Exhibit
4.2


 


Description
of Sunnyside Bancorp, Inc. Common Stock


 


Unless
otherwise indicated or the context otherwise requires, references in this Exhibit 4.2 to “we, “us” and “our”
refer collectively to Sunnyside Bancorp, Inc. and Sunnyside Federal Savings and Loan Association of Irvington (“Sunnyside
Federal”)or to any of those entities, depending on the context. 


 


General


 


Sunnyside
Bancorp is authorized to issue 30,000,000 shares of common stock, par value of $0.01 per share, and 1,000,000 shares of preferred
stock, par value $0.01 per share. Each share of common stock has the same relative rights as, and is identical in all respects
to, each other share of common stock. All of our shares of common stock are duly authorized, fully paid and nonassessable.


 


Common
Stock


 


Dividends.
Sunnyside Bancorp can pay dividends on its common stock if, after giving effect to the distribution, it would be able to pay its
indebtedness as the indebtedness comes due in the usual course of business and its total assets exceed the sum of its liabilities
and the amount needed, if Sunnyside Bancorp were to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of any holders of capital stock who have a preference in the event of dissolution. The holders of common
stock of Sunnyside Bancorp are entitled to receive and share equally in dividends as may be declared by our Board of Directors
out of funds legally available therefor. If Sunnyside Bancorp issues shares of preferred stock, the holders thereof may have a
priority over the holders of the common stock with respect to dividends.


 


Voting
Rights. The holders of common stock of Sunnyside Bancorp have exclusive voting rights in Sunnyside Bancorp They elect
Sunnyside Bancorp’s Board of Directors and act on other matters as are required to be presented to them under Maryland law
or as are otherwise presented to them by the Board of Directors. Generally, each holder of common stock is entitled to one vote
per share and does not have any right to cumulate votes in the election of directors. Any person who beneficially owns more than
10% of the outstanding shares of Sunnyside Bancorp’s common stock, however, is not entitled or permitted to vote any
shares of common stock held in excess of the 10% limit. If Sunnyside Bancorp issues shares of preferred stock, holders of the
preferred stock may also possess voting rights. Amendments to the articles of incorporation generally require a two-thirds vote,
and certain amendments require an 80% stockholder vote.


 


Liquidation.
In the event of any liquidation, dissolution or winding up of Sunnyside Federal, Sunnyside Bancorp, as the holder of 100% of Sunnyside
Federal’s capital stock, would be entitled to receive all assets of Sunnyside Federal available for distribution, after
payment or provision for payment of all debts and liabilities of Sunnyside Federal, including all deposit accounts and accrued
interest thereon, and after distribution of the balance in the liquidation account to “Eligible Account Holders” and
“Supplemental Eligible Account Holders” (as defined in the Plan of Conversion of Sunnyside Federal). In the event
of liquidation, dissolution or winding up of Sunnyside Bancorp, the holders of its common stock would be entitled to receive,
after payment or provision for payment of all its debts and liabilities, all of the assets of Sunnyside Bancorp available for
distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the
event of liquidation or dissolution.


 




    	 



     


    

 


Preemptive
Rights. Holders of the common stock of Sunnyside Bancorp are not entitled to preemptive rights with respect to any shares
that may be issued, unless such preemptive rights are approved by the Board of Directors. The common stock is not subject to redemption.


 


Preferred
Stock


 


None
of the shares of Sunnyside Bancorp’s authorized preferred stock are outstanding. Preferred stock may be issued with preferences
and designations as our Board of Directors may from time to time determine. Our Board of Directors may, without stockholder approval,
issue shares of preferred stock with voting, dividend, liquidation and conversion rights that could dilute the voting strength
of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.


 


Sunnyside
Bancorp’s Articles of Incorporation and Bylaws


 


Sunnyside
Bancorp’s articles of incorporation and bylaws contain a number of provisions relating to corporate governance and rights
of stockholders that might discourage future takeover attempts. As a result, stockholders who might desire to participate in such
transactions may not have an opportunity to do so. In addition, these provisions will also render the removal of the Board of
Directors or management of Sunnyside Bancorp more difficult.


 


Directors.
The Board of Directors is divided into three classes. The members of each class are elected for a term of three years and only
one class of directors is elected annually. Thus, it would take at least two annual elections to replace a majority of our directors.
The bylaws establish qualifications for board members, including restrictions on affiliations with competitors of Sunnyside Federal
and prior legal or regulatory violations and a requirement that board members maintain residence within ten miles of an office
of Sunnyside Bancorp or Sunnyside Federal for a period of at least one year immediately before his or her nomination or appointment
to the Board of Directors. Further, the bylaws impose notice and information requirements in connection with the nomination by
stockholders of candidates for election to the Board of Directors or the proposal by stockholders of business to be acted upon
at an annual meeting of stockholders. Such notice and information requirements are applicable to all stockholder business proposals
and nominations, and are in addition to any requirements under the federal securities laws.


