Articles Of Incorporation
FLAG Financial Corp.
The name of the corporation is FLAG Financial Corp.
(a) Common Stock. The corporation shall have authority to issue up to 20,000,000 shares of common stock, par value of $1.00 per share, which shall have unlimited voting rights and be entitled to receive the net assets of the corporation upon dissolution.
(b) Preferred Stock. The corporation shall have authority to issue up to 10,000,000 shares of Preferred Stock, which may be of one or more series, with such preference, limitations, and relative rights, including par value, as the board of directors from time to time may determine and set forth in an amendment to them these articles of incorporation filed with the Secretary of State of the State of Georgia.
(a) Election, Term and Removal. The board of directors shall be divided into three classes as nearly equal in number as possible, with the term of office of one class expiring each year. At each annual meeting of stockholders, the directors of one class shall be elected to hold office for a term expiring at the third annual meeting following the election and until a successor shall have been duly elected and qualified; at the next succeeding annual meeting, the directors of a second class shall be elected to serve for such a term; and at the third succeeding annual meeting, the directors of the third class shall be elected to serve for such a term. During the intervals between annual meetings of stockholders, any vacancy occurring in the board of directors caused by resignation, removal, death or other incapacity, and any newly created directorships resulting from an increase in the number of directors, may be filled by a majority vote of the directors then in office, whether or not a quorum. Each director chosen to fill a vacancy shall hold office for the unexpired term in respect of which such vacancy occurred, except that each director chosen by the board of directors to fill a vacancy created by an increase in the number of directors shall hold office until the next election of directors by the stockholders. When the number of directors is changed, any newly created directorships or any decrease in directorships shall be so apportioned among the classes as to make all classes as nearly equal in number as possible.
Any director may be removed from office at any time, but only for cause, by the affirmative vote of stockholders of record holding a majority of the then outstanding shares of stock of each class of the corporation entitled to vote in elections of directors at a meeting of the stockholders called for that purpose. For purposes of this paragraph, “cause” shall mean final conviction of a felony, request or demand for removal by any bank regulatory authority having jurisdiction over the corporation, or breach of fiduciary duty involving personal profit.
Unless two-thirds of the directors then serving shall approve the proposed change, this paragraph (a) of Article III may only be amended or rescinded by the affirmative vote of the holders of at least two-thirds of the issues and outstanding shares of the corporation entitled to vote in an election of directors or at any regular or special meeting of the stockholders. Notice of any proposed change must be contained in the notice of the meeting sent to stockholders.
(b) Limitations on Director Liability. No director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of duty of care or other duty as a director, except for liability (i) for any appropriation, in, violation of his or her duties, of any business opportunity of the corporation; (ii) for acts or omissions which involve intentional misconduct or a knowing violation of the law; (iii) for the types of liability set forth in Section 14-2-832 of the Georgia Business Corporation Code (the “Georgia Code”); or (iv) for any transaction from which the director received an improper personal benefit. If the Georgia Code is amended after the effective date of this paragraph (b) of Article III to authorize corporate action further limiting the personal liability of directors, then the liability of the directors of the corporation shall be limited to the fullest extent permitted by the Georgia Code, as so amended. Any repeal or modification of this paragraph (b) by the stockholders of the corporation shall not adversely affect any right or protection of a director of the corporation existing at the time of such repeal or modification.
(c) Indemnification of Directors. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact he or she, or a person of whom he or she is legal representative, is or was a director of the corporation, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Georgia Code, as the same exists or may hereafter be amended (but in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than the Georgia Code permitted the corporation to provide prior to such amendment), against all expenses, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties, and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such director in connection with any such proceeding. Such indemnification shall continue as to a director who has cased to be a director and shall inure to the benefit of the director’s heirs, executors and administrators. Except with respect to proceedings to enforce rights to indemnification by a director, the corporation shall indemnify any such director in connection with a proceeding (or part thereof) initiated by such director only if such
proceeding (or part thereof) was authorized by the board of directors of the corporation. The right to indemnification conferred in this paragraph (c) of Article III shall be a contract right.
