EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
DIVERSIFIED SENIOR SERVICES, INC.
The undersigned, hereby submits these Articles of Incorporation for the
purpose of forming a business corporation under and by virtue of the laws of the
State of North Carolina, as contained in Chapter 55 of the General Statutes of
North Carolina, entitled the "NORTH CAROLINA BUSINESS CORPORATION ACT," and to
that end does hereby set forth:
ARTICLE ONE
The name of the Corporation is DIVERSIFIED SENIOR SERVICES, INC.
ARTICLE TWO
The Corporation shall have authority to issue two classes of stock, and the
total number authorized shall be One Hundred Million (100,000,000) shares of
Common Stock, and One Hundred Million (100,000,000) shares of Preferred Stock. A
description of the different classes of stock of the Corporation and a statement
of the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof in respect of each class of
stock are as follows:
1. ISSUANCE IN SERIES. The Common or Preferred Stock may be issued from
time to time in one or more series, or either or both of the Common or Preferred
Stock may be divided into additional classes and such classes into one or more
series. The terms of a class or series shall be as specified in the resolution
or resolutions adopted by the Board of Directors providing for the issue of such
class or series, which resolution or resolutions the Board of Directors is
hereby expressly authorized to adopt. Such resolution or resolutions with
respect to a class or series shall specify, if applicable: (a) the number of
shares to constitute such class or series and the distinctive designation
thereof; (b) the annual dividend rate, if any, on the shares of such class or
series and the date or dates from which dividends shall accrue, whether such
dividends shall be cumulative, and, if cumulative, the date or dates from which
dividends shall accumulate; (c) the time or times and price or prices of
redemption, if any, of the shares; (d) the terms and conditions of a retirement
or sinking fund, if any, for the purchase or redemption of the shares; (e) the
amount which the shares shall be entitled to receive in the event of any
liquidation, dissolution or winding up of the Corporation; (f) the terms and
conditions, if any, on which the shares shall be convertible into, or
exchangeable for, shares of any other class or classes, or other series of the
same or another class, of the Corporation; (g) the voting rights, if any, in
addition to those granted herein; (h) the conditions and restrictions, if any,
on the payment of dividends or on the making of other distributions on, or the
purchases, redemption or other acquisition by the Corporation or any subsidiary,
of Common Stock or of any other class or series of shares of the Corporation
ranking junior to any shares as to dividends or upon liquidation; (i) the
conditions, if any, on the creation of indebtedness of the Corporation, or any
subsidiary; (j) the par value, if any, of such class or series; and (k) such
other preferences, rights, restrictions and qualifications as shall not be
inconsistent herewith. In the absence of a resolution establishing any class or
series, all shares shall rank equally and be identical in all respects. At all
times that shares of the Corporation are outstanding, there shall be outstanding
one or more shares that together have unlimited voting rights and one or more
shares that together are entitled to receive the net assets of the Corporation
upon dissolution.
All shares of the Common Stock shall rank equally and all shares of the
Preferred Stock shall rank equally, and be identical within their classes in all
respects regardless of series, except as to terms which may be specified by the
Board of Directors pursuant to the above provisions. All shares of any one
series of a class of Common or Preferred Stock shall be of equal rank and
identical in all respects, except that shares of any one series issued at
different times may differ as to the dates which dividends thereon shall accrue
and be cumulative.
2. PREFERENCE AS TO DIVIDENDS. The resolution or resolutions adopted by the
Board of Directors providing for the issue of a class or series of Preferred
Stock may provide that the holders of such Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors, but only out of funds
legally available for the payment of dividends, cash dividends at the annual
rate for each particular series as herein provided or as may be fixed by the
Board of Directors in such resolution or resolutions, and no more, payable on
the dates fixed therefor to the shareholders of record on the respective dates
set or determined as provided in the North Carolina Business Corporation Act for
the purpose set by the Board of Directors in advance of payment of each
particular dividend.
3. PREFERENCE ON LIQUIDATION, DISSOLUTION OR WINDING UP. In the event of
any liquidation, dissolution or winding up of the Corporation, before any
payment or distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Common Stock, the
holders of the shares of each series of Preferred Stock shall be entitled to
receive the payment, if any, at the rate fixed or determined as provided in any
resolution or resolutions adopted by the Board of Directors providing for the
issue of such series. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of the shares of Preferred Stock shall be insufficient to pay
in full the preferential amount aforesaid, then such assets or the proceeds
thereof shall be distributed among such holders ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full. For the purposes of this paragraph, neither the
merger nor consolidation of the Corporation into or with any other corporation,
nor the voluntary sale, conveyance, exchange or transfer (for cash, shares of
stock, securities, or other consideration) of all or substantially all of the
property or assets of the Corporation shall be deemed a liquidation of the
Corporation.
