EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
CAROLINA FINCORP, INC.
ARTICLE I
The name of the corporation is Carolina Fincorp, Inc. (the "Corporation").
ARTICLE II
SECTION 2.1. TOTAL AUTHORIZED SHARES OF CAPITAL STOCK. The Corporation
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shall have authority to issue a total of 25,000,000 shares of capital stock,
none of which shall have any par value, divided into classes as follows:
Class Number of Shares
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Common Stock 20,000,000
Preferred Stock 5,000,000
SECTION 2.2. COMMON STOCK. The shares of Common Stock shall be of one and
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the same class. Subject to the rights of holders of the Preferred Stock as
determined by the Board of Directors pursuant to Section 2.3 hereof and by the
North Carolina Business Corporation Act ("NCBCA") as now constituted or
hereafter amended, the holders of shares of Common Stock shall have one vote per
share on all matters on which holders of shares of Common Stock are entitled to
vote and shall be entitled to participate pro rata after preferential rights of
holders of Preferred Stock in the distribution of the net assets of the
Corporation upon dissolution.
SECTION 2.3. PREFERRED STOCK. The shares of Preferred Stock may be issued
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from time to time by the Corporation, and the Board of Directors may create and
divide such shares into series within that class, and such shares and the shares
of each such series shall have such voting powers, full or limited, or no voting
powers, and such designations, preferences, limitations and relative rights (or
qualifications, conditions or restrictions thereon) as the Board of Directors
may and hereby is authorized to determine.
ARTICLE III
The street address and county of the initial registered office of the
Corporation is 115 South Lawrence Street, Rockingham, Richmond County, North
Carolina 28379. The mailing address of the initial registered office of the
Corporation is Post Office Box 1597, Rockingham, North Carolina 28380-1597. The
name of the initial registered agent is R. Larry Campbell.
ARTICLE IV
The names and addresses of the incorporators are as follows:
Name Address
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J. Stanley Vetter 1424 Cumberland Circle
Rockingham, North Carolina 28379
John T. Page, Jr. P.O. Box 306
Rockingham, North Carolina 28380
E. E. Vuncannon, Jr. P.O. Box 56
Ellerbe, North Carolina 28338
Buena Vista Coggin 511 Roberdel Road
Rockingham, North Carolina 28379
Joe M. McLaurin P.O. Box 848
Rockingham, North Carolina 28380
Russell E. Bennett, Jr. P.O. Box 1268
Rockingham, North Carolina 28380
W. Jesse Spencer 720 Scotland Avenue
Rockingham, North Carolina 28379
R. Larry Campbell P.O. Box 1597
Rockingham, North Carolina 28380
ARTICLE V
To the fullest extent permitted by the NCBCA as it exists or may hereafter
be amended, no person who is serving or has served as a director of the
Corporation shall be personally liable to the Corporation or any of its
shareholders or otherwise for monetary damages for breach of any duty as a
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director. No amendment or repeal of this Article, nor the adoption of any
provision to these Articles of Incorporation inconsistent with this Article,
shall eliminate or reduce the protection granted herein with respect to any
matter that occurred prior to such amendment, repeal, or adoption. The
provisions of this Article shall not be deemed to limit or preclude
indemnification of a director by the Corporation for any liability of a director
which has not been eliminated by the provisions of this Article.
ARTICLE VI
The provisions of Article 9 and Article 9A of the NCBCA entitled "The North
Carolina Shareholder Protection Act" and "The North Carolina Control Share
Acquisition Act," respectively, shall not be applicable to the Corporation.
ARTICLE VII
SECTION 7.1. DEFINITIONS AND TERMS WITH RESPECT TO ARTICLE VII. For
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purposes of this Article VII, the following definitions shall apply:
(a) The terms "Business Combination" shall mean any transaction
in connection with (i) a combination or merger of the Corporation, (ii) the
acquisition of more than ten percent (10%) of the Corporation's outstanding
Voting Shares, or (iii) a purchase or sale of a substantial portion of the
assets of the Corporation or a Subsidiary thereof (a purchase or sale of 20% or
more of the total assets of the Corporation or a Subsidiary as of the end of the
most recent quarterly period being deemed as "substantial") in each case, as
applicable, which requires the approval of, or notice to and absence of
objection by (i) any federal or state regulatory authority of banks, savings
banks, savings and loan associations or their holding companies, (ii) the
Federal Trade Commission or the Anti-Trust Division of the United States
Department of Justice, or (iii) the shareholders of the Corporation, but
excluding any reorganization, acquisition, merger, purchase or sale of assets,
or combination initiated by the Corporation upon the vote of at least fifty-one
percent (51%) of the Continuing Directors.
