Savings
Bank") into the stock holding company structure,  notice by the stockholder must
be received or so delivered no later than the close of business on the tenth day
following  the day on which notice of the date of the scheduled  annual  meeting
was mailed; (ii) with respect to an election to be held at any succeeding annual
meeting of stockholders, 60 days prior to the anniversary date of the mailing of
proxy materials by the Corporation in connection with the immediately  preceding
annual meeting of stockholders of the  Corporation;  and (iii) with respect to a
special  meeting of  stockholders  for the election of  directors,  the close of
business on the tenth day  following the date on which notice of such meeting is
first given to stockholders. Such stockholder's notice shall set forth (a) as to
each  person  whom  the  stockholder   proposes  to  nominate  for  election  or
re-election  as a director (i) the name,  age,  business  address and  residence
address of such person.  (ii) the  principal  occupation  or  employment of such
person.  (iii) the class and  number of shares of  Corporation  stock  which are
Beneficially Owned (as defined in Article X.A.(c)) by such person on the date of
such stockholder notice, and (iv) any other information  relating to such person
that is required to be  disclosed  in  solicitations  of proxies with respect to
nominees  for  election  as  directors,  pursuant  to  Regulation  14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, but
not limited to,  information  required to be disclosed by Items 4, 5, 6 and 7 of
Schedule 14A and information which would be required to be filed on Schedule 14B
with the Securities and Exchange  Commission (or any successors of such items or
schedules);  and (b) as to the  stockholder  giving  the notice (i) the name and
address, as they appear on the Corporation's  books, of such stockholder and any
other  stockholders known by such stockholder to be supporting such nominees and
(ii) the class and number of shares of Corporation  stock which are Beneficially
Owned by such  stockholder  on the date of such  stockholder  notice and, to the
extent  known,  by any  other  stockholders  known  by  such  stockholder  to be
supporting such nominees on the date of such stockholder  notice. At the request
of the Board of Directors,  any person nominated by, or at the direction of, the
Board for election as a director at an annual or special meeting of stockholders
shall furnish to the Secretary of the Corporation that  information  required to
be set forth in a  stockholder's  notice of  nomination  which  pertains  to the
nominee.

         The Board of Directors may reject any  nomination by a stockholder  not
timely made in accordance  with the  requirements  of this Article VII.D. If the
Board of  Directors,  or a


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designated  committee  thereof,  determines that the  information  provided in a
stockholder's  notice does not satisfy the  informational  requirements  of this
Article VII.D. in any material  respect,  the Secretary of the Corporation shall
promptly  notify  such  stockholder  of  the  deficiency  in  the  notice.   The
stockholder  shall  have an  opportunity  to cure the  deficiency  by  providing
additional  information  to the  Secretary  within such  period of time,  not to
exceed  five  days  from  the  date  such  deficiency  notice  is  given  to the
stockholder,  as  the  Board  of  Directors  or  such  committee  thereof  shall
reasonably  determine.  If the deficiency is not cured within such period, or if
the Board of Directors or such committee thereof reasonably  determines that the
additional  information  provided by the stockholder,  together with information
previously provided, does not satisfy the requirements of this Article VII.D. in
any material respect,  then the Board of Directors may reject such stockholder's
nomination.  The  Secretary of the  Corporation  shall notify a  stockholder  in
writing  whether his  nomination  has been made in accordance  with the time and
informational requirements of this Article VII.D. Notwithstanding the procedures
set forth in this  paragraph,  neither the Board of Directors nor such committee
thereof  makes  a  determination  as to the  validity  of any  nominations  by a
stockholder,  the presiding  officer of the annual  meeting shall  determine and
declare at the annual meeting whether the nomination was made in accordance with
the terms of this Article  VII.D.  If the presiding  officer  determines  that a
nomination  was made in  accordance  with the terms of this Article  VII.D.,  he
shall so declare at the annual  meeting and ballots shall be provided for use at
the meeting with respect to such nominee.  If the presiding  officer  determines
that a  nomination  was not made in  accordance  with the terms of this  Article
VII.D.,  he shall so declare at the annual meeting and the defective  nomination
shall be disregarded.

         Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right,  voting  separately  as a class, to elect  one or more  directors  of the
Corporation,  the provisions of this Article VII.D. shall not apply with respect
to the director or directors elected by such holders of Preferred Stock.

         E. DISCHARGE OF DUTIES.  In discharging the duties of their  respective
positions,  the Board of  Directors,  committees  of the  Board  and  individual
directors shall, in considering the best interests of the Corporation,  consider
the  effects  of any  action  upon  the  employees  of the  Corporation  and its
subsidiaries,  the  depositors  and  borrowers  of any banking  subsidiary,  the
communities in which offices or other  establishments  of the Corporation or any
subsidiary are located and all other pertinent factors.


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                                  ARTICLE VIII

          INDEMNIFICATION, ETC. OF OFFICERS, DIRECTORS, EMPLOYEES AND
                                     AGENTS

         A. LIMITATION OF LIABILITY.  No director shall be personally  liable to
the Corporation or its stockholders  for monetary  damages or injunctive  relief
for any act or omission by such  director as a director  unless the director has
breached or failed to perform the duties of the director's  office in compliance
with Section 23-1-35-1 of the Act, or any successor  provision thereto,  and the
breach or failure to perform constitutes willful misconduct or recklessness.  No
amendment to or repeal of this  Subsection (A) to Article VIII shall apply to or
have any effect on the  liability  or alleged  liability  of any director of the
Corporation  for or with  respect  to any  acts or  omissions  of such  director
occurring prior to such amendment.

