EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
HIGH COUNTRY BANCORP, INC.
ARTICLE I
NAME
The name of the corporation is High Country Bancorp, Inc. (hereinafter, the
"Corporation"), and the address of the initial principal office of the
Corporation is 130 West 2nd Street, Salida, Colorado 81201.
ARTICLE II
REGISTERED OFFICE
The address of the Corporation's registered office in the State of Colorado
is 130 West 2nd Street, Salida, Colorado 81201. The name of the Corporation's
registered agent at such address is Larry D. Smith.
ARTICLE III
POWERS
The purpose for which the Corporation is organized is to act as a savings
institution holding company and to transact all other lawful business for which
corporations may be incorporated pursuant to the laws of the State of Colorado.
The Corporation shall have all the powers of a corporation organized under the
Colorado Business Corporation Act.
ARTICLE IV
TERM
The Corporation is to have perpetual existence.
ARTICLE V
INCORPORATOR
The name and mailing address of the incorporator is as follows:
Name Mailing Address
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Larry D. Smith 130 West 2nd Street
Salida, Colorado 81201
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ARTICLE VI
CAPITAL STOCK
The aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 4,000,000 of which 3,000,000 are to be
shares of common stock, $0.01 par value per share, and of which 1,000,000 are to
be shares of serial preferred stock, $0.01 par value per share. The shares may
be issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of the stockholders except as
otherwise provided in this Article VI or the rules of a national securities
exchange, if applicable. The consideration for the issuance of the shares shall
be paid to or received by the Corporation in full before their issuance and
shall not be less than the par value per share. The consideration for the
issuance of the shares shall be cash, services rendered, personal property
(tangible or intangible), real property, leases of real property or any
combination of the foregoing. In the absence of actual fraud in the transaction,
the judgment of the board of directors as to the value of such consideration
shall be conclusive. Upon payment of such consideration such shares shall be
deemed to be fully paid and nonassessable. In the case of a stock dividend, the
part of the surplus of the Corporation which is transferred to stated capital
upon the issuance of shares as a stock dividend shall be deemed to be the
consideration for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in these Articles, the holders of
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the common stock shall exclusively possess all voting power. Each holder of
shares of common stock shall be entitled to one vote for each share held by such
holder, except as otherwise expressly set forth in these Articles.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the common stock as to the payment of dividends, the full amount of
dividends and sinking fund or retirement fund or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock, and on any class or
series of stock entitled to participate therewith as to dividends, out of any
assets legally available for the payment of dividends, but only when and as
declared by the board of directors of the Corporation.
In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class having preference
over the common stock in any such event, the full preferential amounts to which
they are respectively entitled, the holders of the common stock and of any class
or series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.
Each share of common stock shall have the same relative powers, preferences
and rights as, and shall be identical in all respects with, all the other shares
of common stock of the Corporation, except as otherwise expressly set forth in
these Articles.
B. Serial Preferred Stock. Except as provided in these Articles, the
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board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of each such series, and the qualifications, limitations or restrictions
thereof, including, but not limited to determination of any of the following:
(1) the distinctive serial designation and the number of shares
constituting such series;
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(2) the dividend rates or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from
which date or dates, the payment date or dates for dividends, and the
participating or other special rights, if any, with respect to
dividends;
(3) the voting powers, full or limited, if any, of the shares of such
series;
(4) whether the shares of such series shall be redeemable and, if so, the
price or prices at which, and the terms and conditions upon which such
shares may be redeemed;
(5) the amount or amounts payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution or winding
up of the Corporation;
(6) whether the shares of such series shall be entitled to the benefits of
a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and, if so entitled, the amount of such
fund and the manner of its application, including the price or prices
at which such shares may be redeemed or purchased through the
application of such funds;
(7) whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the
Corporation and, if so convertible or exchangeable, the conversion
price or prices, or the rate or rates of exchange, and the adjustments
thereof, if any, at which such conversion or exchange may be made, and
any other terms and conditions of such conversion or exchange;
(8) the subscription or purchase price and form of consideration for which
the shares of such series shall be issued; and
(9) whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of
the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series,
except as otherwise expressly set forth in these Articles.