The corporation shall pay for or reimburse the actual and reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if the director furnishes the corporation (i) a written affirmation of his or her good faith belief that he or she has met the standard of conduct set forth in Georgia Code Section 14-2-856(b) and (ii) a written undertaking, executed personally or on his or her behalf, to repay any advances if it is ultimately determined that he or she is not entitled to indemnification for such expenses under this paragraph (c) or otherwise. The undertaking must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the director’s financial ability to make repayment.
If a claim for indemnification under this paragraph (c) is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the director may apply for indemnification or advancement of expenses to a court of competent jurisdiction pursuant to Georgia Code Section 14-2-854. If successful in whole or in part in any such suit, or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the director also shall be entitled to be paid the expenses of prosecuting or defending such suit.
(d) Permitted Considerations. In discharging the duties of their respective positions and in determining what is believed to be in the test interests of the corporation, the board of directors, committees of the board of directors and individual directors, in addition to considering the effects of any action on the corporation or its stockholders, may consider the interests of the employees, customers, suppliers, and creditors of the corporation and its subsidiaries, the communities in which offices or other establishments of the corporation or its subsidiaries are located, and all other factors such directors consider pertinent; provided, however, that this provision shall be deemed solely to grant discretionary authority to the directors and shall not be deemed to provide to any constituency any right to be considered.
(a) Stockholder Voting Requirements. Except as set forth in paragraph (b) of this Article IV, the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of the corporation entitled to vote thereon, other than those shares owned by an “Interested Stockholder” (as defined in paragraph (e) below), shall be required to approve:
(i) any merger or consolidation of the corporation or any subsidiary thereof with or into (A) any Interested Stockholder or (B) any other corporation or other entity that is, or after the merger or consolidation would be, an affiliate or associate (as such terms are defined below) of an Interested Stockholder that was an Interested Stockholder prior to the consummation of the transaction;
(ii) any share exchange with (A) any Interested Stockholder or (B) any other corporation or other entity that is, or after the share exchange would be, an affiliate or associate of an Interested Stockholder that was an Interested Stockholder prior to the consummation of the transaction;
(iii) any sale, lease, transfer, exchange, mortgage, pledge or other disposition, in one transaction or a series of transactions, of all or substantially all of the assets of the corporation or any of its subsidiaries to any Interested Stockholder, other than the corporation or any subsidiary thereof;
(iv) the issuance or transfer to any Interested Stockholder or any affiliate or associate of any Interested Stockholder by the corporation or any of its subsidiaries, in one transaction or in a series of transactions, of any equity securities of the corporation or subsidiary that have an aggregate market value of five percent or more of the total market value of the outstanding capital stock of the corporation or subsidiary whose securities are being issued, except where such securities are issued or transferred pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the corporation’s voting shares or any other method affording substantially proportionate treatment to the holders of voting shares, and except pursuant to the exercise or conversion of securities exercisable for or convertible into shares of the corporation or any subsidiary, which securities were outstanding prior to the date the Interested Stockholder first became an Interested Stockholder;
(v) the adoption of any plan or proposal for the liquidation or dissolution of the corporation or any subsidiary proposed by or on behalf of any Interested Stockholder or any affiliate or associate of any Interested Stockholder;
(vi) any reclassification of securities, including any reverse stock split, or recapitalization of the corporation or any subsidiary thereof, or any merger or consolidation of the corporation with any of its subsidiaries, which has the effect, directly or indirectly, of increasing by five percent or more the proportionate amount of the outstanding shares of any class or series of equity securities of the corporation or any subsidiary which is directly or indirectly beneficially owned by any Interested Stockholder or any affiliate or associate of any Interested Stockholder;
(vii) any receipt by the Interested Stockholder, or any affiliate or associate of the Interested Stockholder, other than in the ordinary course of business, of the benefit, directly or indirectly (except proportionately as a stockholder of the corporation), of any loans, advances, guarantees, pledges, or other financial benefits or assistance or any tax credits or other tax advantages provided by or through the corporation or any of its subsidiaries.
