Exhibit 3.1
Articles of Incorporation of North Bay Bancorp
ARTICLES OF INCORPORATION
OF
NORTH BAY BANCORP
The undersigned Incorporator, for the purpose of forming a corporation
under the General Corporation Law of the State of California, hereby certifies
that:
I.
NAME
The name of this corporation is North Bay Bancorp.
II.
PURPOSE
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III.
AGENT FOR SERVICE OF PROCESS
The name and complete business address in this State of the
corporation's initial agent for service of process is Terry L. Robinson, Vintage
Bank, 1500 Soscol Avenue, Napa, California 94558-9959.
IV.
AUTHORIZED STOCK
(a) North Bay Bancorp (hereinafter the "Corporation") is authorized to
issue two classes of shares, designated "Common Stock" and "Preferred Stock,"
respectively. The number of shares of Common Stock authorized to be issued is
Ten Million (10,000,000) and the number of shares of Preferred Stock authorized
to be issued is Five Hundred Thousand (500,000).
(b) The Preferred Stock may be divided into such number of series as
the Board of Directors may determine. The Board of Directors is authorized to
determine and alter the rights, preferences, privileges and restrictions granted
to and imposed upon the Preferred Stock or any series thereof with respect to
any wholly unissued class or series of Preferred Stock, and to fix the number of
shares of any series of Preferred Stock and the designation of any such series
of Preferred Stock. The Board of Directors, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares
1
constituting any series, may increase or decrease (but not below the number of
shares of such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series.
V.
LIABILITY LIMITATION
(a) The liability of the directors of the Corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
VI.
INDEMNIFICATION
(a) The Corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) through bylaws,
agreements with agents, vote of shareholders or disinterested directors or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.
VII.
BUSINESS COMBINATIONS
The shareholder vote required to approve Business Combinations (as
herein defined) shall be as set forth in this Article VII.
A. Certain Definitions. For purposes of this Article:
(1) "Voting Stock" shall mean all of the then-outstanding shares
of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a
single class (it being understood that, for purposes of this
Article VII, each share of the Voting Stock shall have the
number of votes granted to it pursuant to Article IV of these
Articles of Incorporation or any designation of the rights,
powers and preferences of any class or series of Preferred
Stock made pursuant to said Article IV (a "Preferred Stock
Designation").
(2) A "person" shall mean any individual, firm, corporation,
trust, partnership, association or other entity.
(3) "Affiliates", "affiliated" and "Associates" shall have the
respective meaning ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on June 1, 1999.
2
(4) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by
the Corporation; provided, however, that for the purposes of
the definition of Interested Shareholder set forth in
paragraph (6) of this Section A, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
(5) A person shall be a "beneficial owner" or "beneficially own"
or have "beneficial ownership" of any Voting Stock:
(a) which such person or any of its Affiliates or
Associates beneficially owns, directly or indirectly;
or
(b) which such person or any of its Affiliates or
Associates has (i) 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, or (ii) the right to vote or to
direct the voting thereof pursuant to any agreement,
arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly,
by any other person with which such person or any of
its Affiliates or Associates has any agreement,
arrangement or understanding for purposes of acquiring,
holding, voting or disposing of any shares of Voting
Stock.
(6) "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of
more than twenty percent (20%) of the voting power of
the then-outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the
date in question was the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the
voting power of the then-outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock
which were at any time within the two-year period
immediately prior to the date in question beneficially
owned by any Interested Shareholder, 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.
3
(7) For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph (6) of this
Section A, the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through
application of paragraph (5) of this Section A but shall not
include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or
otherwise.
(8) "Continuing Director" means any member of the Board of
Directors of the Corporation (the "Board") who is not
affiliated with the Interested Shareholder and was a member of
the Board prior to the time that the Interested Shareholder
became an Interested Shareholder, or any successor of a
Continuing Director who is unaffiliated with the Interested
Shareholder and is recommended to succeed a Continuing
Director by a majority of Continuing Directors then on the
Board.