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(b) The term "Continuing Director" shall mean any member of the
Board of Directors of the Corporation who is not a Related Person and is not
affiliated with the Related Person and was a member of the Board of Directors
prior to the time that the Related Person became a Related Person, and any
successor of a Continuing Director who is unaffiliated with the Related Person
and is recommended to succeed a Continuing Director by a majority of the
Continuing Directors.
(c) The term "Person" shall mean an individual, a corporation, a
limited liability company, a partnership, an association, a joint stock company,
a trust, or an unincorporated organization or similar company, and also includes
a syndicate or any group of any of the foregoing formed or acting together in
concert for the purpose of acquiring, holding or disposing of the equity
securities or assets of the Corporation or any Subsidiary.
(d) The term "Related Person" shall mean any individual,
partnership, corporation, trust or other person or entity (together with its
"affiliates" and "associates," as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "1934
Act")) which as of the date of its offer with respect to a Business Combination
is a "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act) in the
aggregate of ten percent (10%) or more of the outstanding Voting Shares of the
Corporation. A Related Person shall be deemed to have acquired a share of the
Voting Stock of the Corporation at the time when such Related Person became the
beneficial owner thereof.
(e) The term "Subsidiary" shall mean any corporation or other
entity of which the Person in question owns not less than fifty percent (50%) of
any class of equity securities, directly or indirectly.
(f) The term "Voting Shares" shall mean any shares of the
authorized stock of the Corporation entitled to vote generally in the election
of directors.
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(g) The term "Whole Board of Directors" shall mean the total
number of directors which the Corporation would have if there were no vacancies
on the Board.
SECTION 7.2. RIGHTS OF SHAREHOLDERS. The affirmative vote of the holders
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of seventy-five percent (75%) or more of the outstanding Voting Shares, voting
separately as a class, shall be required for the approval or authorization of
any Business Combination, provided, however, that the seventy-five percent (75%)
voting requirement shall not be applicable and such Business Combination may be
approved by the shareholder vote required by law and any other provision of
these Articles of Incorporation if the Business Combination is approved by the
Board of Directors of the Corporation by the affirmative vote of (a) at least
seventy-five percent (75%) of the Whole Board of Directors, and (b) if such
Business Combination is proposed by a Related Person, at least seventy-five
percent (75%) of the Continuing Directors, in either case at a duly called or
convened regular or special meeting of the Board of Directors.
SECTION 7.3. FIDUCIARY OBLIGATIONS. Nothing contained in this Article VII
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shall be construed to relieve any Related Person from any fiduciary obligation
imposed by law or equity.
SECTION 7.4. STANDARDS OF BOARD OF DIRECTORS' EVALUATION OF AN OFFER.
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The Board of Directors of the Corporation, when evaluating any offer of another
Person to effect a Business Combination shall, in connection with the exercise
of its judgment in determining what is in the best interests of the Corporation
and its shareholders, give due consideration to all relevant factors, including,
without limitation: (i) the social and economic effects of acceptance of such
offer on its depositors, borrowers, other customers, employees, and creditors of
the Corporation and its Subsidiaries, and on the communities in which the
Corporation and its Subsidiaries operate or are located; (ii) the ability of the
Corporation and its Subsidiaries to fulfill the objectives of a bank and/or
savings bank and/or savings and loan association holding company, as applicable,
and of commercial banking and/or savings bank and/or
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savings and loan entities, as applicable, under applicable federal and state
statutes and regulations; (iii) the business and financial condition and
prospects and earnings prospects of the Person or Persons proposing the Business
Combination, including, but not limited to, debt service and other existing
financial obligations, financial obligations to be incurred in connection with
the Business Combination, and other likely financial obligations of such Person
or Persons, and the possible effect of such conditions and prospects upon the
Corporation and its Subsidiaries and the communities in which the Corporation
and its Subsidiaries are located; (iv) the competence, experience, and integrity
of the Person or Persons proposing the Business Combination and its or their
management; and (v) the prospects for successful conclusion of the proposed
Business Combination. The provisions of this Article VII shall be deemed solely
to grant discretionary authority to the Board of Directors and shall not be
deemed to provide any constituency the right to be considered or to compel the
consideration of its interests.
