ARTICLES OF INCORPORATION
OF
SCRIPPS FINANCIAL CORPORATION
ARTICLE I
The name of the Corporation is Scripps Financial Corporation.
ARTICLE II
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 III
The name and address in the State of California of the Corporation's initial
agent for service of process are:
Ronald J. Carlson
7817 Ivanhoe Avenue
La Jolla, CA 92037
ARTICLE IV
This Corporation is authorized to issue two classes of shares designated
respectively "Common Shares" and "Preferred Shares." The number of shares of
Common Shares is 20,000,000 and the number of shares of Preferred Shares is
10,000,000.
ARTICLE V
The Preferred Shares may be issued from time to time in one or more series. The
Board of Directors is authorized to fix the number of shares of any series of
Preferred Shares and to determine the designation of any such series. The Board
of Directors is authorized to determine or alter the rights, preferences,
privileges, and restrictions granted to or imposed upon any wholly unissued
series of Preferred Shares and, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any
series, to increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any such series subsequent
to the issue of shares of that series.
ARTICLE VI
The liability of the 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 VI shall
not adversely affect any right or protection of an agent of the Corporation
existing at the time of such amendment, repeal or modification.
ARTICLE VII
SECTION 1. DEFINITIONS. For the purposes of this Article VII:
A. The term "Beneficial Owner" and correlative terms shall have
the meaning as set forth in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, or any similar successor Rule.
Without limitation and in addition to the foregoing, any voting
shares of this Corporation which any Major Shareholder (as
defined below) has the right to vote or to acquire (i) pursuant
to any agreement, (ii) by reason of tenders of shares by
shareholders of the Corporation in connection with or pursuant to
a tender offer made by such Major Shareholder (whether or not any
tenders have been accepted, but excluding tenders which have been
rejected), or (iii) upon the exercise of conversion rights,
warrants, options or otherwise, shall be deemed "beneficially
owned" by such Major Shareholder.
B. The term "Business Combination shall mean:
1. Any merger or consolidation (whether in a single
transaction or a series of related transactions, including a
series of separate transactions with a Major Shareholder,
any Affiliate or Associate thereof or any Person acting in
concert therewith) of this Corporation or any Subsidiary
with or into a Major Shareholder or
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of a Major Shareholder with or into this Corporation or a
Subsidiary;
2. Any sale, lease, exchange, transfer, distribution to
shareholders or other disposition, including without
limitation, a mortgage, pledge or any other security device,
to or with a Major Shareholder by the Corporation or any of
its Subsidiaries (in a single transaction or a series of
related transactions) of all, substantially all or any
Substantial Part of the assets of this Corporation or a
Subsidiary (including, without, limitation, any securities
of a Subsidiary);
3. The purchase, exchange, lease or other acquisition by
the Corporation or any of its Subsidiaries (in a single
transaction or a series of related transactions) of all,
substantially all or any Substantial Part of the assets or
business of a Major Shareholder;
4. The issuance of any securities, or of any rights,
warrants or options to acquire any securities, of this
Corporation or a Subsidiary, eighty percent (80%) or more of
which are issued to a Major Shareholder, or the acquisition
by the Corporation or a Subsidiary of any securities, or of
any rights, warrants or options to acquire any securities,
of a Major Shareholder;
5. Any reclassification of Voting Stock, recapitalization
or other transaction (other than a redemption in accordance
with the terms of the security redeemed) which has the
effect, directly or indirectly, of increasing the
proportionate amount of Voting Stock of the Corporation or
any Subsidiary thereof which is beneficially owned by a
Major Shareholder, or any partial liquidation, spin off,
split off or split up of the Corporation or any Subsidiary
thereof; provided, however, that this Section 1B5 shall not
relate to any transaction of the types specified herein that
has been approved by eighty percent (80%) of the Board of
Directors; and
6. Any agreement, contract or other arrangement providing
for any of the transactions described herein.
C. The term "Major Shareholder" shall mean any Person which,
together with its "Affiliates" and "Associates" (as defined in
Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or
any similar successor Rule) and any Person acting in concert
therewith, is the beneficial owner of shares possessing ten
percent (10%) or more of the voting power of the Voting Stock of
this Corporation, and any Affiliate or Associate of a Major
Shareholder, including a Person acting in concert therewith. The
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term "Major Shareholder" shall not include a Subsidiary of this
Corporation.
D. The term "other consideration to be received" shall include,
without limitation, Voting Stock of this Corporation retained by
its existing shareholders in the event of a Business Combination
which is a merger or consolidation in which this Corporation is
the surviving corporation.
E. The term "Person" shall mean any individual, corporation,
partnership or other person, group or entity (other than the
Corporation, any Subsidiary of the Corporation or a trustee
holding stock for the benefit of employees of the Corporation or
its Subsidiaries, or any one of them, pursuant to one or more
employee benefit plans or arrangements). When two or more
Persons act as a partnership, limited partnership, syndicate,
association or other group for the purpose of acquiring, holding
or disposing of shares of stock, such partnership, syndicate,
association or group will be deemed a "Person."
F. The term "Subsidiary" shall mean any business entity fifty
percent (50%) or more of which is beneficially owned by the
Corporation.