         B. INDEMNIFICATION.  The Corporation shall indemnify any person who was
or is a party or is threatened to be a made a party to any  threatened,  pending
or completed  formal or informal  action,  suit or  proceeding,  whether  civil,
criminal,  administrative,  arbitrative or investigative,  by reason of the fact
that  such  person  is or was a  director,  officer,  employee  or  agent of the
Corporation or any predecessor of the  Corporation,  or is or was serving at the
request of the  Corporation or any predecessor of the Corporation as a director,
officer,  partner,  member,  manager,  employee or agent of another corporation,
partnership,  limited liability company, joint venture,  trust, employee benefit
plan or other enterprise,  against liability and expenses (including court costs
and  attorney's  fees),  judgments,  fines,  excise  taxes and  amounts  paid in
satisfaction,  settlement or compromise actually and reasonably incurred by such
person in  connection  with such action,  suit or  proceeding to the full extent
authorized  by law.  Such  indemnity  shall be made  only if (i)  such  person's
conduct was in good faith; (ii) such person reasonably  believed (a) in the case
of conduct in the person's  official  capacity  with the  Corporation,  that the
person's  conduct  was in its best  interests  and (b) in all other  cases,  the
person's conduct was at least not opposed to the  Corporation's  best interests;
and (iii) in the case of any  criminal  proceeding,  the  person  either (a) had
reasonable  cause to believe the  person's  conduct  was  lawful,  or (b) had no
reasonable  cause to  believe  that such  person's  conduct  was  unlawful.  The
termination of a proceeding by a judgment, order, settlement, conviction or upon
a plea of nolo  contendere or its  equivalent  is not, of itself,  determinative
that the person did not meet the standard of conduct  described  herein.  Such a
determination  shall be made as prescribed  by Section  23-1-37-12 of the Act or
any successor provision thereto.

         C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by a director,
officer,  employee or agent of the  Corporation in defending an action,  suit or
proceeding  described in Article  VIII.B.  shall be paid by the  Corporation  in
advance  of the  final  disposition  of  such  action,  suit  or  proceeding  as
authorized by the Board of Directors only upon receipt of written affirmation by
or on  behalf  of such  person  of his  good  faith  belief  that he has met the
standard of conduct  necessary  for  indemnification  under  relevant  law and a
written


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undertaking, executed personally or on the person's behalf, to repay such amount
if it shall  ultimately be determined  that the person has not met that standard
or if it is ultimately  determined  that  indemnification  of the person against
expenses  incurred by him in  connection  with that  proceeding is prohibited by
relevant  law, and a  determination  is made by the Board of Directors  that the
facts then known would not preclude indemnification under relevant law.

         D. OTHER  RIGHTS AND  REMEDIES.  The  indemnification  provided by this
Article  VIII shall not be deemed to  exclude  any other  rights to which  those
seeking  indemnification  or  advancement  of expenses may be entitled under the
Corporation's Articles of Incorporation,  any insurance or other agreement, vote
of stockholders or disinterested  directors or otherwise,  both as to actions in
their official capacity and as to actions in another capacity while holding such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee  or agent  and  shall  inure  to the  benefit  of the  heirs,
executors  and  administrators  of such  person,  and  nothing  herein  shall be
construed to limit any person's right to mandatory  indemnification as set forth
in the Act.

         E. INSURANCE.  Upon resolution passed by the Board, the Corporation may
purchase  and  maintain  insurance  on  behalf  of  any  person  who is or was a
director,  officer, employee or agent of the Corporation,  or was serving at the
request of the Corporation as a director,  officer,  partner,  member,  manager,
employee  or  agent  of  another  corporation,  partnership,  limited  liability
company,  joint venture,  trust,  employee  benefit plan or another  enterprise,
against  any  liability  asserted  against  him or  incurred  by him in any such
capacity,  or arising out of his status,  whether or not the  Corporation  would
have the power to indemnify him against such  liability  under the provisions of
this Article or the Act.

         F.  MODIFICATION.  The duties of the  Corporation  to indemnify  and to
advance  expenses to a  director,  officer,  employee or agent  provided in this
Article VIII shall be in the nature of a contract  between the  Corporation  and
each such director,  officer,  employee or agent,  and no amendment or repeal of
any  provision  of this  Article  VIII shall  alter,  to the  detriment  of such
director, officer, employee or agent, the right of such person to the advance of
expenses or indemnification related to a claim based on an act or failure to act
which took place prior to such amendment or repeal.


                                   ARTICLE IX

               MEETINGS OF STOCKHOLDERS AND STOCKHOLDER PROPOSALS

         A. SPECIAL  MEETINGS OF STOCKHOLDERS.  Except as otherwise  required by
law and subject to the rights of the holders of any class or series of Preferred
Stock,  special  meetings of the  stockholders  of the Corporation may be called
only by (i) the Board of  Directors  pursuant  to a  resolution  approved by the
affirmative vote of a majority of the Whole Board of Directors and a majority of
the  Continuing  Directors  then in office or (ii) the  Chairman of the Board or
Chief Executive Officer.


                                       10

<PAGE> 19


         B. ACTION  WITHOUT A MEETING.  Any action  permitted to be taken by the
stockholders  at a meeting may be taken  without a meeting if consent in writing
setting forth the action so taken shall be signed by all of the stockholders who
would be  entitled  to vote at a meeting  for such  purpose  and filed  with the
Secretary of the Corporation as part of the corporate records.

         C. STOCKHOLDER  PROPOSALS.  At an annual meeting of stockholders,  only
such business shall be conducted,  and only such proposals  shall be acted upon,
as shall have been brought before the annual meeting by, or at the direction of,
(a) the  Board  of  Directors  or (b) any  stockholder  of the  Corporation  who
complies with all the requirements set forth in this Article IX.C.

         Proposals, other than those made by or at the direction of the Board of
Directors,  shall be made  pursuant to timely notice in writing to the Secretary
of the Corporation as set forth in this Article IX.C. For stockholder  proposals
to be included in the Corporation's proxy materials, the stockholder must comply
with all the  timing and  informational  requirements  of Rule  14a-8  under the
Exchange  Act  (or  any  successor  regulation).  With  respect  to  stockholder
proposals  to be  considered  at the  annual  meeting  of  stockholders  but not
included in the Corporation's proxy materials, the stockholder's notice shall be
delivered to, or mailed and received at, the principal  executive offices of the
Corporation  not less than (i) with  respect  to the  first  annual  meeting  of
stockholders of the Corporation  following the completion of the  reorganization
of the  Savings  Bank into the stock  holding  company  structure,  the close of
business on the tenth day  following  the day on which notice of the date of the
scheduled  annual  meeting was mailed,  and (ii) with respect to any  succeeding
annual meeting of  stockholders,  60 days prior to the  anniversary  date of the
mailing of proxy materials by the Corporation in connection with the immediately
preceding annual meeting of stockholders of the Corporation.  Such stockholder's
notice  shall set forth as to each  matter  the  stockholder  proposes  to bring
before the annual meeting (a) a brief  description of the proposal desired to be
brought before the annual  meeting and the reasons for conducting  such business
at the  annual  meeting,  (b)  the  name  and  address,  as they  appear  on the
Corporation's  books,  of the  stockholder  proposing  such business and, to the
extent known, any other  stockholders known by such stockholder to be supporting
such proposal, (c) the class and number of shares of the Corporation stock which
are Beneficially Owned by the stockholder on the date of such stockholder notice
and, to the extent known, by any other stockholders known by such stockholder to
be supporting such proposal on the date of such stockholder  notice, and (d) any
financial  interest of the  stockholder  in such proposal  (other than interests
which all stockholders would have).