(9) "Fair Market Value" means: (a) in the case of stock on a given
date, the highest closing sale price during the 30-day period
immediately preceding such date of a share of such stock on
the Composite Tape for New York Exchange-Listed Stocks or, if
such stock is not quoted on the Composite Tape of the New York
Stock Exchange or, if such stock is not listed on such
Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which
such stock is listed or, if such stock is not listed on any
such exchange, the highest closing bid quotation with respect
to a share of such stock during the 30-day period preceding
such date on the National Association of Securities Dealers,
Inc. Automated Quotation System or any system then in use or,
if no such quotations are available, the fair market value on
such date of a share of such stock as determined by the Board
in good faith; and (b) in the case of property other than cash
or stock, the fair market value of such property on such date
as determined by the Board in good faith.
(10) "Business Combinations" shall include:
(a) any merger or consolidation of the Corporation or any
Subsidiary with (i) any Interested Shareholder or (ii)
any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger
or consolidation would be an Interested Shareholder or
an Affiliate or Associate of an Interested Shareholder;
or
(b) any sale, lease, exchange, mortgage, pledge, grant of a
security interest, transfer or other disposition (in
one transaction or a series of transactions) directly
or indirectly to or with any Interested Shareholder or
any Affiliate or Associate of any Interested
Shareholder of any assets of the Corporation or any
Subsidiary having an aggregate Fair Market Value of ten
percent
4
(10%) or more of the total value of the assets of the
Corporation and its consolidated subsidiaries reflected
in the most recent balance sheet of the Corporation; or
(c) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation or
any Subsidiary to any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder in
exchange for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market
Value of $10,000,000 or more; or
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed
by or on behalf of any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder;
except that this provision shall not limit the right of
shareholders to elect voluntarily to wind up or
dissolve the Corporation by the vote of shareholders
holding shares of stock representing more than fifty
percent (50%) of the stock then entitled to vote in the
election of directors; or
(e) any reclassification of the Corporation's securities
(including any reverse stock split), or
recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not
with or into or otherwise involving any Interested
Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate beneficial
ownership of any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder in
the outstanding shares of any class of equity or
convertible securities of the Corporation or any
Subsidiary; or as a result of which the shareholders of
the Corporation would cease to be shareholders of a
corporation incorporated under the laws of the State of
California having, as part of its articles of
incorporation, provisions to the same effects as this
Article VII.
(11) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than
cash to be received" shall include the shares of any class of
outstanding Voting Stock retained by the holders of such
shares.
(12) "Announcement Date" shall mean the date of the first public
announcement of a proposed Business Combination.
(13) "Determination Date" shall mean the date on which the
Interested Shareholder became an Interested Shareholder.
(14) "Consummation Date" shall mean the date of the consummation of
the Business Combination.
5
B. Voting Requirements. Except as otherwise provided in Section C of
this Article VII, a Business Combination shall require (1) the
affirmative vote of at least sixty-six and two thirds percent (66-2/3%)
of the voting power of the then-outstanding Voting Stock and (2) the
affirmative vote of the holders of at least a majority of the voting
power of all the then-outstanding shares of the Voting Stock other than
the Voting Stock of which an Interested Shareholder or an Affiliate is
the beneficial owner, voting together as a single class. Such
affirmative votes shall be required notwithstanding any other
provisions of these Articles of Incorporation or any provision of law
or of any agreement with any national securities exchange which might
otherwise permit a lesser vote or no vote, but such affirmative votes
shall be required in addition to any affirmative vote of the holders of
any particular class or series of the Voting Stock required by law,
these Articles of Incorporation, any Preferred Stock Designation or
otherwise.
C. Price and Procedure Requirements. The provisions of Section B of
this Article VII shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such
affirmative vote as is required by law, and any other provision of the
Articles of Incorporation, any Preferred Stock Designation, any
agreement with any national securities exchange or otherwise if, in the
case of a Business Combination that does not involve any cash or other
consideration being received by the shareholders of the Corporation,
solely in their respective capacities as shareholders of the
Corporation, the condition specified in the following paragraph (1) is
met, or in the case of any other Business Combination, the conditions
specified in either of the following paragraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by a
majority of the Continuing Directors, it being understood that
this condition shall not be capable of satisfaction unless
there is at least one Continuing Director.