 


Evaluation
of Offers. The articles of incorporation of Sunnyside Bancorp provide that its Board of Directors, when evaluating a transaction
that would or may involve a change in control of Sunnyside Bancorp (whether by purchases of its securities, merger, consolidation,
share exchange, dissolution, liquidation, sale of all or substantially all of its assets, proxy solicitation or otherwise), may,
in connection with the exercise of its business judgment in determining what is in the best interests of Sunnyside Bancorp and
its stockholders and in making any recommendation to the stockholders, give due consideration to all relevant factors, including,
but not limited to:


 


	 	●	the
    economic effect, both immediate and long-term, upon Sunnyside Bancorp’s stockholders, including stockholders, if any,
    who do not participate in the transaction;
	 	 	 
	 	●	the
    social and economic effect on the present and future employees, creditors and customers of, and others dealing with, Sunnyside
    Bancorp and its subsidiaries and on the communities in which Sunnyside Bancorp and its subsidiaries operate or are located;
	 	 	 
	 	●	whether
    the proposal is acceptable based on the historical, current or projected future operating results or financial condition of
    Sunnyside Bancorp;



 






    	 



     


    

 


	 	●	whether
    a more favorable price could be obtained for Sunnyside Bancorp’s stock or other securities in the future;
	 	 	 
	 	●	the
    reputation and business practices of the other entity to be involved in the transaction and its management and affiliates
    as they would affect the employees of Sunnyside Bancorp and its subsidiaries;
	 	 	 
	 	●	the
    future value of the stock or any other securities of Sunnyside Bancorp or the other entity to be involved in the proposed
    transaction;
	 	 	 
	 	●	any
    antitrust or other legal and regulatory issues that are raised by the proposal;
	 	 	 
	 	●	the
    business and historical, current or expected future financial condition or operating results of the other entity to be involved
    in the transaction, including, but not limited to, debt service and other existing financial obligations, financial obligations
    to be incurred in connection with the proposed transaction, and other likely financial obligations of the other entity to
    be involved in the proposed transaction; and
	 	 	 
	 	●	the
    ability of Sunnyside Bancorp to fulfill its objectives as a financial institution holding company and on the ability of its
    subsidiary financial institution(s) to fulfill the objectives of a federally insured financial institution under applicable
    statutes and regulations. 








 


If
the Board of Directors determines that any proposed transaction should be rejected, it may take any lawful action to defeat such
transaction.


 


Restrictions
on Call of Special Meetings. The bylaws provide that special meetings of stockholders can be called by only the Chairperson
or Vice Chairperson of the board of directors, a majority of the total number of directors that Sunnyside Bancorp would have if
there were no vacancies on the board of directors, or the Secretary upon the written request of stockholders entitled to cast
at least a majority of all votes entitled to vote at the meeting..


 


Prohibition
of Cumulative Voting. The articles of incorporation prohibit cumulative voting for the election of directors.


 


Limitation
of Voting Rights. The articles of incorporation provide that in no event will any person who beneficially owns more than
10% of the then-outstanding shares of common stock be entitled or permitted to vote any of the shares of common stock held in
excess of the 10% limit; provided that such 10% limit shall not apply if a majority of the unaffiliated directors approve the
acquisition of shares in excess of the 10% limit prior to such acquisition.


 


Restrictions
on Removing Directors from Office. The articles of incorporation provide that directors may be removed only for cause,
and only by the affirmative vote of the holders of a majority of the voting power of all of our then-outstanding capital stock
entitled to vote generally in the election of directors (after giving effect to the limitation on voting rights discussed above
in “ − Limitation of Voting Rights”), voting together as a single class.


 






    	 



     


    

 


Authorized
but Unissued Shares. Sunnyside Bancorp has authorized but unissued shares of common and preferred stock. The articles
of incorporation authorize 1,000,000 shares of serial preferred stock. Sunnyside Bancorp is authorized to issue preferred stock
from time to time in one or more series subject to applicable provisions of law, and the board of directors is authorized to fix
the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms
and conditions of redemption of such shares. In addition, the articles of incorporation provide that a majority of the whole board
may, without action by the stockholders, amend the articles of incorporation to increase or decrease the aggregate number of shares
of stock of any class or series that Sunnyside Bancorp has the authority to issue. In the event of a proposed merger, tender offer
or other attempt to gain control of Sunnyside Bancorp that the board of directors does not approve, it would be possible for the
board of directors to authorize the issuance of a series of preferred stock with rights and preferences that would impede the
completion of the transaction. An effect of the possible issuance of preferred stock therefore may be to deter a future attempt
to gain control of Sunnyside Bancorp.