         The Board of Directors may reject any  stockholder  proposal not timely
made in  accordance  with  the  terms  of this  Article  IX.C.  If the  Board of
Directors,  or a designated  committee thereof,  determines that the information
provided  in  a  stockholder's   notice  does  not  satisfy  the   informational
requirements of this Article IX.C. in any material respect, the Secretary of the
Corporation  shall  promptly  notify such  stockholder  of the deficiency in the
notice.  The  stockholder  shall have an  opportunity  to cure the deficiency by
providing


                                       11


<PAGE> 20


additional  information  to the  Secretary  within such  period of time,  not to
exceed  five  days  from  the  date  such  deficiency  notice  is  given  to the
stockholder,  as  the  Board  of  Directors  or  such  committee  thereof  shall
reasonably  determine.  If the deficiency is not cured within such period, or if
the Board of Directors or such committee thereof  determines that the additional
information  provided by the stockholder,  together with information  previously
provided,  does not  satisfy  the  requirements  of this  Article  IX.C.  in any
material  respect,  then the Board of  Directors  may reject such  stockholder's
proposal. The Secretary of the Corporation shall notify a stockholder in writing
whether his proposal has been made in accordance with the time and informational
requirements of this Article IX.C.  Notwithstanding  the procedures set forth in
this  paragraph,  if neither the Board of Directors nor such  committee  thereof
makes a  determination  as to the  validity  of any  stockholder  proposal,  the
presiding  officer of the annual  meeting  shall  determine  and  declare at the
annual meeting whether the stockholder  proposal was made in accordance with the
terms  of  this  Article  IX.C.  If  the  presiding  officer  determines  that a
stockholder  proposal  was made in  accordance  with the  terms of this  Article
IX.C.,  he shall so declare at the annual  meeting and ballots shall be provided
for use at the  meeting  with  respect to any such  proposal.  If the  presiding
officer  determines that a stockholder  proposal was not made in accordance with
the terms of this Article  IX.C.,  he shall so declare at the annual meeting and
any such proposal shall not be acted upon at the annual meeting.

         This  provision  shall not prevent the  consideration  and  approval or
disapproval  at the  annual  meeting  of  reports  of  officers,  directors  and
committees of the Board of Directors,  but in connection  with such reports,  no
new business shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.

                                    ARTICLE X

             CERTAIN BUSINESS COMBINATIONS AND ACQUISITIONS OF STOCK

         A. DEFINITIONS AND RELATED MATTERS.

                   (a)  AFFILIATE.  An "Affiliate"  of, or a Person  "affiliated
         with," a specified Person means a Person that  directly,  or indirectly
         through one or more intermediaries,  controls,  or is controlled by, or
         is under common control with, the Person specified.

                   (b) ASSOCIATE.  The term  "Associate" when used to indicate a
         relationship with any Person means:

                             (i) Any corporation or organization (other than the
                   Corporation or a Subsidiary of the Corporation) of which such
                   Person  is  an  officer  or  partner  or  is,   directly   or
                   indirectly, the beneficial owner of 10 percent or more of any
                   class of equity securities;


                                       12


<PAGE> 21


                             (ii) Any trust or other estate in which such Person
                   has a 10  percent  or greater  beneficial  interest  or as to
                   which such Person serves as trustee or in a similar fiduciary
                   capacity;

                             (iii) Any relative or spouse of such Person, or any
                   relative of such spouse who has the same home as such Person;
                   or

                             (iv) Any investment  company  registered  under the
                   Investment  Company  Act of 1940 for which such Person or any
                   Affiliate or Associate  of such Person  serves as  investment
                   advisor.

                   (c)  BENEFICIAL  OWNER.  A  Person  shall be  considered  the
         "Beneficial  Owner"  of any  shares of stock  (whether  or not owned of
         record):

                             (i)  With  respect  to  which  such  Person  or any
                   Affiliate or Associate of such Person  directly or indirectly
                   has or shares (1) voting  power,  including the power to vote
                   or to direct  the voting of such  shares of stock  and/or (2)
                   investment  power,  including  the power to  dispose of or to
                   direct the disposition of such shares of stock;

                             (ii)  Which  such  Person  or  any   Affiliate   or
                   Associate  of  such  Person  has  (1) the  right  to  acquire
                   (whether such right is exercisable  immediately or only after
                   the passage of time) pursuant to any  agreement,  arrangement
                   or understanding  or upon the exercise of conversion  rights,
                   exchange rights,  warrants or options,  or otherwise,  and/or
                   (2) the right to vote pursuant to any agreement,  arrangement
                   or   understanding   (whether   such  right  is   exercisable
                   immediately or only after the passage of time); or

                             (iii)  Which  are  Beneficially  Owned  within  the
                   meaning of (i) or (ii) of this  Article  X.A.(c) by any other
                   Person with which such  first-mentioned  Person or any of its
                   Affiliates or Associates  has any  agreement,  arrangement or
                   understanding,  written or oral,  with respect to  acquiring,
                   holding,  voting or  disposing  of any shares of stock of the
                   Corporation   or  any   Subsidiary  of  the   Corporation  or
                   acquiring,  holding or disposing of all or substantially all,
                   or any  Substantial  Part, of the assets or businesses of the
                   Corporation or a Subsidiary of the Corporation.