(2) All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value, as of the Consummation Date, of consideration
other than cash to be received per share by holders
of common shares of the Corporation in such Business
Combination shall be not less than the highest of the
following (in each case appropriately adjusted in the
event of any stock dividend, stock split, combination
of shares or similar event):
(i) (if applicable) (a) the highest per share
price (including any brokerage commissions,
transfer taxes, and soliciting dealers'
fees) paid by the Interested Shareholder for
any common shares of the Corporation
acquired or beneficially
6
owned by it that were acquired within the
two-year period immediately prior to the
Announcement Date or in the transaction in
which it became an Interested Shareholder,
whichever is higher, plus (b) interest
thereon at the rate for 90-day United States
Treasury obligations in effect on the
Determination Date, calculated and
compounded annually from that date until the
Consummation Date, less the per share amount
of cash dividends payable to holders of
record on record dates occurring in the
interim, up to the amount of such interest;
(ii) the Fair Market Value per common share of
the Corporation on the Announcement Date; or
(iii) the Fair Market Value per common share of
the Corporation on the Determination Date.
(b) The aggregate amount of the cash and the Fair Market
Value, as of the Consummation Date, of consideration
other than cash to be received per share by the
holders of less than the highest class (or series) of
Voting Stock in such Business Combination shall be
not less than the highest of the following (in each
case appropriately adjusted in the event of any stock
dividend, stock split, combination of shares or
similar event), it being intended that the
requirements of this paragraph (b) be met with
respect to each class and series of Voting Stock,
whether or not the Interested Shareholder has
previously acquired any shares of a particular class
or series:
(i) (if applicable) (a) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid by the Interested Shareholder for any
shares of such class (or series) of Voting
Stock acquired or beneficially owned by it
that were acquired within the two-year
period immediately prior to the Announcement
Date or in the transaction in which it
became an Interested Shareholder, whichever
is higher, plus (b) interest thereon at the
rate for 90-day United States Treasury
obligations in effect on Determination Date,
calculated and compounded annually from that
date until the Consummation Date, less the
per share amount of cash dividends payable
to holders of record on record dates
occurring in the interim, up to the amount
of such interest;
7
(ii) (if applicable) the highest preferential
amount per share to which the holders of
shares of such class (or series) of Voting
Stock are entitled in the event of any
voluntary or involuntary liquidation,
dissolution or winding up of the
Corporation;
(iii) the Fair Market Value per share of such
class (or series) of Voting Stock on the
Announcement Date; and
(iv) the Fair Market Value per share of such
class (or series) of Voting Stock on the
Determination Date.
(c) The consideration to be received by holders of a
particular class (or series) of Voting Stock shall be
in cash or in the same form as the Interested
Shareholder has previously paid for shares of such
class (or series) of Voting Stock. If the Interested
Shareholder has paid for shares of any class (or
series) of Voting Stock with varying forms of
consideration, the form of consideration for such
class (or series) of Voting Stock shall be either
cash or the form used to acquire the largest number
of such shares.
(d) All shares of Voting Stock of which the Interested
Shareholder is not the beneficial owner immediately
prior to the Consummation Date shall be exchanged in
such Business Combination only for cash or other
consideration meeting all of the terms and conditions
of this Section C; provided, however, that the
failure of any shareholder, exercising a statutory
right to dissent from such Business Combination and
to receive payment of the Fair Market Value of
shares, to exchange shares in such Business
Combination shall not be deemed to have prevented
satisfaction of the condition set forth in this
paragraph (d).
(e) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation
of such Business Combination: (i) except as approved
by a majority of Continuing Directors, there shall
have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding
Preferred Stock; (ii) there shall have been (I) no
reduction in the annual rate of dividends paid on the
Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved
by a majority of Continuing Directors, and (II) an
increase in such annual rate of dividends as
necessary to reflect any reclassification (including
any reverse stock split), recapitalization,
reorganization or any similar
8
transaction which has the effect of reducing the
number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is
approved by a majority of the Continuing Directors;
and (iii) such Interested Shareholder shall have not
become the beneficial owner of any additional shares
of Voting Stock except as part of the transaction
which results in such Interested Shareholder becoming
an Interested Shareholder.