 


Amendments
to Articles of Incorporation and Bylaws. Except as provided under “ − Authorized but Unissued Shares,”
above, regarding the amendment of the articles of incorporation by the Board of Directors to increase or decrease the number of
shares authorized for issuance, or as otherwise allowed by law, any amendment to the articles of incorporation must be approved
by our Board of Directors and also by two-thirds of the outstanding shares of our voting stock (or a majority of the outstanding
shares of our voting stock if the amendment is approved by two-thirds of our board of directors); provided, however, that approval
by at least 80% of the outstanding voting stock is generally required to amend the following provisions:


 


	 	(i)	The
    limitation on voting rights of persons who directly or indirectly beneficially own more than 10% of the outstanding shares
    of common stock;
	 	 	 
	 	(ii)	The
    division of the board of directors into three staggered classes;
	 	 	 
	 	(iii)	The
    ability of the board of directors to fill vacancies on the board;
	 	 	 
	 	(iv)	The
    requirement that at least a majority of the voting power of the stockholders must vote to remove directors, and can only remove
    directors for cause;
	 	 	 
	 	(v)	The
    ability of the board of directors to amend and repeal the bylaws and the required stockholder vote to amend or repeal the
    bylaws; 
	 	 	 
	 	(vi)	The
    ability of the board of directors to evaluate a variety of factors in evaluating offers to purchase or otherwise acquire Sunnyside
    Bancorp;
	 	 	 
	 	(vii)	The
    authority of the board of directors to provide for the issuance of preferred stock;
	 	 	 
	 	(viii)	The
    validity and effectiveness of any action lawfully authorized by the affirmative vote of the holders of a majority of the total
    number of outstanding shares of common stock;
	 	 	 
	 	(ix)	The
    number of stockholders constituting a quorum or required for stockholder consent;
	 	 	 
	 	(x)	The
    provision regarding stockholder proposals and nominations;
	 	 	 
	 	(xi)	The
    indemnification of current and former directors and officers, as well as employees and other agents, by Sunnyside Bancorp;
    
	 	 	 
	 	(xii)	The
    limitation of liability of officers and directors to Sunnyside Bancorp for money damages; and
	 	 	 
	 	(xiii)	The
    provision of the articles of incorporation requiring approval of at least 80% of the outstanding voting stock to amend the
    provisions of the articles of incorporation set forth in (i) through (xii) of this list and the provisions related to amendment
    of the articles of incorporation.


 




    	 



     


    

 


The
articles of incorporation also provide that the bylaws may be amended by the affirmative vote of a majority of the total number
of directors that Sunnyside Bancorp would have if there were no vacancies on the board of directors or by the stockholders by
the affirmative vote of at least 80% of the votes entitled to be cast in the election of directors (after giving effect to the
limitation on voting rights discussed above in “ – Limitation of Voting Rights”).


 


Maryland
Corporate Law


 


Under
Maryland law, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate
of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes
an interested stockholder. These business combinations include a merger, consolidation, statutory share exchange or, in circumstances
specified in the statute, certain transfers of assets, certain stock issuances and transfers, liquidation plans and reclassifications
involving interested stockholders and their affiliates or issuance or reclassification of equity securities. Maryland law defines
an interested stockholder as: (i) any person who beneficially owns 10% or more of the voting power of a corporation’s voting
stock after the date on which the corporation had 100 or more beneficial owners of its stock; or (ii) an affiliate or associate
of the corporation at any time after the date on which the corporation had 100 or more beneficial owners of its stock who, within
the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding
voting stock of the corporation. A person is not an interested stockholder under the statute if the board of directors approved
in advance the transaction by which the person otherwise would have become an interested stockholder. However, in approving a
transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval,
with any terms and conditions determined by the board.


 


After
the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must
be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: (i) 80% of the votes
entitled to be cast by holders of outstanding shares of voting stock of the corporation and (ii) two-thirds of the votes entitled
to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with
whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
These super-majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as
defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by
the interested stockholder for its shares.


 


Change
in Control Regulations


 


Under
the Change in Bank Control Act, no person may acquire control of an insured savings association or its parent holding company
unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the
proposed acquisition. The Federal Reserve Board takes into consideration certain factors, including the financial and managerial
resources of the acquirer and the competitive effects of the acquisition. In addition, federal regulations provide that no company
may acquire control of a savings association without the prior approval of the Federal Reserve Board. Any company that acquires
such control becomes a “savings and loan holding company” subject to registration, examination and regulation by the
Federal Reserve Board.








 


Control,
as defined under federal law, means ownership, control of or holding irrevocable proxies representing more than 25% of any class
of voting stock, control in any manner of the election of a majority of the company’s directors, or a determination by the
Federal Reserve Board that the acquirer has the power to direct, or directly or indirectly exercise a controlling influence over,
the management or policies of the institution. Acquisition of more than 10% of any class of a savings and loan holding company’s
voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances including where,
as is the case with Sunnyside Bancorp, the issuer has registered securities under Section 12 of the Securities Exchange Act of
1934. Federal Reserve Board regulations provide that parties seeking to rebut control will be provided an opportunity to do so
in writing.


 


Benefit
Plans


 


In
addition to the provisions of Sunnyside Bancorp’s articles of incorporation and bylaws described above, benefit plans of
Sunnyside Bancorp and Sunnyside Federal that may authorize the issuance of equity to its board of directors, officers and employees
contain or may contain provisions which also may discourage hostile takeover attempts which the board of directors of Sunnyside
Federal might conclude are not in the best interests of Sunnyside Bancorp and Sunnyside Federal or Sunnyside Bancorp’s stockholders.