         For the purpose only of determining  whether a Person is the Beneficial
Owner of a  percentage  specified in this  Article X of the  outstanding  Voting
Shares,  such shares  shall be deemed to include any Voting  Shares which may be
issuable  pursuant to any agreement,  arrangement or  understanding  or upon the
exercise of conversion rights, exchange rights,  warrants,  options or otherwise
and which are deemed to be  Beneficially  Owned by such  Person  pursuant to the
foregoing provisions of this Article X.A.(c).


                                       13


<PAGE> 22


                   (d) BUSINESS COMBINATION. A "Business Combination" means:

                             (i) The sale,  exchange,  lease,  transfer or other
                   disposition  to or with a Related  Person or any Affiliate or
                   Associate of such Related Person by the Corporation or any of
                   its  Subsidiaries  (in a single  transaction  or a series  of
                   related  transactions) of  all or  substantially  all, or any
                   Substantial  Part,  of  its or  their  assets  or  businesses
                   (including,  without  limitation,  any securities issued by a
                   Subsidiary);

                             (ii)  The  purchase,   exchange,   lease  or  other
                   acquisition by the Corporation or any of its Subsidiaries (in
                   a single transaction or a series of related  transactions) of
                   all or  substantially  all, or any  Substantial  Part, of the
                   assets or business of a Related  Person or any  Affiliate  or
                   Associate of such Related Person;

                             (iii)   Any   merger   or   consolidation   of  the
                   Corporation or any Subsidiary  thereof into or with a Related
                   Person or any  Affiliate or Associate of such Related  Person
                   or into or with another  Person  which,  after such merger or
                   consolidation,  would be an  Affiliate  or an  Associate of a
                   Related Person,  in each case irrespective of which Person is
                   the surviving entity in such merger or consolidation;

                             (iv)   Any    reclassification    of    securities,
                   recapitalization   or  other   transaction   (other   than  a
                   redemption  in  accordance  with the  terms  of the  security
                   redeemed)  which has the effect,  directly or indirectly,  of
                   increasing the  proportionate  amount of Voting Shares of the
                   Corporation or any Subsidiary  thereof which are Beneficially
                   Owned  by a  Related  Person,  or  any  partial  or  complete
                   liquidation,  spinoff or split up of the  Corporation  or any
                   Subsidiary  thereof;  provided,  however,  that this  Article
                   X.A.(d)(iv)  shall not relate to any transaction of the types
                   specified  herein that have been approved by the  affirmative
                   vote of at least  two-thirds  of the Whole Board of Directors
                   and a majority of the Continuing Directors; or

                             (v) The  acquisition  upon the issuance  thereof of
                   Beneficial  Ownership by a Related Person of Voting Shares or
                   securities  convertible  into  Voting  Shares  or any  voting
                   securities or securities  convertible into voting  securities
                   of any Subsidiary of the Corporation, or the acquisition upon
                   the  issuance  thereof of  Beneficial  Ownership by a Related
                   Person of any  rights,  warrants or options to acquire any of
                   the  foregoing or any  combination  of the  foregoing  Voting
                   Shares or voting securities of a Subsidiary.


                                       14


<PAGE> 23


         As used in this definition, a "series of related transactions" shall be
deemed to include not only a series of transactions with the same Related Person
but also a series of separate transactions with a Related Person or any
Affiliate or Associate of such Related Person.

         Anything in this definition to the contrary notwithstanding, this
definition shall not be deemed to include any transaction of the type set forth
in Article X.A.(d)(i) through X.A.(d)(iii) between or among any two or more
Subsidiaries of the Corporation or the Corporation and one or more Subsidiaries
of the Corporation if such transaction has been approved by the affirmative vote
of at least two-thirds of the Whole Board of Directors and a majority of the
Continuing Directors on or prior to the Date of Determination.

                   (e) CONTINUING DIRECTOR. A "Continuing Director" shall mean:

                             (i)   Each  of  the   present   directors   of  the
                   Corporation as set forth in Article VII,  whether or not such
                   person is a Related  Person or an Affiliate or Associate of a
                   Related Person,  except that such designation shall in no way
                   be deemed to affect  or  change  or  diminish  the  fiduciary
                   duties of such person to the Corporation;

                             (ii)  An  individual  who  is  unaffiliated  with a
                   Related Person and who was a member of the Board of Directors
                   prior to the time that a Related Person  acquired 10% or more
                   of the Voting Shares; or,

                             (iii)  An  individual  who is  unaffiliated  with a
                   Related  Person  and  who  is  designated  before  his or her
                   initial  election as a  Continuing  Director by a majority of
                   the then Continuing Directors.

                   (f) DATE OF  DETERMINATION.  The term "Date of Determination"
         means:

                             (i) The date on which a binding  agreement  (except
                   for  the  fulfillment  of  conditions  precedent,  including,
                   without  limitation,  votes of  stockholders  to approve such
                   transaction)   is  entered  into  by  the   Corporation,   as
                   authorized  by its Board of  Directors,  and  another  Person
                   providing for any Business Combination; or,

                             (ii) If such an agreement as referred to in Article
                   X.A.(f)(i)  above is amended so as to make it less  favorable
                   to the  Corporation and its  stockholders,  the date on which
                   such  amendment  is approved by the Board of Directors of the
                   Corporation; or,

                             (iii) In cases where neither Article X.A.(f)(i) nor
                   (ii)  shall  be   applicable,   the   record   date  for  the
                   determination of stockholders of the Corporation  entitled to
                   notice of and to vote upon the transaction in question.


                                       15


<PAGE> 24


         A majority of the Continuing Directors shall have the power and duty to
determine the Date of Determination as to any transaction under this Article X.
Any such determination shall be conclusive and binding for all purposes of this
Article X.