(f) After such Interested Shareholder has become an
Interested Shareholder, such Interested Shareholder
shall not have received the benefit, directly or
indirectly (except proportionately, solely in such
Interested Shareholder's capacity as a shareholder of
the Corporation), of any loans, advances, guarantees,
pledges or other financial assistance or any tax
credits or other tax advantages provided by the
Corporation or any subsidiary of the Corporation,
whether in anticipation of or in connection with such
Business Combination or otherwise.
(g) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to all shareholders of
the Corporation at least thirty (30) days prior to
the Consummation Date (whether or not such proxy or
information statement is otherwise required) and the
Continuing Directors, if there are any at the time,
shall be provided a reasonable opportunity to state
therein their views respecting such proposed Business
Combination and to include therewith an opinion of an
independent investment banker selected by the
Continuing Directors with respect to such Business
Combination.
(h) A state or federal regulatory authority having
jurisdiction under the circumstances shall have
determined that the Business Combination is fair to
the holders of the Voting Stock.
D. Powers of the Board of Directors. A majority of the total number of
authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time any such determination
as is hereinafter in this Section D specified is to be made by the
Board) shall have the power and duty to determine, on the basis of
information known to them after reasonable inquiry, all facts necessary
to determine compliance with this Article VII, including, without
limitation, (1) whether a person is an Interested Shareholder, (2) the
number of shares of Voting Stock beneficially owned by any person, (3)
whether a person is an Affiliate or Associate of another, and (4)
whether
9
the applicable conditions set forth in Section C of this Article VII
have been met with respect to any Business Combination.
E. No Effect on Fiduciary Obligations or Interested Shareholders.
Nothing contained in this Article VII shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
F. Amendment, Repeal, etc. Notwithstanding any other provision of these
Articles of Incorporation or the Bylaws (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or the Bylaws) the affirmative vote of the holders of at
least sixty-six and two thirds percent (66-2/3%) or more of the
outstanding Voting Stock, voting together as a single class, shall be
required to amend or repeal or adopt any provision inconsistent with
this Article VII or any provisions thereof.
VIII.
EVALUATION OF BUSINESS COMBINATIONS, ETC.
In connection with the exercise of its judgement in
determining what is in the best interest of the Corporation and of the
shareholders, when evaluating a "Business Combination," as defined in
Article VII of these Articles of Incorporation, 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 may deem relevant:
(1) The social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and
other customers, creditors, and other elements of the communities
in which the Corporation and its subsidiaries operate or are
located;
(2) The business and financial condition and earning prospects of the
acquiring person or persons, including, but not limited to, debt
service and other existing financial obligations, financial
obligations to be incurred in connection with the acquisition and
other likely financial obligations of the acquiring person or
persons, and the possible effect of such condition upon the
Corporation and its subsidiaries and the other elements of the
communities in which the Corporation and its subsidiaries operate
or are located;
(3) The competence, experience and integrity of the acquiring person
or persons and its or their management;
(4) Whether the proposed transaction might violate federal or state
law; and
10
(5) Not only the consideration being offered in a proposed transaction
and related to the current market price for the outstanding
capital stock of the Corporation, but also to the market price for
the capital stock of the Corporation over a period of years, the
estimated price that might be achieved in a negotiated sale of the
Corporation as a whole or in part, and the Corporation's future
value as an independent entity.
IN WITNESS WHEREOF, the undersigned Incorporator has executed these
Articles of Incorporation.
/s/ R. Brent Faye
----------------------------------
R. Brent Faye, Incorporator
DECLARATION
I declare that I am the person who executed the foregoing Articles of
Incorporation and that said instrument is my act and deed.
Executed at San Francisco, California, this 7th day of June, 1999.
/s/ R. Brent Faye
----------------------------------
R. Brent Faye
11