4. REDEMPTION OF PREFERRED STOCK. The Corporation may redeem the Common and
Preferred Stock of any series at the time outstanding at the times, in the
amounts, in the manner and at the price or prices fixed or determined as
provided in any resolution or resolutions adopted by the Board of Directors
providing for the issue of such shares, including the amount of the premium, if
any, payable upon such redemption. In case of the redemption of only a portion
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of any class or series of Common or Preferred Stock at the time outstanding, the
shares of such class or series so to be redeemed may be selected by lot or in
such other manner as the Board of Directors may determine. To the extent not
otherwise specified herein, the Board of Directors shall have full power and
authority to prescribe the terms and conditions upon which the Common and
Preferred Stock shall be redeemed from time to time.
5. CONVERSION. The shares of Common and Preferred Stock of any series may
be designated as convertible into, or exchangeable for, shares of any other
class or series of shares of the Corporation upon such terms and conditions as
shall be fixed or determined by the Board of Directors in any resolution
providing for the issue of any shares of Common or Preferred Stock.
6. COMMON STOCK JUNIOR TO PREFERRED STOCK. The Common Stock is junior to
the Preferred Stock and is subject to all the rights, privileges, preferences
and priorities of the Preferred Stock as herein set forth or as may be stated or
determined as provided in any resolution or resolutions of the Board of
Directors providing for the issue of Preferred Stock.
7. DIVIDENDS. Subject to the prior and superior right of the Preferred
Stock, and subject to the provisions and on the conditions set forth herein and
in the NORTH CAROLINA BUSINESS CORPORATION ACT, or in any resolution or
resolutions providing for the issue of a series of Preferred Stock, such
dividends (payable in cash stock, property or otherwise) as may be determined by
the Board of Directors may be declared and paid on the Common Stock from time to
time.
8. LIQUIDATION, DISSOLUTION, OR WINDING UP. In the event of any
liquidation, dissolution or winding up of the affairs of the Corporation, after
payment to the holders of Preferred Stock of the amount to which they are
entitled pursuant to any resolution or resolutions of the Board of Directors
providing for the issue of a series of Preferred Stock, the holders of Common
Stock shall be entitled to share ratably in all assets then remaining subject to
distribution to the shareholders.
9. GENERAL VOTING RIGHTS. Except when otherwise required by law or
otherwise provided herein or in any resolution of the Board of Directors
providing for the issuance of any particular class or series of Preferred Stock,
the exclusive voting power of the Corporation shall be vested in the Common
Stock of the Corporation. Unless otherwise provided in the resolution or
resolutions adopted by the Board of Directors providing for the issue of any
shares of Common Stock, each share of Common Stock shall entitle the holder
thereof to one vote at all meetings of the shareholders of the Corporation.
10. OTHER PROVISIONS. In addition to the rights granted above in this
Article, shares of Common or Preferred Stock of any class or series may be
issued with such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative participating, option or special rights,
and qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issue of such stock
adopted by the Board of Directors. Any of the voting powers, designations,
preferences, rights and qualifications, limitations or restrictions of any such
class or series of shares may be made dependent upon facts ascertainable outside
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the resolution or resolutions of the Board of Directors providing for the issue
of such shares by the Board of Directors provided the manner in which such facts
shall operate upon the voting powers, designations, preferences, rights and
qualifications, limitations or restrictions of such class or series is clearly
set forth in the resolution or resolutions providing for the issue of such
shares adopted by the Board of Directors.