                   (g) FAIR MARKET  VALUE.  The term "Fair  Market  Value" shall
         mean:

                             (i) In the case of stock, the highest closing  sale
                   price during the 30-day period immediately preceding the date
                   in  question of a share of such stock on the  Composite  Tape
                   for New York  Stock  Exchange  - Listed  Stocks,  or, if such
                   stock is not quoted on the  Composite  Tape,  on the New York
                   Stock  Exchange or the American Stock  Exchange,  or, if such
                   stock  is not  listed  on such  exchanges,  on the  principal
                   United  States  securities   exchange  registered  under  the
                   Exchange  Act on which such  shares are  listed,  or, if such
                   shares  are not  listed  on any such  exchange,  the  highest
                   closing  price with  respect to a share of such stock  during
                   the  30-day  period  preceding  the date in  question  on the
                   National  Market  System  of  the  National   Association  of
                   Securities  Dealers Automated  Quotations  ("NASDAQ") System,
                   or, if not listed on the National Market System,  the highest
                   mean of the  closing bid and asked  quotations  on the NASDAQ
                   System  during such 30-day  period or any system then in use,
                   or, if no such  quotations  are  available,  the fair  market
                   value on the date in question of a share as  determined  by a
                   majority of the Continuing Directors in good faith; and

                             (ii) In the case of  property  other  than  cash or
                   stock,  the fair market value of such property on the date in
                   question  as  determined  by a  majority  of  the  Continuing
                   Directors in good faith.

                   (h)   INDEPENDENT   MAJORITY   OF   STOCKHOLDERS.   The  term
         "Independent  Majority  of  Stockholders"  shall mean the  holders of a
         majority of the  outstanding  Voting  Shares that are not  Beneficially
         Owned or controlled, directly or indirectly, by a Related Person.

                   (i) OFFER.  The term "Offer" shall mean every offer to buy or
         otherwise acquire,  solicitation of an offer to sell, tender offer for,
         or request or  invitation  for  tenders of, a security or interest in a
         security for value;  PROVIDED  that the term "Offer" shall not include:
         (a) inquiries  directed solely to the management of the Corporation and
         not intended to be communicated  to stockholders  which are designed to
         elicit an indication of management's receptivity to the basic structure
         of a potential  acquisition  with  respect to the amount of cash and/or
         securities, manner of acquisition and formula for determining price, or
         (b) non-binding  expressions of understanding or letters of intent with
         the management of the  Corporation  regarding the basic  structure of a
         potential  acquisition  with  respect  to the  amount  of  cash  and/or
         securities, manner of acquisition and formula for determining price.


                                       16


<PAGE> 25


                   (j)  PERSON.   The  term  "Person"  shall  mean  any  person,
         partnership,  corporation,  or group or other  entity  (other  than the
         Corporation,  any Subsidiary of the  Corporation  or a trustee  holding
         stock  for  the  benefit  of  employees  of  the   Corporation  or  its
         Subsidiaries,  or any one of  them,  pursuant  to one or more  employee
         benefit  plans  or  arrangements).  When two or more  Persons  act as a
         partnership,  limited  partnership,  syndicate,  association   or other
         group for the purpose of  acquiring,  holding or disposing of shares of
         stock,  such  partnership,  syndicate,  association  or group  shall be
         deemed a "Person".

                   (k) RELATED PERSON.  The term "Related Person" shall mean any
         Person  who or which  is (a) the  Beneficial  Owner,  as of the Date of
         Determination,  or immediately  prior to the consummation of a Business
         Combination,  of 10% or more of the Voting Shares;  or (b) an Affiliate
         of  the  Corporation  and  at  any  time  within  the  two-year  period
         immediately prior to the announcement of a Business Combination was the
         Beneficial  Owner,  directly or indirectly,  of 10% or more of the then
         outstanding  Voting  Shares;  or (c) an  assignee  of or has  otherwise
         succeeded  to any  Voting  Shares  which  were at any time  within  the
         two-year  period  immediately  prior to the  announcement of a Business
         Combination   Beneficially   Owned  by  any  Related  Person,  if  such
         assignment  or  succession  shall  have  occurred  in the  course  of a
         transaction or series of  transactions  not involving a public offering
         within the meaning of the Securities Act of 1933.

                   (l)  SUBSTANTIAL  PART. The term  "Substantial  Part" as used
         with reference to the assets of the Corporation of any Subsidiary or of
         any Related  Person means assets having a value of more than 10% of the
         total consolidated assets of the Corporation and its Subsidiaries as of
         the end of the  Corporation's  most recent  fiscal year ending prior to
         the time the determination is being made.

                   (m)  SUBSIDIARY.   The  term  "Subsidiary"   shall  mean  any
         corporation  or other  entity of which the Person in question  owns not
         less than 50 percent  of any class of equity  securities,  directly  or
         indirectly.

                   (n) VOTING SHARES. The term "Voting Shares" shall mean shares
         of the  Corporation  entitled  to vote  generally  in the  election  of
         directors.

                   (o)  WHOLE  BOARD  OF  DIRECTORS.  The term  "Whole  Board of
         Directors"   shall  mean  the  total  number  of  directors  which  the
         Corporation would have if there were no vacancies.

                   (p) CERTAIN DETERMINATIONS WITH RESPECT TO ARTICLE X.

                             (i) A majority of the  Continuing  Directors  shall
                   have the power to determine  for the purposes of this Article
                   X, on the basis of information  known to them: (1) the number
                   of Voting Shares of which any Person is the

                                       17

<PAGE> 26


                    Beneficial  Owner,  (2) whether a Person is an  Affiliate or
                    Associate of another, (3) whether a Person has an agreement,
                    arrangement or understanding  with another as to the matters
                    referred  to in the  definition  of  "Beneficial  Owner"  as
                    hereinabove  defined,  (4) whether the assets subject to any
                    Business  Combination  constitute  a  "Substantial  Part" as
                    hereinabove  defined,  (5) whether two or more  transactions
                    constitute a "series of related transactions" as hereinabove
                    defined,  (6) any matters referred to in Article X.A.(p)(ii)
                    below,  and (7) such other  matters  with respect to which a
                    determination is required under this Article X.

                             (ii) A  Related  Person  shall  be  deemed  to have
                   acquired  a share of the  Corporation  at the time  when such
                   Related  Person  became  a  Beneficial  Owner  thereof.  With
                   respect to shares owned by  Affiliates,  Associates  or other
                   Persons whose  ownership is  attributable to a Related Person
                   under the foregoing  definition of Beneficial  Owner,  if the
                   price  paid by such  Related  Person  for such  shares is not
                   determinable,  the  price so paid  shall be  deemed to be the
                   higher of (1) the price paid upon acquisition  thereof by the
                   Affiliate,  Associate or other Person or (2) the market price
                   of the shares in question (as determined by a majority of the
                   Continuing  Directors)  at the time when the  Related  Person
                   became the Beneficial Owner thereof.

