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ARTICLES OF INCORPORATION
OF
FIRST NORTHERN COMMUNITY BANCORP
ARTICLE 1
The name of the corporation is First Northern Community Bancorp.
ARTICLE 2
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.
ARTICLE 3
The name in the State of California of the corporation's initial agent for
service of process is:
CT Corporation System
ARTICLE 4
The corporation is authorized to issue one class of shares to be designated
Common Stock ("Common Stock"). Such shares shall be without par value. The total
number of shares of Common Stock the corporation shall have authority to issue
is eight million (8,000,000).
ARTICLE 5
Except as specified hereinbelow, each holder of Common Stock of the
corporation shall have full preemptive rights, as defined by law, to subscribe
for or purchase such holder's proportionate share of any Common Stock that may
be offered for sale or sold at any time by the corporation. The Board of
Directors shall have the power to prescribe a reasonable period of time within
which the preemptive rights to subscribe to the new shares of Common Stock must
be exercised. The foregoing right shall not apply to the sale or issuance by the
corporation of additional shares of Common Stock (i) in connection with the
acquisition by the corporation of another entity or business segment of any such
entity by merger, purchase of all or substantially all the assets or other type
of acquisition transaction; (ii) pursuant to any stock option, stock purchase or
other stock plan, agreement or arrangement previously approved by the
corporation's shareholders; (iii) in a public offering provided that the terms
of the offering include a requirement that if the offering is over-subscribed,
shares will be allocated on a pro rata basis based on actual paid subscriptions
received by the corporation.
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ARTICLE 6
6.1 In addition to any affirmative vote required by law or these Articles
of Incorporation, and except as otherwise expressly provided in Section 6.2 of
this Article 6, any "Business Combination" (as hereinafter defined), which shall
be consummated at a time when there shall exist an "Interested Shareholder" (as
hereinafter defined), shall require the affirmative vote of the holders of at
least sixty-six and two thirds percent (66 2/3%) of the then outstanding shares
of Common Stock of this corporation entitled to vote. Such affirmative vote
shall be required notwithstanding the fact that no vote may be required or that
a lesser percentage may be specified by law or otherwise.
In addition to the higher vote requirement, except as otherwise expressly
provided in Section 6.2 of this Article 6, prior to effecting any such Business
Combination all of the following conditions shall have been met:
6.1.1 The aggregate amount of the cash and the "Fair Market Value" (as
hereinafter defined) as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share by holders
of the Common Stock in such Business Combination shall be at least equal to the
higher of the following:
6.1.1.1 (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of the Common Stock acquired by it (a)
within the two-year period immediately prior to the first public announcement of
the proposal of the Business Combination (the "Announcement Date") or (b) in the
transaction in which it became an Interested Shareholder, if within two years of
the Announcement Date, whichever is higher; and
6.1.1.2 the Fair Market Value per share of the Common Stock on the
Announcement Date or on the date on which the Interested Shareholder became an
Interested Shareholder the ("Determination Date"), if within two years of the
Announcement Date, whichever is higher.
6.1.2 The consideration to be received by holders of the Common Stock shall
be in cash or in the same form as the Interested Shareholder has previously paid
for shares of the Common Stock . The price determined in accordance with Section
6.1.1 shall be subject to appropriate adjustment in the event of any stock
dividend, stock split, combination of shares or similar event.
6.1.3 After such shareholder has become an Interested Shareholder and prior
to the consummation of such Business Combination and except to the extent that
the corporation may be prohibited by law from making a distribution to
shareholders: (1) there shall have been (a) no reduction in the annual rate of
dividends paid on the Common Stock of this corporation (except as necessary to
reflect any subdivision of the Common Stock), except as approved by at least
sixty-six and two-thirds percent (66 2/3%) of the "Disinterested Directors" (as
hereinafter defined), and (b) 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 or outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by at least sixty-six and
two-thirds percent (66 2/3%) of the Disinterested Directors; and (3) such
Interested Shareholder shall
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have not become the beneficial owner of any additional shares of stock of this
corporation except as part of the transaction which results in such shareholder
becoming an Interested Shareholder within the two-year period prior to such
consummation.
6.1.4 After such shareholder has become an Interested Shareholder, such
Interested Shareholder shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantages provided by this corporation or any "Subsidiary" (as hereinafter
defined), whether in anticipation of or in connection with such Business
Combination or otherwise.
6.1.5 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 holders of the
Common Stock of this corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).
6.2 The provisions of Section 6.1 of this Article 6 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 these Articles of Incorporation, if the Business Combination shall have been
approved by at least sixty-six and two-thirds percent (66 2/3%) of the
Disinterested Directors; or, if either
6.2.1 there is pending any proceeding or other action by the Federal
Deposit Insurance Corporation pursuant to ss. 1818(a) or ss. 1823(c) of Title 12
of the United States Code in connection with any of the banking subsidiaries of
the corporation; or
6.2.2 there is outstanding any order of the Commissioner of Financial
Institutions of the State of California pursuant to California Financial Code
ss.ss. 3100-3132 or ss.ss. 3180-3187 against any banking subsidiary of the
corporation,
or any other provision of similar purpose as hereinafter adopted and as the same
may be amended at a future time.