ARTICLE THREE
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The number of Directors
of the Corporation constituting the entire Board of Directors shall be no less
than three (3) nor more than twelve (12), with the actual number constituting
the entire Board of Directors at any given time to be established by resolution
adopted from time to time by the Board of Directors. No decrease in the number
of Directors constituting the Board of Directors shall shorten the term of any
incumbent director. The Board of Directors shall be staggered by division into
three (3) classes, each class to be as nearly equal in number as possible, with
the term of office of Directors of the first class to expire at the first annual
meeting of shareholders after their appointment by the Incorporator, the term of
office of Directors of the second class to expire at the second annual meeting
after their appointment by the Incorporator, and the term of office of Directors
of the third class to expire at the third annual meeting of shareholders after
their appointment by the Incorporator. At each annual meeting of shareholders
after such classification and appointment or election, the number of Directors
equal to the number in the class whose term expires at the time of such meeting
shall be elected to hold office until the third succeeding annual meeting of
shareholders. No election of directors need be by written ballot. Determination
of the number and qualification of any independent directors who may serve on
the Board of Directors (the "Independent Directors") shall be made in accordance
with the Bylaws of the Corporation.
ARTICLE FOUR
In addition to any vote of shareholders otherwise required by law or by the
terms of any other provision of these Articles of Incorporation, the affirmative
vote of at least eighty percent (80%) of the votes entitled to be cast thereon
by the holders of each series of outstanding shares of Common and Preferred
Stock shall be required for the approval of any Business Combination (as
hereinafter defined) between the Corporation and any Interested Shareholder (as
hereinafter defined), unless in connection with the Business Combination the
holders of Common and Preferred Stock will receive cash in exchange for their
shares in an amount not less than the highest per share price paid by the
Interested Shareholder in acquiring any of its holdings in the Corporation's
stock, regardless of class or series.
1. BUSINESS COMBINATION DEFINED. For purposes of this Article, "Business
Combination" shall meant (i) any merger, consolidation or share exchange
involving the Corporation and an Interested Shareholder, (ii) any sale, lease or
exchange of all or substantially all of the property or assets of the
Corporation to an Interested Shareholder, (iii) any sale, lease or exchange
(other than of shares of stock of the Corporation) of all or substantially all
of the
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property or assets of an Interested Shareholder to the Corporation or a
subsidiary of the Corporation, (iv) the issuance of any securities by the
Corporation or a subsidiary of the Corporation to an Interested Shareholder, (v)
the acquisition by the Corporation or a subsidiary of the Corporation of any
securities issued by an Interested Shareholder, (vi) any reclassification of the
stock of the Corporation or any recapitalization involving such stock
consummated within five (5) years after an Interested Shareholder becomes an
Interested Shareholder, and (vii) any agreement, contract or other arrangement
providing for any of the foregoing transactions.
2. INTERESTED SHAREHOLDER DEFINED. For purposes of this Article, the term
"Interested Shareholder" shall mean (i) any individual, corporation, partnership
or other person or entity that together with its "affiliates" and "associates"
(as defined in Rule 12b-2 of the Securities Exchange Act of 1934) "beneficially"
owns (as defined in Rule 13-D-3 of the Securities Exchange Act of 1934) in the
aggregate twenty percent (20%) or more of any class or series of the outstanding
shares of the Corporation, (ii) any "affiliate" or "associate" of such
individual, corporation, partnership or other person or entity, and (iii) any
person or entity that, within two (2) years after an Interested Shareholder
becomes an Interested Shareholder, is assigned or succeeds to such Interested
Shareholder's beneficial ownership of any of the shares of the Corporation, if
such assignment or succession occurred in the course of a transaction or series
of transactions not involving a public offering under the Securities Act of
1933.
3. PRICE ADJUSTMENT. For purposes of this Article, the price per share of
the stock of the Corporation shall be adjusted to reflect stock dividends, stock
splits and any similar reclassification of the Corporation or any
recapitalization involving any shares of the Corporation.
4. APPLICABILITY. The requirements of this Article shall not apply if the
Business Combination is approved by a majority of the Corporation's
Disinterested Directors. For purposes of these Articles of Incorporation, the
term "Disinterested Directors" shall mean those Directors of the Corporation
each of whom was a member of the Board of Directors of the Corporation
immediately prior to the time that any Interested Shareholder became an
Interested Shareholder and each of whom is unaffiliated with, and not a nominee
of, an Interested Shareholder, and shall include any successor of a
Disinterested Director who is recommended by a majority of Disinterested
Directors then on the Board of Directors.
5. DISCRETION OF THE BOARD OF DIRECTORS. A majority of the Disinterested
Directors shall have the power and duty to determine, on the basis of
information known to them after such inquiry as they deem reasonable, all facts
they deem necessary to effect compliance with this Article, and the good faith
determination of a majority of the Disinterested Directors on such matters shall
be conclusive and binding for all purposes of this Article.