                   (q) FIDUCIARY OBLIGATIONS.  Nothing contained in this Article
         X shall he construed to relieve any Related  Person from any  fiduciary
         obligation imposed by law.

         B. APPROVAL OF BUSINESS COMBINATION.

                   (a) Except as  provided  in Article  X.B.(b),   neither   the
         Corporation  nor any of its  Subsidiaries  shall  become  party  to any
         Business Combination without the prior affirmative vote at a meeting of
         the Corporation's stockholders of:

                             (i) The  holders of not less than 80 percent of the
                   outstanding Voting Shares, voting separately as a class; and

                             (ii) An Independent Majority of Stockholders.

         Such favorable votes shall be in addition to any stockholder vote which
would be  required  without  reference  to this  Article  X.B.(a)  and  shall be
required  notwithstanding  the fact that no vote may be  required,  or that some
lesser percentage may be specified by law or otherwise.

                   (b) The  provisions  of Article X.B.(a) shall  not apply to a
         particular Business  Combination,  and such Business  Combination shall
         require  only  such

                                       18


<PAGE> 27


          stockholder  vote (if any) as would be required  without  reference to
          this Article X.B., if all of the conditions set forth in subparagraphs
          (i) through (vii) below are satisfied:

                             (i) The  ratio of (1) the  aggregate  amount of the
                   cash and the Fair Market Value of the other  consideration to
                   be received  per share of Common Stock (as defined in Article
                   V) of the Corporation in such Business Combination by holders
                   of Common  Stock  other than the Related  Person  involved in
                   such Business Combination,  to (2) the market price per share
                   of the Common Stock  immediately prior to the announcement of
                   the proposed  Business  Combination,  is at least as great as
                   the  ratio of (x) the  highest  per  share  price  (including
                   brokerage commissions, transfer taxes and soliciting dealers'
                   fees)  which  such  Related  Person has  theretofore  paid in
                   acquiring   any   Common   Stock   prior  to  such   Business
                   Combination,  to (y) the  market  price  per  share of Common
                   Stock  immediately  prior to the initial  acquisition by such
                   Related Person of any shares of Common Stock; and

                             (ii) The aggregate  amount of the cash and the Fair
                   Market Value of other  consideration to be received per share
                   of Common Stock in such  Business  Combination  by holders of
                   Common Stock,  other than the Related Person involved in such
                   Business Combination,  is not less than the highest per share
                   price (including  brokerage  commissions,  transfer taxes and
                   soliciting  dealers'  fees)  paid by such  Related  Person in
                   acquiring any of its holdings of Common Stock; and

                             (iii) If applicable, the ratio of (1) the aggregate
                   amount  of the  cash  and the  Fair  Market  Value  of  other
                   consideration to be received per share of Preferred Stock (as
                   defined  in Article V) of the  Corporation  in such  Business
                   Combination  by holders  of  Preferred  Stock  other than the
                   Related Person involved in such Business Combination,  to (2)
                   the market price per share of the Preferred Stock immediately
                   prior  to  the   announcement   of  the   proposed   Business
                   Combination,  is at least  as  great as the  ratio of (x) the
                   highest per share  price  (including  brokerage  commissions,
                   transfer  taxes and  soliciting  dealers'  fees)  which  such
                   Related  Person  has   theretofore   paid  in  acquiring  any
                   Preferred Stock prior to such Business Combination to (y) the
                   market price per share of Preferred Stock  immediately  prior
                   to the  initial  acquisition  by such  Related  Person of any
                   shares of Preferred Stock; and

                             (iv) If  applicable,  the  aggregate  amount of the
                   cash and the Fair Market Value of other  consideration  to be
                   received  per  share  of  Preferred  Stock  in such  Business
                   Combination  by holders of  Preferred  Stock,  other than the
                   Related Person involved in such Business Combination,  is not
                   less than the highest per share  price  (including  brokerage
                   commissions.  transfer  taxes and  soliciting  dealers' fees)
                   paid by such Related  Person in acquiring any of its holdings
                   of Preferred Stock; and


                                       19


<PAGE> 28


                             (v) The  consideration  (if any) to be  received in
                   such Business  Combination by holders of stock other than the
                   Related  Person  (whether  Common Stock or  Preferred  Stock)
                   involved  shall,  except  to the  extent  that a  stockholder
                   agrees  otherwise  as to all or part of the  shares  which he
                   owns,  be in  the  same  form  and of the  same  kind  as the
                   consideration  paid by the Related Person in acquiring Common
                   Stock already owned by it; and

                             (vi) After  such  Related  Person  became a Related
                   Person  and  prior  to  the  consummation  of  such  Business
                   Combination:

                                      (1) such  Related  Person  shall  vote his
                             shares in such a manner as to cause,  to the extent
                             necessary  and within  his power as a  stockholder,
                             the  Board  of  Directors  of  the  Corporation  to
                             include at all times  representation  by Continuing
                             Directors  proportionate  to  the  ratio  that  the
                             number of Voting  Shares  of the  Corporation  from
                             time  to time  owned  by  stockholders  who are not
                             Related  Persons  bears to all Voting Shares of the
                             Corporation  outstanding  at the  time in  question
                             (with a Continuing Director to occupy any resulting
                             fractional position among the directors);

                                      (2) such  Related  Person  shall  not have
                             acquired   from  the   Corporation,   directly   or
                             indirectly,  any shares of the Corporation  (except
                             (x)  upon  conversion  of  convertible   securities
                             acquired by it prior to  becoming a Related  Person
                             or (y) as a result  of a pro rata  stock  dividend,
                             stock  split  or  division  of  shares  or (z) in a
                             transaction    which   satisfied   all   applicable
                             requirements of this Article X);

                                      (3) such  Related  Person  shall  not have
                             acquired  any  additional   Voting  Shares  of  the
                             Corporation  or  securities   convertible  into  or
                             exchangeable  for Voting Shares except as a part of
                             the  transaction  which  resulted  in such  Related
                             Person becoming a Related Person;