ARTICLE VII
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of any class or series or carrying
any right to purchase stock of any class or series; but any such unissued stock,
bonds, certificates or indebtedness, debentures or other securities convertible
into or exchangeable for stock or carrying any right to purchase stock may be
issued pursuant to resolution of the board of directors of the Corporation to
such persons, firms, corporations or associations, whether or not holders
thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.
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ARTICLE VIII
REPURCHASE OF SHARES
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences of indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE IX
MEETINGS OF STOCKHOLDERS; CUMULATIVE VOTING
A. Notwithstanding any other provision of these Articles or the bylaws of
the Corporation, no action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.
B. Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors of the
Corporation, or by a committee of the board of directors which has been duly
designated by the board of directors and whose powers and authorities, as
provided in a resolution of the board of directors or in the bylaws of the
Corporation, include the power and authority to call such meetings, but such
special meetings may not be called by any other person or persons, except as
provided by Colorado law.
C. Each stockholder entitled to vote at a meeting of stockholders may
authorize another person or persons to act for him by proxy, but no such proxy
shall be voted or acted upon after 11 months from its date, unless the proxy
provides for a longer period. Without limiting the manner in which a
stockholder may authorize another person or persons to act for him as proxy, the
following shall constitute a valid means by which a stockholder may grant such
authority.
1. A shareholder may appoint a proxy by signing an appointment form,
either personally or by the shareholder's attorney-in-fact.
2. A shareholder may appoint a proxy by transmitting or authorizing
the transmission of a telegram, teletype, or other electronic transmission
providing a written statement of the appointment to the proxy, to a proxy
solicitor, proxy support service organization, or other person duly
authorized by the proxy to receive appointments as agent for the proxy, or
to the Corporation; except that the transmitted appointment shall set forth
or be transmitted with written evidence from which it can be determined
that the shareholder transmitted or authorized the transmission of the
appointment.
3. Any complete copy, including an electronically transmitted
facsimile, of an appointment of a proxy may be substituted for or used in
lieu of the original appointment for any purpose for which the original
appointment could be used.
D. There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.
E. Meetings of stockholders may be held at such place as the bylaws may
provide.
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ARTICLE X
NOTICE FOR NOMINATIONS AND PROPOSALS
A. Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders may be
made by the board of directors of the Corporation, by a committee appointed by
the Board of Directors for this purpose, or by any stockholder of the
Corporation entitled to vote generally in the election of directors. In order
for a stockholder of the Corporation to make any such nominations and/or
proposals, he or she shall give notice thereof in writing, delivered or mailed
by first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than thirty days nor more than sixty days prior to the date
of any such meeting; provided, however, that if less than forty days' notice of
the meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than the
close of business on the tenth day following the day on which notice of the
meeting was mailed to stockholders. Each such notice given by a stockholder
with respect to nominations for the election of directors shall set forth (i)
the name, age, business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of each
such nominee, and (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee. In addition, the stockholder
making such nomination shall promptly provide any other information reasonably
requested by the Corporation.
B. Each such notice given by a stockholder to the Secretary with respect
to business proposals to be brought before a meeting shall set forth in writing
as to each matter: (i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting;
(ii) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business; (iii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business. Notwithstanding anything
in these Articles to the contrary, no new business shall be conducted at the
meeting except in accordance with the procedures set forth in this Article.
C. The Chairman of the annual or special meeting of stockholders may, if
the facts warrant, determine and declare to such meeting that a nomination or
proposal was not made in accordance with the foregoing procedure, and, if he
should so determine, he shall so declare to the meeting and the defective
nomination or proposal shall be disregarded and laid over for action at the next
succeeding special or annual meeting of the stockholders taking place thirty
days or more thereafter. This provision shall not require the holding of any
adjourned or special meeting of stockholders for the purpose of considering such
defective nomination or proposal.
ARTICLE XI
DIRECTORS
A. Number; Vacancies. The number of directors of the Corporation shall
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be such number, not less than five nor more than fifteen (exclusive of
directors, if any, to be elected by holders of preferred stock of the
Corporation, voting separately as a class), as shall be set forth from time to
time in the bylaws, provided that no decrease in the number of directors shall
have the effect of shortening the term of any incumbent director, and provided
further that no action shall be taken to decrease or increase the number of
directors unless at least two-thirds of the directors then in office shall
concur in said action. Vacancies in the board of directors of the Corporation,
however caused, and newly created directorships shall be filled by a vote of
two-thirds of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for a term expiring at the annual meeting
of stockholders at which the term of the class to which the director has been
chosen expires and when the director's successor is elected and qualified.