6. AMENDMENT. This Article may not be repealed or amended in any respect,
and no provision inconsistent herewith may be adopted, unless such action is
approved (i) if no Interested Shareholder exists on the record date for
determining shareholders entitled to vote on such repeal or amendment, by the
affirmative vote of the holders of not less than a majority of the outstanding
shares of each series of shares of the Corporation entitled to vote, or
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such greater vote as may be required by applicable law, or (ii) if an Interested
Shareholder exists on the record date for determining shareholders entitled to
vote on such repeal or amendment, by the affirmative vote of the holders of not
less than eighty percent (80%) of the outstanding shares of each series of
shares of the Corporation entitled to vote, or such greater vote as may be
required by applicable law.
ARTICLE FIVE
The following additional provisions, including certain matters in
connection with holding shares of the Corporation, are adopted for the
regulation of the internal affairs of the Corporation:
1. FURTHER POWERS OF THE BOARD OF DIRECTORS. In furtherance and not in
limitation of the powers conferred by applicable law, the Board of Directors is
expressly authorized to do any and all of the following:
(a) To restrict the transfer of shares in the manner provided for in these
Articles of Incorporation or the Bylaws;
(b) To authorize, subject to shareholder approval, if any, and other
conditions, if any, as are required by any applicable statute, rule or
regulation, the execution and performance by the Corporation of one or more
agreements with any person, corporation, association, company, trust,
partnership (limited or general) or other organization whereby, subject to the
supervision and control of the Board of Directors, any such other person,
corporation, association, company, trust, partnership (limited or general), or
other organization shall render or make available to the Corporation managerial,
investment advisory and/or related services office space and other services and
facilities (including, if deemed advisable by the Board of Directors, the
management or supervision of the investments of the Corporation) upon such terms
and conditions as may be provided in such agreement or agreements (including, if
deemed fair and reasonable by the Board of Directors, the compensation payable
thereunder by the Corporation);
(c) To authorize any agreement of the character described in subparagraph
1(b) of this Article or other transaction with any person, corporation,
association, company, trust, partnership (limited or general), or other
organization, even though one or more of the members of the Board of Directors
or Officers of the Corporation may be the other party to any such agreement or
an officer, director, shareholder, affiliate or member of such other party, and
no such agreement or transaction shall be invalidated or rendered voidable
solely by reason of the existence of any such relationship if (1) the existence
is disclosed or known: (i) to the Board of Directors, and the Board of Directors
authorizes approves or ratifies the agreement or transaction by the affirmative
vote of a majority of the Board of Directors, including the affirmative vote of
a majority of all Independent directors; or (ii) to the shareholders entitled to
vote and the agreement or transaction is authorized, approved or ratified by a
majority of votes cast by such shareholders without regard to the votes of
shares owned of record or beneficially by the Directors interested therein or
such other party; or (2) the Board of Directors determines in good faith, by
means of review, appraisal or other determination by members of the Board of
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Directors, agents of the Corporation or otherwise, that the contract is fair and
reasonable to the Corporation; provided, however, that the disclosure,
ratification and fairness provisions of this subparagraph are satisfied, any
member of the Board of Directors who is also a director or officer of such other
party or who is so interested or associated with such other party may be counted
in determining the existence of a quorum at any meeting of the Board of
Directors which shall authorize any such agreement or transaction, and may vote
thereat to authorize any such agreement or transaction, as if the Director were
not such director or officer of such other party or not so interested or
associated;
(d) To allot and authorize the issuance of the authorized but unused shares
of the Corporation for such consideration as the Board of Directors may deem
advisable, subject to such limitations as may be set forth in these Articles of
Incorporation or in the NORTH CAROLINA BUSINESS CORPORATION ACT or other
applicable law and subject to the condition that all shares issued by the
Corporation shall at all times be fully paid and nonassessable;
(e) To authorize the issuance and fix the terms, conditions, and provisions
of options to purchase or subscribe for shares of the Corporation, including the
option price or prices for which shares of the Corporation may be purchased or
subscribed;
(f) To re-adopt, amend or repeal the original or other Bylaws of the
Corporation or any specific provisions thereof, regardless of any prior
shareholder action with respect thereto; and
(g) To sell, lease, exchange, contribute or otherwise dispose of all or
substantially all of the Corporation's property to a corporation, all the shares
of which are owned by the Corporation, without the necessity of any shareholder
approval.