                                      (4) such Related Person shall not have (x)
                             received  the  benefit,   directly  or   indirectly
                             (except  proportionately as a stockholder),  of any
                             loans,  advances,   guarantees,  pledges  or  other
                             financial assistance or tax credits provided by the
                             Corporation  or any  Subsidiary,  or (y)  made  any
                             major  change  in  the  Corporation's  business  or
                             equity  capital   structure  or  entered  into  any
                             contract,  arrangement  or  understanding  with the
                             Corporation  except  any  such  change,   contract,
                             arrangement  or  understanding  as  may  have  been
                             approved by the  favorable  vote of not less than a
                             majority  of the  Whole  Board of  Directors  and a
                             majority  of  the   Continuing   Directors  of  the
                             Corporation; and


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<PAGE> 29


                                      (5) except as  approved  by a majority  of
                             the Whole Board of Directors  and a majority of the
                             Continuing Directors, there shall have been: (x) no
                             failure  to  declare  and pay at the  regular  date
                             therefor any dividends  (whether or not cumulative)
                             on  any  outstanding   Preferred   Stock;   (y)  no
                             reduction in the annual rate of  dividends  paid on
                             the Common  Stock  (except as  necessary to reflect
                             any  subdivision of the Common  Stock);  and (z) an
                             increase  in  such  annual  rate  of  dividends  as
                             necessary    to   reflect   any    reclassification
                             (including     any    reverse     stock     split),
                             recapitalization,  reorganization  or  any  similar
                             transaction  which has the effect of  reducing  the
                             number of outstanding shares of the stock; and

                             (vii)  A  proxy   statement   complying   with  the
                   requirements under the Exchange Act shall have been mailed to
                   all holders of Voting  Shares for the  purpose of  soliciting
                   stockholder approval of such Business Combination. Such proxy
                   statement is not required to be filed with or approved by the
                   Securities and Exchange  Commission unless otherwise required
                   by law.  Such  proxy  statement  shall  contain  at the front
                   thereof,  in a prominent place, any recommendations as to the
                   advisability (or inadvisability) of the Business  Combination
                   which  the  Continuing  Directors,  or any of them,  may have
                   furnished in writing  and, if deemed  advisable by a majority
                   of  the  Continuing  Directors,  an  opinion  of a  reputable
                   investment  banking  firm  as to the  fairness  (or  lack  of
                   fairness) of the terms of such Business  Combination from the
                   point of view of the holders of Voting  Shares other than any
                   Related Person (such  investment  banking firm to be selected
                   by a majority of the  Continuing  Directors,  to be furnished
                   with all information it reasonably requests, and to be paid a
                   reasonable   fee  for  its  services   upon  receipt  by  the
                   Corporation of such opinion).

                   (c) For purposes of article  X.B.(b)(i)  through  X.B.(b)(iv)
         hereof in the event of a  Business  Combination  upon  consummation  of
         which the Corporation would be the surviving  corporation or company or
         would  continue  to  exist  (unless  it is  provided,  contemplated  or
         intended that as part of such Business  Combination  or within one year
         after consummation  thereof a plan of liquidation or dissolution of the
         Corporation  will be  effected),  the term "other  consideration  to be
         received" shall include (without  limitation)  Common Stock retained by
         the stockholders of the Corporation  other than Related Persons who are
         parties to such Business Combination.

                   (d) The  provisions  of this Article X.B.  shall not apply to
         (i) any Business  Combination approved by two-thirds of the Whole Board
         of Directors of the  Corporation at a time prior to the  acquisition of
         10 percent or more of the outstanding  Voting Shares of the Corporation
         by the Related  Person,  or (ii) any


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<PAGE> 30


          Business  Combination  approved  by  two-thirds  of the Whole Board of
          Directors  and a  majority  of the  Continuing  Directors  after  such
          acquisition.

         C.  EVALUATION OF BUSINESS  COMBINATIONS,  ETC. In connection  with the
exercise of its  judgment  in  determining  what is in the best  interest of the
Corporation and its  stockholders  when  evaluating a Business  Combination or a
proposal by another Person or Persons to make a Business Combination or a tender
or exchange offer, the Board of Directors of the Corporation  shall, in addition
to considering the adequacy of the amount to be paid in connection with any such
transaction,  consider all of the following  factors and any other factors which
it deems relevant: (i) the social and economic effects of the transaction on the
Corporation and its  Subsidiaries and their  respective  employees,  depositors,
loan and other  customers,  creditors and other  elements of the  communities in
which the  Corporation  and its  Subsidiaries  operate or are located;  (ii) the
business and financial  condition and earnings prospects of the acquiring Person
or Persons,  including,  but not limited to, debt service and other  existing or
likely  financial  obligations  of the  acquiring  Person  or  Persons,  and the
possible effect of such conditions upon the Corporation and its Subsidiaries and
the elements of the communities in which the  Corporation  and its  Subsidiaries
operate or are located;  and (iii) the  competence,  experience and integrity of
the acquiring Person or Persons and its or their management.

         D.  AMENDMENTS,  ETC.,  OF THIS  ARTICLE X.  Notwithstanding  any other
provisions of these Articles of  Incorporation  or the Bylaws of the Corporation
(and  notwithstanding  the fact that some lesser  percentage may be specified by
law, these Articles of  Incorporation  or the Bylaws of the  Corporation),  this
Article X shall not be  amended,  altered,  changed,  or  repealed  without  the
affirmative  vote of (i) the holders of  two-thirds  or more of the  outstanding
Voting Shares, voting separately as a class, and (ii) an Independent Majority of
Stockholders;  provided, however, that this Article X.D. shall not apply to, and
such vote  shall  not be  required  for,  any such  amendment,  change or repeal
recommended to stockholders by the favorable vote of not less than two-thirds of
the Whole Board of Directors,  including a majority of the Continuing Directors,
and any such amendment,  change or repeal so recommended  shall require only the
vote,  if any,  required  under  the  applicable  provisions  of the Act,  these
Articles of Incorporation and the Bylaws of the Corporation.

         E. STATE LAW ELECTION. The Corporation hereby elects not to be governed
by Chapter 43 of the Act or any successor provision thereto.