B. Qualifications. Each director of the Corporation must at all times
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be a resident of the State of Colorado. For the purposes of this section,
"resident" means any natural person who occupies a dwelling within Colorado, has
an intention to remain within Colorado for a period of time (manifested by
establishing a physical, on-going, non transitory presence within Colorado) and
continues to reside in Colorado for the term of his or her directorship.
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C. Classified Board. The board of directors of the Corporation shall be
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divided into three classes of directors which shall be designated Class I, Class
II and Class III. The members of each class shall be elected for a term of
three years and until their successors are elected and qualified. Such classes
shall be as nearly equal in number as the then total number of directors
constituting the entire board of directors shall permit, with the terms of
office of all members of one class expiring each year. Subject to the
provisions of this Article XI, should the number of directors not be equally
divisible by three, the excess director or directors shall be assigned to
Classes III or II as follows: (i) if there shall be an excess of one
directorship over a number equally divisible by three, such extra directorship
shall be classified in Class III; and (ii) if there be an excess of two
directorships over a number equally divisible by three, one shall be classified
in Class III and the other in Class II. At the first annual meeting of
stockholders, directors of Class I shall be elected to hold office for a term
expiring at the third succeeding annual meeting thereafter. At the second
annual meeting of stockholders, directors of Class II shall be elected to hold
office for a term expiring at the third succeeding annual meeting thereafter.
At the third annual meeting of stockholders, directors of Class III shall be
elected to hold office for a term expiring at the third succeeding annual
meeting thereafter. Thereafter, at each succeeding annual meeting, directors of
each class shall be elected for three year terms. Notwithstanding the
foregoing, the director whose term shall expire at any annual meeting shall
continue to serve until such time as his successor shall have been duly elected
and shall have qualified unless his position on the board of directors shall
have been abolished by action taken to reduce the size of the board of directors
prior to said meeting.
Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the immediately
preceding paragraph. The board of directors shall designate, by the name of the
incumbent(s), the position(s) to be abolished. Notwithstanding the foregoing, no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. Should the number of directors of the Corporation be
increased, the additional directorships shall be allocated among classes as
appropriate so that the number of directors in each class is as specified in the
immediately preceding paragraph.
Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the board of directors shall consist of said
directors so elected in addition to the number of directors fixed as provided in
this Article XI. Notwithstanding the foregoing, and except as otherwise may be
required by law or by the terms and provisions of the preferred stock of the
Corporation, whenever the holders of any one or more series of preferred stock
of the Corporation shall have the right, voting separately as a class, to elect
one or more directors of the Corporation, the terms of the director or directors
elected by such holders shall expire at the next succeeding annual meeting of
stockholders.
ARTICLE XII
REMOVAL OF DIRECTORS
Notwithstanding any other provision of these Articles or the bylaws of the
Corporation, no member of this board of directors of the Corporation may be
removed, except for cause, and then only by the affirmative vote of the holders
of at least 80% of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for this
purpose as one class) cast at a meeting of the stockholders called for that
purpose. Notwithstanding the foregoing, whenever the holders of any one or more
series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
preceding provisions of this Article XII shall not apply with respect to the
director or directors elected by such holders of preferred stock.
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ARTICLE XIII
ACQUISITION OF CAPITAL STOCK
A. Five-Year Prohibition. For a period of five years from the
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effective date of the completion of the conversion of Salida Building and Loan
Association, Salida, Colorado, from mutual to stock form (which entity shall
become a wholly owned subsidiary of the Corporation upon such conversion), no
person shall directly or indirectly offer to acquire or acquire the beneficial
ownership of more than 10% of any class of equity security of the Corporation,
unless such offer or acquisition shall have been approved in advance by a two-
thirds vote of the Continuing Directors, as defined in Article XIV hereof. In
addition, for a period of five years from the completion of the conversion of
Salida Building and Loan Association from mutual to stock form (which entity
shall become a wholly owned subsidiary of the Corporation upon such conversion),
and notwithstanding any provision to the contrary in these Articles or in the
bylaws of the Corporation, where any person directly or indirectly acquires
beneficial ownership of more than 10% of any class of equity security of the
Corporation in violation of this Article XIII, the securities beneficially owned
in excess of 10% shall not be counted as shares entitled to vote, shall not be
voted by any person or counted as voting shares in connection with any matter
submitted to the stockholders for a vote, and shall not be counted as
outstanding for purposes of determining a quorum or the affirmative vote
necessary to approve any matter submitted to the stockholders for a vote.