G. The term "Substantial Part," as used in reference to the
assets of the Corporation, of any Subsidiary or of any Major
Shareholder means assets having a value of more than five percent
(5%) of the total consolidated assets of the Corporation and its
Subsidiaries as of the end of the Corporation's most recent
fiscal year ending prior to the time the determination is made.
H. The term "Voting Stock" shall mean stock or other securities
entitled to vote upon any action to be taken in connection with
any Business Combination or entitled to vote generally in the
election of directors, and shall also include stock or other
securities convertible into Voting Stock.
SECTION 2. Notwithstanding any other provisions of these Articles
of Incorporation and except as set forth in Section 3 of this Article
VII, neither the Corporation nor any Subsidiary shall be party to a
Business Combination unless:
A. The Business Combination was approved by the Board of
Directors of the Corporation prior to the Major Shareholder
involved in the Business Combination becoming such; or
B. The Major Shareholder involved in the Business Combination
sought and obtained the unanimous prior approval of the Board of
Directors to become a Major Shareholder and the Business
Combination
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was approved by not less than eighty percent (80%) of the Board of
Directors; or
C. The Business Combination was approved by not less than
ninety percent (90%) of the Board of Directors of the
Corporation; or
D. The Business Combination was approved by at least a 95% vote
of the outstanding Voting Stock of this Corporation.
SECTION 3. The approval requirements of Section 2 shall not apply
if the Business Combination is approved by the vote of at least
two-thirds (2/3) of the shares of the Voting Stock of this Corporation and
all of the following conditions are satisfied:
A. The aggregate of the cash and the fair market value of other
consideration to be received per share (as adjusted for stock
splits, stock dividends, reclassification of shares into a lesser
number of similar events) by holders of the common stock of this
Corporation in the Business Combination is not less than the
higher of (i) the highest per share price (including brokerage
commissions, soliciting dealers' fees, dealer-management
compensation, and other expenses, including, but not limited to,
costs of newspaper advertisements, printing expenses and
attorneys' fees) paid by the Major Shareholder in acquiring any
of this Corporation's common stock; or (ii) an amount which bears
the same or a greater percentage relationship to the market price
of this Corporation's common stock immediately prior to the
announcement of such Business Combination as the highest per
share price of this Corporation's common stock immediately prior
to the commencement of acquisition of this Corporation's common
stock by such Major Shareholder;
B. The consideration to be received in such Business
Combination by holders of the common stock of this Corporation
shall be, except to the extent that a shareholder agrees
otherwise as to all or a part of his or her shares, in the same
form and of the same kind as paid by the Major Shareholder in
acquiring this Voting Stock of the Corporation;
C. After becoming a Major Shareholder and prior to the
consummation of such Business Combination, (i) such Major
Shareholder shall not have acquired any newly-issued shares of
capital stock, directly or indirectly, from this Corporation or a
Subsidiary (except upon conversion of convertible securities
acquired by it prior to becoming a Major Shareholder or upon
compliance with the provisions of this Article VII or as a result
of a pro rata share dividend or share split) and (ii) such Major
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 tax credits
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provided by this Corporation or a Subsidiary, or made any major
changes in this Corporation's business or equity capital structure;
and
D. A proxy statement responsive to the requirements of the
Securities Exchange Act of 1934 and rules promulgated thereunder,
whether or not this Corporation is then subject to such
requirements, shall be mailed to all shareholders of this
Corporation for the purpose of soliciting shareholder approval of
such Business Combination and shall contain at the front thereof,
in a prominent place, (i) any recommendations as to the
advisability (or inadvisability) of the Business Combination
which any one or more members of Board of Directors may choose to
state, and (ii) the opinion or a reputable national investment
banking firm as to the fairness (or lack thereof) of the terms of
such Business Combination, from the point of view of the
remaining shareholders of this Corporation (such investment
banking firm to be engaged solely on behalf of the remaining
shareholders, to be paid a reasonable fee for their services by
this Corporation upon receipt of such opinion, to be one of the
so-called major bracket investment banking firms which has not
previously been associated with such Major Shareholder and to be
selected by the Board of Directors).
SECTION 4. The affirmative vote required by this Article VII is in
addition to the vote of the holders of any class or series of stock of
the Corporation otherwise required by law, these Articles of
Incorporation, or any resolution which has been adopted by the Board
of Directors providing for the issuance of a class or series of stock.
SECTION 5. Any amendment, change or repeal of this Article VII or
any other amendment of these Articles of Incorporation which would
have the effect of modifying or permitting circumvention of the
provisions of this Article VII shall require approval by at least an
eighty-five percent (85%) vote of the Voting Stock of the Corporation.
In addition to the foregoing, Section 2D of this Article VII may not
be repealed or amended in any respect unless such action is approved
by at least a 95% vote of the outstanding Voting Stock.
ARTICLE VIII
No action shall be taken by the shareholders of the Corporation except in an
annual or special meeting of the shareholders. This Article VIII may be amended
or repealed only upon the affirmative vote of eighty percent (80%) of the shares
entitled to vote.
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IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of
Incorporation on May 3, 1999.
/s/ Anne H. West
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Anne H. West, Incorporator
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