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<PAGE> 31


                                   ARTICLE XI

       RESTRICTIONS ON OFFERS AND ACQUISITIONS OF THE CORPORATION'S EQUITY
                                   SECURITIES

         A.  RESTRICTIONS.  The  definitions  and other  provisions set forth in
Article X are also applicable to this Article XI. For a period of five (5) years
from the  completion  of the  reorganization  of the Savings Bank into the stock
holding  company  structure,  no Person shall  directly or  indirectly  Offer to
acquire or acquire the  Beneficial  Ownership of (i) more than 10% of the issued
and outstanding shares of any class of an equity security of the Corporation, or
(ii) any securities  convertible into, or exercisable for, any equity securities
of the  Corporation  if,  assuming  conversion or exercise by such Person of all
securities of which such Person is the  Beneficial  Owner which are  convertible
into,  or  exercisable  for,  such  equity  securities  (but  of  no  securities
convertible  into,  or  exercisable  for,  such equity  securities of which such
Person is not the Beneficial  Owner),  such Person would be the Beneficial Owner
of more than 10% of any class of an equity security of the Corporation.

         B. EXCLUSIONS.  The foregoing  restrictions  shall not apply to (i) any
Offer with a view toward public resale made  exclusively  to the  Corporation by
underwriters  or a selling  group acting on its behalf,  (ii) any tax  qualified
employee  benefit plan or  arrangement  established  by the  Corporation  or the
Savings Bank and any trustee of such a plan or arrangement,  and (iii) any other
Offer or acquisition  approved in advance by the affirmative  vote of two-thirds
of the Corporation's Board of Directors.

         C. REMEDIES. In the event that shares are acquired in violation of this
Article XI, all shares  Beneficially  Owned by any Person in excess of 10% shall
be  considered  "Excess  Shares" and shall not be counted as shares  entitled to
vote and  shall  not be voted by any  Person  or  counted  as  Voting  Shares in
connection with any matters  submitted to stockholders for a vote, and the Board
of Directors may cause such Excess Shares to be  transferred  to an  independent
trustee  for sale on the open  market or  otherwise,  with the  expenses of such
trustee to be paid out of the proceeds of the sale.

         D.  EXPIRATION.  Article XI of these  Articles of  Incorporation  shall
expire and, along with all references thereto, no longer be a part hereof on the
fifth  anniversary of the completion of the  reorganization  of the Savings Bank
into the stock holding company structure.

         E. BOARD POWER.  The Board of Directors of the  Corporation  shall have
the power to construe  and apply the  provisions  of this Article XI and to make
all  determinations   necessary  or  desirable  to  implement  such  provisions,
including but not limited to matters with respect to (i) the number of shares of
any class of equity  securities  of the  Corporation  Beneficially  Owned by any
Person; (ii) whether a Person is an Affiliate of another; (iii) whether a Person
has an agreement, arrangement or understanding with another as to the Beneficial
Ownership of any shares of any class of equity  securities  of the  Corporation;
(iv)


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<PAGE> 32


the application of any other  definition or operative  provision of this Article
XI to the given facts; or (v) any other matter relating to the  applicability of
this Article XI.

                                   ARTICLE XII

                AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

         A. ARTICLES OF  INCORPORATION.  The  Corporation  reserves the right to
amend,  alter,  change or repeal any  provision  contained in these  Articles of
Incorporation,  in the manner now or hereafter prescribed by law, and all rights
conferred upon stockholders  herein are granted subject to this reservation.  No
amendment,   addition,  alteration,  change  or  repeal  of  these  Articles  of
Incorporation  shall  be made  unless  it is  first  approved  by the  Board  of
Directors of the Corporation pursuant to a resolution adopted by the affirmative
vote of a majority of the directors  then in office,  and thereafter is approved
by the holders of a majority of the shares of the  Corporation  entitled to vote
generally in an election of directors, voting together as a single class, unless
any class or series of shares is entitled to vote  thereon as a class,  in which
event the proposed  amendment  shall be adopted upon  receiving the  affirmative
vote of the holders of a majority  of the shares  within each class or series of
outstanding  shares  entitled  to  vote  thereon  as a class  and of at  least a
majority of the total  outstanding  shares  entitled to vote  thereon,  provided
that,  notwithstanding  anything contained in these Articles of Incorporation to
the contrary,  (i) the affirmative vote of the holders of at least two-thirds of
the shares of the  Corporation  entitled  to vote  generally  in an  election of
directors,  voting  together  as a single  class,  unless any class or series of
shares is  entitled  to vote  thereon as a class,  in which  event the  proposed
amendment shall be adopted upon receiving the affirmative vote of the holders of
two-thirds  of the  shares  within  each class or series of  outstanding  shares
entitled  to vote  thereon  as a class and of at least  two-thirds  of the total
outstanding shares entitled to vote thereon,  shall be required to amend, adopt,
alter, change or repeal any provision  inconsistent with Articles VI, VII, VIII,
IX, XI and this  Article  XII, and (ii) Article X shall be amended in the manner
specified in Article X.D.

         B. BYLAWS. The Board of Directors may adopt, alter, amend or repeal the
Bylaws of the  Corporation.  Such action by the Board of Directors shall require
the  affirmative  vote of a  majority  of the  directors  then in  office at any
regular or special  meeting of the Board of  Directors.  Stockholders  shall not
have any power to make, alter, amend or repeal the Corporation's  Bylaws, except
as set forth in the Bylaws.


                                       24


<PAGE> 33


         I, THE  UNDERSIGNED,  being  the duly  authorized  President  and Chief
Executive Officer of Community Savings Bank, F.S.B., the sole incorporator,  for
the purpose of forming a corporation  pursuant to the act do make these Articles
of  Incorporation,  hereby affirming under the penalties of perjury that this is
my act and deed on behalf of Community  Savings Bank,  F.S.B. and that the facts
herein stated are true, and  accordingly  have hereunto set my hand this 7th day
of December 1994.

                                   COMMUNITY SAVINGS BANK, F.S.B.



                                   By:     /s/  Robert E. Yates
                                   Name:   Robert E. Yates
                                   Title:  President and Chief Executive
                                           Officer







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