B. Prohibition After Five Years. If, at any time after five years from
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the effective date of the completion of the conversion of Salida Building and
Loan Association from mutual to stock form (which entity shall become a wholly-
owned subsidiary of the Corporation upon such conversion), any person shall
acquire the beneficial ownership of more than 10% of any class of equity
security of the Corporation without the prior approval by a two-thirds vote of
the Continuing Directors, as defined in Article XIV hereof, then the record
holders of Voting Stock, as defined in Article XIV hereof, of the Corporation
beneficially owned by such acquiring person shall have only the voting rights
set forth in this paragraph B on any matter requiring their vote or consent.
With respect to each vote in excess of 10% of the voting power of the
outstanding shares of Voting Stock of the Corporation which such record holders
would otherwise be entitled to cast without giving effect to this paragraph B,
such record holders in the aggregate shall be entitled to cast only one-
hundredth (1/100) of a vote, and the aggregate voting power of such record
holders, so limited for all shares of Voting Stock of the Corporation
beneficially owned by such acquiring person, shall be allocated proportionately
among such record holders. For each such record holder, this allocation shall be
accomplished by multiplying the aggregate voting power, prior to imposing the
limitations of this paragraph B, of the outstanding shares of Voting Stock of
the Corporation beneficially owned by such record holder by a fraction whose
numerator is the number of votes equal to 10% of the shares of Voting Stock of
the Corporation and whose denominator is the total number of votes represented
by the shares of Voting Stock of the Corporation that are beneficially owned by
such acquiring person; any share held by such record holder in excess of the
allocated amount as determined in accordance with the previous clause shall be
entitled to cast one-hundredth of a vote. A person who is a record owner of
shares of Voting Stock of the Corporation that are beneficially owned
simultaneously by more than one person shall have, with respect to such shares,
the right to cast the least number of votes that such person would be entitled
to cast under this paragraph B by virtue of such shares being so beneficially
owned by any of such acquiring persons.
C. Definitions. The term "person" means an individual, a group acting in
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concert, a corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate or any
other group acting in concert formed for the purpose of acquiring, holding,
voting or disposing of securities of the Corporation. The term "acquire"
includes every type of acquisition, whether effected by purchase, exchange,
operation of law or otherwise. The term group "acting in concert" includes (a)
knowing participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, and (b) a
combination or pooling of voting or other interest in the Corporation's
outstanding shares for a common purpose, pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise. The term "beneficial ownership" shall have the meaning defined in
Rule 13d-3 of the General Rules and Regulations under the Securities and
Exchange Act of 1934, as in effect on the date of filing of these Articles.
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D. Exclusion for Employee Benefit Plans, Directors, Officers, Employees
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and Certain Proxies. The restrictions contained in this Article XIII shall not
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apply to (i) any underwriter or member of an underwriting or selling group
involving a public sale or resale of securities of the Corporation or a
subsidiary thereof; provided, however, that upon completion of the sale or
resale of such securities, no such underwriter or member of such selling group
is a beneficial owner of more than 10% of any class of equity security of the
Corporation, (ii) any proxy granted to one or more Continuing Directors, as
defined in Article XIV hereof, by a stockholder of the Corporation or (iii) any
employee benefit plans of the Corporation. In addition, the Continuing
Directors, as defined in Article XIV hereof, the officers and employees of the
Corporation and its subsidiaries, the directors of subsidiaries of the
Corporation, the employee benefit plans of the Corporation and its subsidiaries,
entities organized or established by the Corporation or any subsidiary thereof
pursuant to the terms of such plans and trustees and fiduciaries with respect to
such plans acting in such capacity shall not be deemed to be a group with
respect to their beneficial ownership of voting stock of the Corporation solely
by virtue of their being directors, officers or employees of the Corporation or
a subsidiary thereof or by virtue of the Continuing Directors, as defined in
Article XIV hereof, the officers and employees of the Corporation and its
subsidiaries and the directors of subsidiaries of the Corporation being
fiduciaries or beneficiaries of an employee benefit plan of the Corporation or a
subsidiary of the Corporation. Notwithstanding the foregoing, no director,
officer or employee of the Corporation or any of its subsidiaries or group of
any of them shall be exempt from the provisions of this Article XIII should any
such person or group become a beneficial owner of more than 10% of any class of
equity security of the Corporation.