2. The determination as to any of the following matters made by or pursuant
to the direction of the Board of Directors consistent with these Articles of
Incorporation and in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties, shall be final and conclusive and
shall be binding upon the Corporation and every holder of shares of the
Corporation, namely, the amount of net income of the Corporation for any period
and the amount of net assets in excess of capital, undivided profits or excess
of profits over losses on sales of assets; the amount, purpose, time of
creation, increase or decrease, alteration or cancellation of any reserves or
charges and the propriety thereof (whether or not any obligation or liability
for which such reserves or charges shall have been created shall have been paid
or discharged); the fair value, or any sale, bid or asked price to be applied in
determining the fair value, of any asset owned or held by the Corporation; and
any matter relating to the acquisition, holding and disposition of any assets by
the Corporation.
3. The enumeration and definition of particular powers of the board of
Directors included in the foregoing shall in no way be limited or restricted by
reference to or inference from the terms of any other clause of this or any
other provision of these Articles of Incorporation, or construed as or deemed by
inference or otherwise in any manner to exclude or
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limit the powers conferred upon the Board of Directors under the NORTH
CAROLINA BUSINESS CORPORATION ACT, as it now exists or may hereafter be amended.
ARTICLE SIX
To the fullest extent permitted by applicable law, as it now exists or may
hereafter be amended, the Corporation shall indemnify all persons serving as
Directors and Officers of the Corporation against all liability and litigation
expense, including but not limited to reasonable attorneys' fees, arising out of
their status as such or their activities in the foregoing capacities, regardless
of when such status existed or activity occurred and regardless of whether or
not they are Directors or Officers of the Corporation at the time such
indemnification is sought or obtained. Without limiting the generality of the
foregoing, such persons may also recover from the Corporation all reasonable
costs, expense and attorneys' fees in connection with the enforcement of rights
to indemnification granted by this Article. The provisions of this Article are
in addition to and not in limitation of the power of the Corporation with
respect to, and the rights of any Director or Officer of the Corporation to
receive the benefit of, any other or further indemnification, insurance,
elimination of liability or other right or benefit which is either required by
the NORTH CAROLINA BUSINESS CORPORATION ACT or permitted thereby and duly
adopted by the Corporation in accordance therewith.
ARTICLE SEVEN
To the fullest extent permitted by applicable law, as it now exists or may
hereafter be amended, no Director of the Corporation shall have any personal
liability arising out of any action, whether by or in the right of the
Corporation or otherwise, for monetary damages for breach of his or her duty as
a Director. This Article shall not impair any right to receive indemnity or
insurance from the Corporation or any third party which any Director may now or
hereafter have. Any repeal or modification of this Article shall not impair or
otherwise adversely affect any limitation on, or elimination of, the personal
liability of a Director effected hereby with respect to acts or omissions
occurring prior to such repeal or modification.
ARTICLE EIGHT
Neither the provisions of Article 9 of the NORTH CAROLINA BUSINESS
CORPORATION ACT, entitled "The North Carolina Shareholder Protection Act"
(N.C.G.S. Section 55-9-1 ET SEQ.), nor the provisions of Article 9A of the NORTH
CAROLINA BUSINESS CORPORATION ACT, entitled "The North Carolina Control Share
Acquisition Act" (N.C.G.S. Section 55-9A-01 ET SEQ.), shall be applicable to the
Corporation.
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ARTICLE NINE
The address of the initial registered office of the Corporation is 915 West
Fourth Street, Winston-Salem, Forsyth County, North Carolina 27101, and the name
of the initial registered agent at such address is Susan L. Christiansen.
ARTICLE TEN
The name and address of the Incorporator are:
NAME ADDRESS
Susan L. Christiansen 915 West Fourth Street
Winston Salem, NC 27101
ARTICLE ELEVEN
From time to time any of the provisions of these Articles of Incorporation
may be amended, altered or repealed, and other provisions authorized by, and
laws of the State of North Carolina at the time in force may be added or
inserted in the manner and at the time prescribed by said laws, subject to
compliance with all limitations, required votes of shares and other requirements
called for by these Articles of Incorporation, and all rights at any time
conferred upon the shareholders.
IN WITNESS WHEREOF, I have hereunto set my hand and seal, this 15th day of
May, 1996.
INCORPORATOR:
/S/ SUSAN L. CHRISTIANSEN
Susan L. Christiansen