The transactions described in paragraphs (a)(i) through (vii), inclusive, of this Article IV hereinafter are referred to individually and collectively as a “business combination.”
(b) Exceptions for Director Approval. The provisions of this Article IV shall not apply to:
(i) any business combination with any Interested Stockholder or any affiliate or associate of an Interested Stockholder if two-thirds of the directors of the corporation approve a memorandum of understanding with the Interested Stockholder regarding the business combination prior to the date when such Interested Stockholder first became an Interested Stockholder, or
(ii) any business combination with an Interested Stockholder or any affiliate or associate of an Interested Stockholder if the business combination is unanimously approved by the continuing directors (as defined in (d) below) of the corporation.
(c) “Beneficial Owner” Defined. For purposes of this Article IV, any corporation, person or other entity, including an Interested Stockholder, shall be deemed to be the “beneficial owner” of any shares of the corporation:
(i) which it owns directly or indirectly, whether or not of record; or
(ii) which it has the right to acquire, immediately or after the passage of time, pursuant to any agreement, arrangement or understanding or upon exercise of conversion rights, exchange rights, warrants or options or the right to vote pursuant to any agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly (including shares deemed to be owned through application of subparagraphs (c)(i) or (ii) above), by an “affiliate” or “associate” (as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended) of the other corporation, person or entity; or
(iv) which are beneficially owned, directly or indirectly (including shares deemed owned through application of subparagraphs (c)(i) or (ii) above), by any other corporation, person or entity with which it or its “affiliate” or “associate” (as defined above) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of shares of equity securities of the corporation.
For the purpose of determining whether a corporation, person or entity is the beneficial owner of issued and outstanding of the corporation, the issued and outstanding shares of the corporation shall include shares not in fact issued and outstanding deemed
owned through the application of subparagraphs (c)(ii), (iii) and (iv) above, but shall not include any (A) other shares that are not then issued and outstanding but which may be issuable pursuant to any agreement or upon exercise of conversion rights, exchange rights, warrants, options or otherwise, (B) shares that are tendered pursuant to a tender or exchange offer made by such corporation, person or the entity or its affiliates or associates until such tendered stock is accepted for purchase or exchange, or (C) shares that such other corporation, person or other entity or its affiliates or associates have the right to vote pursuant to any agreement, arrangement or understanding if such agreement, arrangement or understanding to vote such shares arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten or more persons.
(d) “Continuing Director” Defined. For purposes of this Article IV, the term “continuing director” means any member of the board of directors of the corporation who is not an Interested Stockholder or an affiliate or associate of an Interested Stockholder or any of its affiliates, other than the corporation or any of its subsidiaries, and who was a director of the corporation prior to the date on which the Interested Stockholder first became an Interested Stockholder, and any successor to such continuing director who is not an affiliate or an associate of an Interested Stockholder or any of its affiliates, other than the corporation or its subsidiaries, and is recommended or elected by a majority of all of the continuing directors.
(e) “Interested Stockholder” Defined. For purposes of this Article IV, the term “Interested Stockholder” means any person, corporation or other entity, other than the corporation or any subsidiary thereof, that:
(i) is the beneficial owner of ten percent or more of the voting power of the outstanding voting shares of the corporation; or
(ii) is an affiliate of the corporation or any subsidiary thereof and, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the then outstanding voting shares of the corporation.
(f) Amendment. Unless two-thirds of the continuing directors shall approve the proposed change, this Article IV may be amended or rescinded only by the affirmative vote of the holders of at least two-thirds of the issued and outstanding shares of the corporation entitled to vote thereon at any regular or special meeting of the stockholders, and notice of the proposed change must be contained in the notice of the meeting.
INITIAL REGISTERED OFFICE AND AGENT
street address and county of the initial registered office of the corporation,
which is also the mailing address of the initial principal office of the
The name and address of the incorporator is as follows:
John S. Holle
IN WITNESS WHEREOF, the undersigned, as attorney for the incorporator, has executed these Articles of Incorporation as of the 9th day of February, 1993.
M. Hill Jeffries
Attorney for Incorporator