E. Determinations. A majority of the Continuing Directors, as defined in
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Article XIV hereof, shall have the power to construe and apply the provisions of
this Article XIII and to make all determinations necessary or desirable to
implement such provisions, including but not limited to matters with respect to
(a) the number of shares beneficially owned by any person, (b) whether a person
has an agreement, arrangement or understanding with another as to the matters
referred to in the definition of beneficial ownership, (c) the application of
any other definition or operative provision of this Article XIII to the given
facts or (d) any other matter relating to the applicability or effect of this
Article XIII. Any constructions, applications, or determinations made by the
Continuing Directors pursuant to this Article XIII in good faith and on the
basis of such information and assistance as was then reasonably available for
such purpose shall be conclusive and binding upon the Corporation and its
stockholders.
ARTICLE XIV
APPROVAL OF CERTAIN BUSINESS COMBINATIONS
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.
A. (1) Except as otherwise expressly provided in this Article XIV, the
affirmative vote of the holders of (i) at least 80% of the outstanding
shares entitled to vote thereon (and, if any class or series of shares is
entitled to vote thereon separately, the affirmative vote of the holders of
at least 80% of the outstanding shares of each such class or series), and
(ii) at least a majority of the outstanding shares entitled to vote
thereon, not including shares deemed beneficially owned by a Related Person
(as hereinafter defined), shall be required in order to authorize any of
the following:
(a) any merger or consolidation of the Corporation with or into
a Related Person (as hereinafter defined);
(b) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage, or any other capital device,
of all or any Substantial Part (as hereinafter defined) of the assets
of the Corporation (including without limitation any voting securities
of a subsidiary) or of a subsidiary, to a Related Person;
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(c) any merger or consolidation of a Related Person with or into the
Corporation or a subsidiary of the Corporation;
(d) any sale, lease, exchange, transfer or other disposition of all
or any Substantial Part of the assets of a Related Person to the
Corporation or a subsidiary of the Corporation;
(e) the issuance of any securities of the Corporation or a subsidiary
of the Corporation to a Related Person;
(f) the acquisition by the Corporation or a subsidiary of the
Corporation of any securities of a Related Person;
(g) any reclassification of the common stock of the Corporation, or
any recapitalization involving the common stock of the Corporation; and
(h) any agreement, contract or other arrangement providing for any of
the transactions described in this Article XIV.
(2) Such affirmative vote shall be required notwithstanding any other
provision of these Articles, any provision of law, or any agreement with
any regulatory agency or national securities exchange which might otherwise
permit a lesser vote or no vote.
(3) The term "Business Combination" as used in this Article XIV shall
mean any transaction which is referred to in any one or more of
subparagraphs A(1)(a) through (h) above.
B. The provisions of paragraph A shall not be applicable to any
particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by any other provision of these
Articles, any provision of law, or any agreement with any regulatory agency or
national securities exchange, if the Business Combination shall have been
approved by a two-thirds vote of the Continuing Directors (as hereinafter
defined); provided, however, that such approval shall only be effective if
obtained at a meeting at which a Continuing Director Quorum (as hereinafter
defined) is present.
C. For the purposes of this Article XIV the following definitions apply:
(1) The term "Principal Shareholder" shall mean and include any
individual, corporation, partnership, or other person or entity which,
together with its "Affiliates" and "Associates" (as defined in Rule 12b-2
under the Securities Exchange Act of 1934), "beneficially owns" (as
hereinafter defined) in the aggregate ten percent (10%) or more of the
outstanding shares of Voting Stock, and any Affiliate or Associate of any
such individual, corporation, partnership, or other person or entity.