6.3 For the purposes of this Article 6 the following definitions apply:
6.3.1 A "person" means any individual, firm, corporation or other entity.
6.3.2 "Interested Shareholder" means any person (other than this
corporation or any Subsidiary) who or which:
6.3.2.1 is the beneficial owner, directly or indirectly, of ten percent
(10%) or more of the issued and outstanding stock of this corporation; or
6.3.2.2 is an "Affiliate" of this 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 ten percent (10%) or more of the issued and
outstanding stock of this corporation; or
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6.3.2.3 is an assignee of or has otherwise succeeded to any shares of stock
of this Corporation 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.
6.3.3 A person shall be a "beneficial owner" of stock of this corporation:
6.3.3.1 which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
6.3.3.2 which such person or any of its Affiliates or Associates has (a)
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 (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
6.3.3.3 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 the purpose of acquiring, holding,
voting or disposing of any shares of stock of this corporation.
6.3.4 "Business Combination" shall include:
6.3.4.1 any merger or consolidation of the corporation or any Subsidiary
with (i) any Interested Shareholder or (ii) any other corporation or other
business entity (whether or not itself an Interested Shareholder) which is, or
after such merger or consolidation would be, an Affiliate of an Interested
Shareholder; or
6.3.4.2 any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets of the corporation or any Subsidiary having an aggregate Fair Market
Value of ten percent (10%) or more of the total value of the assets of the
corporation reflected in the most recent balance sheet of the corporation; or
6.3.4.3 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 of
any Interested Shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of twenty
percent (20%) of shareholders' equity or more; or
6.3.4.4 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 of any Interested Shareholder; except that this
provision shall not limit the right of the shareholders to elect voluntarily to
wind up or dissolve the corporation by the vote of shareholders holding shares
of stock representing fifty percent (50%) or more of the stock then entitled to
vote in the election of directors; or
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6.3.4.5 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 of any Interested Shareholder in the outstanding shares of any class
of equity or convertible securities of the corporation or any Subsidiary.
6.3.5 "Affiliate," and "Associate" shall have the respective meanings
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 January 1, 2000.
6.3.6 "Disinterested Director" means any member of the Board of Directors
who is unaffiliated with the Interested Shareholder and was a member of the
Board of Directors prior to the time that the Interested Shareholder became an
Interested Shareholder, and any successor of a Disinterested Director who is
unaffiliated with the Interested Shareholder and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board of Directors.
6.3.7 "Fair Market Value" means as to the stock of this corporation the
fair market value on the date in question of a share of such stock as determined
by the Board of Directors in good faith; and 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 the Board of Directors in good faith.
6.3.8 "Subsidiary" means any corporation of which a majority of any class
of equity security is owned, directly or indirectly, by this corporation;
provided, however, that for purposes of the definition of Interested
Shareholder, the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned directly or indirectly by
this corporation.
In the event of any Business Combination in which this corporation
survives, the phrase "other consideration to be received" as used in Section 6.1
of this Article 6 shall include the shares of stock of this corporation retained
by the holders of such shares.
6.4 A majority of the directors shall have the power and duty to determine
for the purposes of this Article 6, on the basis of information known to them
after reasonable inquiry, (A) whether a person is an Interested Shareholder, (B)
the number of shares of stock of this corporation beneficially owned by any
person, (C) whether a person is an Affiliate or Associate of another, or (D)
whether the assets which are the subject of any Business Combination constitute
substantially all assets of this corporation. A majority of the directors shall
have the further power to interpret all of the terms and provisions of this
Article 6.
6.5 Nothing contained in this Article 6 shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
6.6 Notwithstanding any other provisions of these Articles of Incorporation
or the By-laws (and notwithstanding the fact that a lesser percentage may be
specified by law, these Articles of Incorporation or the By-laws) the
affirmative vote of the holders of at least sixty-six
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and two-thirds percent (66 2/3%) of the outstanding stock of this corporation
shall be required to amend, repeal or adopt any provisions inconsistent with
this Article 6.
ARTICLE 7
The Board of Directors, when evaluating any offer of another party to (a)
make a tender or exchange offer for any Equity Security (as defined hereinafter)
of the corporation, (b) merge or consolidate the corporation with another
corporation, or (c) purchase, lease, or otherwise acquire all or substantially
all of the property of the corporation, shall in connection with the exercise of
its judgment in determining what is in the best interests of the corporation and
its shareholders consider all of the following factors and any other factors it
deems relevant: (i) the social and economic effects on the employees,
shareholders, customers, suppliers, and other constituents of the corporation
and its subsidiaries and on the communities in which the corporation or its
subsidiaries operate or are located, including, without limitation, the
availability of credit and other banking services to the communities served by
the corporation; (ii) whether the proposed transaction might violate federal or
state laws; and (iii) not only the consideration being offered in the proposed
transaction in relation to the then current market price for or book value of
the outstanding Common Stock of the corporation, but also to the market price
for or book value of the Common Stock of the corporation over a period of years
and the corporation's future value as an independent entity. For purposes of
this Article 7, "Equity Security" shall have the meaning ascribed to such term
in Section 3(a)(11) of the Securities Exchange Act of 1934, as in effect on
January 1, 2000.
ARTICLE 8
The liability of directors of the corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law. The
corporation is authorized to provide indemnification of agents (as defined in
section 317 of the California Corporations Code) through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors, or
otherwise, to the fullest extent permissible under California law. Any
amendment, repeal or modification of any provision of this Article 8 shall not
adversely affect any right or protection of an agent of the corporation existing
at the time of such amendment, repeal or modification.
Dated: February 3, 2000.
/S/ Owen J. Onsum
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Owen J. Onsum, Incorporator
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