SECTION 7.5. AMENDMENT AND REPEAL OF ARTICLE VII. Notwithstanding any
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other provision of these Articles of Incorporation or the Bylaws of the
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law) any amendment, change or repeal of this Article VII, or any
other amendment of these Articles of Incorporation which will have the effect of
modifying or permitting circumvention of this Article VII, shall require the
affirmative vote of the holders of at least seventy-five percent (75%) of the
then outstanding Voting Shares of the Corporation, voting separately as a class;
provided, however, that this restriction shall not apply to, and such seventy
five percent (75%) vote shall not be required for, any such amendment, change or
repeal recommended to shareholders of the Corporation by the affirmative vote of
at least (a) seventy-five percent (75%) of the Whole Board of Directors, and (b)
if at such time there shall be a Related Person, at least seventy-five percent
(75%) of the Continuing Directors, and in either such event such amendment,
change or repeal so recommended shall require only the vote, if any, required
under the applicable provisions of the NCBCA.
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ARTICLE VIII
SECTION 8.1. BOARD OF DIRECTORS. The number of directors of the
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Corporation shall be fixed from time to time as provided in the Corporation's
Bylaws.
In the first election of directors, and in all elections thereafter, in
which the total number of directors as fixed pursuant to the Corporation's
Bylaws is nine (9) or more, the directors shall be divided into three (3)
classes, as nearly equal as possible in number as may be, to serve in the first
instance for terms of one, two and three years, respectively, from the date such
class of directors takes office or until their earlier death, resignation,
retirement, removal or disqualification or until their successors shall be
elected and shall qualify, and thereafter the successors in each class of
directors shall be elected for terms of three (3) years or until their earlier
death, resignation, retirement, removal, or disqualification or until their
successors shall be elected and shall qualify. In the event of any increase or
decrease in the number of directors at a time that the directors are so
classified, the additional or eliminated directorships shall be classified or
chosen so that all classes of directors shall remain or become as nearly equal
as possible in number. At all times that the number of directors, as fixed
pursuant to the Corporation's Bylaws, is less than nine (9), each director shall
be elected to a term ending as of the next succeeding annual meeting of
shareholders or until his or her earlier death, resignation, retirement, removal
or disqualification or until his or her successor shall be elected and shall
qualify.
Any vacancy occurring in the Board of Directors, including without
limitation a vacancy resulting from an increase in the number of directors or
from the failure by the shareholders to elect the full authorized number of
directors, may be filled by the Board of Directors. If the directors remaining
in office do not constitute a quorum, the directors may fill the vacancy by the
affirmative vote of a majority of the remaining directors or by the sole
remaining director. If the vacant office was held by
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a director elected by voting group, only the remaining director or directors
elected by that voting group or the holders of shares of that voting group are
entitled to fill the vacancy.
SECTION 8.2. INITIAL BOARD OF DIRECTORS. The number of directors
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constituting the initial Board of Directors of the Corporation shall be eight
(8) and the names and addresses of the persons who are to serve as directors of
the Corporation until the first meeting of shareholders or until their
successors are elected and qualify are:
Name Address
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J. Stanley Vetter 1424 Cumberland Circle
Rockingham, North Carolina 28379
John T. Page, Jr. P.O. Box 306
Rockingham, North Carolina 28380
E. E. Vuncannon, Jr. P.O. Box 56
Ellerbe, North Carolina 28338
Buena Vista Coggin 511 Roberdel Road
Rockingham, North Carolina 28379
Joe M. McLaurin P.O. Box 848
Rockingham, North Carolina 28380
Russell E. Bennett, Jr. P.O. Box 1268
Rockingham, North Carolina 28380
W. Jesse Spencer 720 Scotland Avenue
Rockingham, North Carolina 28379
R. Larry Campbell P.O. Box 1597
Rockingham, North Carolina 28380
SECTION 8.3. REMOVAL OF DIRECTORS. The shareholders may remove a director
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prior to the end of the director's term only for cause.
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This the 20th day of May, 1996.
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By: /s/ J. Stanley Vetter
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J. Stanley Vetter, Incorporator
By: /s/ John T. Page, Jr.
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John T. Page, Jr., Incorporator
By: /s/ E. E. Vuncannon, Jr.
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E. E. Vuncannon, Jr., Incorporator
By: /s/ Buena Vista Coggin
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Buena Vista Coggin, Incorporator
By: /s/ Joe M. McLaurin
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Joe M. McLaurin, Incorporator
By: /s/ Russell E. Bennett, Jr.
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Russell E. Bennett, Jr., Incorporator
By: /s/ W. Jesse Spencer
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W. Jesse Spencer, Incorporator
By: /s/ R. Larry Campbell
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R. Larry Campbell, Incorporator
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