(2) The term "Related Person" shall mean and include (a) any
individual, corporation, partnership or other person or entity which
together with its "Affiliates" (as that term is defined in Rule 12b-2 under
the Securities Exchange Act of 1934), "beneficially owns" (as that term is
defined in Rule 13d-3 of the General Rules and Regulations under the
Securities Act of 1934) in the aggregate 10% or more of the outstanding
shares of the common stock of the Corporation; and (b) any "Affiliate" (as
that term is defined in Rule 12b-2 under the Securities Exchange Act of
1934) of any such individual, corporation, partnership or other person or
entity. Without limitation, any shares of the common stock of the
Corporation which any Related Person has the right to acquire pursuant to
any agreement, or upon exercise or conversion rights, warrants or options,
or otherwise, shall be deemed "beneficially owned" by such Related Person.
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(3) The term "Substantial Part" shall mean more than 25 percent of
the total assets of the Corporation, as of the end of its most recent
fiscal year ending prior to the time the determination is made.
(4) The term "Voting Stock" shall mean the stock of the Corporation
entitled to vote in the election of directors.
(5) The term "Continuing Director" shall mean any member of the board
of directors of the Corporation who is unaffiliated with the Related Person
and was a member of the board 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 Continuing Directors then on the
board.
(6) The term "Continuing Director Quorum" shall mean two-thirds of
the Continuing Directors capable of exercising the powers conferred on
them.
(7) Any corporation, partnership, person, or entity will be deemed to
be a "Beneficial Owner" of or to own beneficially any share or shares of
stock of the Corporation: (a) which it owns directly, whether or not of
record; or (b) which it has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement or arrangement or understanding or upon exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or which it has
the right to vote pursuant to any agreement, arrangement, or understanding;
or (c) which are owned directly or indirectly (including shares deemed to
be owned through application of clause (b) above) by any Affiliate or
Associate; or (d) which are owned directly or indirectly (including shares
deemed to be owned through application of clause (b) above) by any other
corporation, person, or entity with which it or any of its Affiliates or
Associates have any agreement or arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of Voting Stock.
For purpose only of determining the percentage of the outstanding shares of
Voting Stock which any corporation, partnership, person, or other entity
beneficially owns, directly or indirectly, the outstanding shares of Voting
Stock will be deemed to include any shares of Voting Stock which such
corporation, partnership, person or other entity beneficially owns pursuant to
the foregoing provisions of this subsection (whether or not such shares of
Voting Stock are in fact issued or outstanding), but shall not include any other
shares of Voting Stock which may be issuable either immediately or at some
future date pursuant to any agreement, arrangement, or understanding or upon
exercise of conversion rights, exchange rights, warrants, options, or otherwise.
ARTICLE XV
FAIR PRICE REQUIREMENTS
A. General Requirement. No "Business Combination" (as defined in
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Article XIV hereof) shall be effected unless all of the following conditions, to
the extent applicable, are fulfilled.
1. The ratio of (a) the aggregate amount of the cash and the fair
market value of the other consideration to be received per share by the holders
of the common stock of the Corporation in the Business Combination to (b) the
"Market Price" (as hereinafter defined) of the common stock of the Corporation
immediately prior to the announcement of the Business Combination or the
solicitation of the holders of the common stock of the Corporation regarding the
Business Combination, whichever is first, shall be at least as great as the
ratio of (x) the highest price per share previously paid by the "Principal
Shareholder" (whether before or after it became a Principal Shareholder) for any
of the shares of common stock of the Corporation at any time Beneficially Owned,
directly, or indirectly, by the Principal Shareholder to (y) the Market Price of
the common stock of the Corporation on the trading date immediately prior to the
earliest date on which the Principal Shareholder (whether before or after it
became a
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Principal Shareholder) purchased any shares of common stock of the Corporation
during the two year period prior to the date on which the Principal Shareholder
acquired the shares of common stock of the Corporation at any time owned by it
for which it paid the highest price per share (or, if the Principal Shareholder
did not purchase any shares of common stock of the Corporation during the two
year period, the Market Price of the common stock of the Corporation on the date
of two years prior to the date on which the Principal Shareholder acquired the
shares of common stock of the Corporation at any time owned by it for which it
paid the highest price per share).
2. The aggregate amount of the cash and the fair market value of the
other consideration to be received per share by the holders of the common stock
of the Corporation in the Business Combination shall be not less than the
highest price per share previously paid by the Principal Shareholder (whether
before or after it became a Principal Shareholder) for any of the shares of
common stock of the Corporation at any time Beneficially Owned, directly or
indirectly, by the principal Shareholder.
3. The consideration to be received by the holders of the common stock of
the Corporation in the Business Combination shall be in the same form and of the
same kind as the consideration paid by the Principal Shareholder in acquiring
the majority of the shares of common stock of the Corporation already
Beneficially Owned, directly or indirectly, by the Principal Shareholder.
The conditions imposed by this Article XV shall be in addition to all other
conditions (including, without limitation, the vote of the holders of any class
or series of stock of the Corporation) otherwise imposed by law, by any other
Article of these Articles, by any resolution of the board of directors providing
for the issuance of a class or series of stock, or by any agreement between the
Corporation and any national securities exchange or national securities
quotation system.
B. Certain Definitions. For the purpose of this Article XV, the
-------------------
definitions of "Business Combination," "Principal Shareholder," "Substantial
Part," "Voting Stock," and "Beneficial Owner" set forth in Article XIV hereof
will apply to this Article XV.
The "Market Price" of the common stock of the Corporation shall be the mean
between the high "bid" and the low "asked" prices of the common stock in the
over-the-counter market on the day on which such value is to be determined or,
if no shares were traded on such date, on the next preceding day on which such
shares were traded, as reported by the National Association of Securities
Dealers Automated Quotation System ("Nasdaq"), the Nasdaq Bulletin Board or
other national quotation service. If the common stock of the Corporation is not
regularly traded in the over-the-counter market but is registered on a national
securities exchange or traded in the national over-the-counter market, the
market value of the common stock shall mean the closing price of the common
stock on such national securities exchange or market on the day on which such
value is to be determined or, if no shares were traded on such day, on the next
preceding day on which shares were traded, as reported by National Quotation
Bureau, Incorporated or other national quotation service. If no such quotations
are available, the fair market value of 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 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.
C. Exceptions. The provisions of this Article XV shall not apply to a
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Business Combination which was approved by two-thirds of those members of the
board of directors of the Corporation who were directors prior to the time when
the Principal Shareholder became a principal Shareholder. The provisions of
which this Article XV also shall not apply to a Business Combination which (a)
does not change any shareholder's percentage ownership in the shares of stock
entitled to vote in the election of directors of any successor of the
Corporation from the percentage of the shares of Voting Stock Beneficially Owned
by such shareholder; (b) provides for the provisions of this Article XV, without
any amendment, change, alteration, or deletion, to apply to any successor to the
Corporation; and (c) does not transfer all or a Substantial Part of the
Corporation's assets other than to a wholly-owned subsidiary of the Corporation;
provided, however, that nothing contained in this Article XV shall permit the
Corporation to issue any of its shares of
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Voting Stock or to transfer any of its assets to a wholly-owned subsidiary of
the Corporation if such issuance of shares of Voting Stock or transfer of assets
is part of a plan to transfer such shares of Voting Stock or assets to a
Principal Shareholder.
D. Additional Provisions. Nothing contained in this Article XV shall be
---------------------
construed to relieve a Principal Shareholder from any fiduciary obligation
imposed by law. In addition, nothing contained in this Article XV shall prevent
any shareholders of the Corporation from objecting to any Business Combination
and from demanding any appraisal rights which may be available to such
shareholders.
E. Notwithstanding Article XX or any other provisions of these Articles
or the bylaws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, these Articles or the bylaws of the
Corporation), the affirmative vote of the holders of at least 80% of the
outstanding shares entitled to vote thereon (and, if any class or series is
entitled to vote thereon separately, the affirmative vote of the holders of at
least 80% of the outstanding shares of each such class or series) shall be
required to amend or repeal or adopt any provisions inconsistent with this
Article XV.
ARTICLE XVI
EVALUATION OF BUSINESS COMBINATIONS
In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the shareholders, when evaluating a
Business Combination (as defined in Article XIV) or a tender or exchange offer,
the board of directors of the Corporation may, 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 deems
relevant; (i) 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; (ii) the business and
financial condition and earnings prospects of the acquiring person or entity,
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
entity and the possible effect of such conditions upon the Corporation and its
subsidiaries and the other elements of the communities in which the Corporation
and its subsidiaries operate or are located; and (iii) the competence,
experience, and integrity of the acquiring person or entity and its or their
management.
ARTICLE XVII
LIABILITY
A. Elimination of Directors' Liability. Directors of the Corporation
-----------------------------------
shall have no liability to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that this Article
XVII shall not eliminate liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not made in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) acts specified in Section 7-108-403 of the
Colorado Business Corporation Act pertaining to unlawful distributions, or (iv)
for any transaction from which a director derived an improper personal benefit.
If the Colorado Business Corporation Act is amended after the effective date of
these Articles to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Colorado Business
Corporation Act, as so amended.
B. Limitation of Director's and Officer's Liability. No director or
------------------------------------------------
officer shall be personally liable for any injury to person or property arising
out of a tort committed by an employee unless such director or officer was
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personally involved in the situation giving rise to the litigation or unless
such director or officer committed a criminal offense in connection with such
situation.
Any repeal or modification of the forgoing paragraphs by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director or officer of the Corporation existing at the time of such repeal or
modification.
ARTICLE XVIII
INDEMNIFICATION
A. Indemnification. The Corporation shall indemnify any person who was
---------------
or is a party or is threatened to be made a party to any threatened, pending, or
completed action, suit, or proceeding, including actions by or in the right of
the Corporation, whether civil, criminal, administrative, or investigative, by
reason of the fact that such person is or was a director, officer, employee,
fiduciary or agent of the Corporation, or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit, or proceeding to the full extent permissible under Colorado
law.
B. Advancement of Expenses. Reasonable expenses incurred by an officer,
-----------------------
director, employee, fiduciary or agent of the Corporation in defending any
action, suit, or proceeding described in Section A of this Article XVIII may be
paid by the Corporation in advance of the final disposition of such action,
suit, or proceeding if authorized by the board of directors (without regard to
whether participating members thereof are parties to such action, suit, or
proceeding) or as otherwise required and to the fullest extent permitted by
Colorado law, upon receipt of an undertaking by or on behalf of such person to
repay such amount if it shall ultimately be determined that the person is not
entitled to be indemnified by the Corporation.
ARTICLE XIX
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to adopt,
repeal, alter, amend and rescind the bylaws of the Corporation by a vote of two-
thirds of the board of directors. Notwithstanding any other provision of these
Articles or the bylaws of the Corporation (and notwithstanding the fact that
some lesser percentage may be specified by law), the bylaws shall not be
adopted, repealed, altered, amended or rescinded by the stockholders of the
Corporation except by the vote of the holders of not less than 80% of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed adoption, repeal, alteration, amendment or
rescission is included in the notice of such meeting), or, as set forth above,
by the board of directors.
ARTICLE XX
AMENDMENT OF ARTICLES OF INCORPORATION
The Corporation reserves the right to repeal, alter, amend or rescind any
provision contained in these Articles in the manner now or hereafter prescribed
by law, and all rights conferred on stockholders herein are granted subject to
this reservation. Notwithstanding the foregoing, the provisions set forth in
Articles IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX and this Article
XX may not be repealed, altered, amended or rescinded in any respect unless the
same is approved by the affirmative vote of the holders of not less than 80% of
the outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as a single
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed repeal, alteration, amendment or rescission is
included in the notice of such meeting); except that such repeal, alteration,
13
amendment or rescission may be made by the affirmative vote of the holders of a
majority of the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this purpose as a
single class) if the same is first approved by a majority of the Continuing
Directors, as defined in Article XIV of these Articles.
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I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the Corporation Act of the State of
Colorado, do make these Articles, hereby declaring and certifying that this is
our act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 19th day of August , 1997.
/s/ Larry D. Smith
---------------------------
Larry D. Smith
Incorporator
Attest: /s/ Richard A. Young
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