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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
____________________
PEOPLES BANCORP OF NORTH CAROLINA, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-2132396
(State of incorporation (I.R.S. Employer
or organization) Indentification No.)
218 South Main Street
Post Office Box 467
Newton, North Carolina 28658-0467
(Address of principal executive offices) (Zip Code)
____________________
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
If this form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [_]
If this form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is to become effective pursuant to General
Instruction A.(d), check the following box. [X]
Securities Act registration statement file number to which this form relates:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
General. The Registrant is authorized to issue 20,000,000 shares of common
stock and 5,000,000 shares of preferred stock. Neither the authorized common
stock nor the authorized preferred stock has any par value. There are 2,926,318
shares of the common stock issued and outstanding as of the date of this Form 8-
A.
The common stock will represent nonwithdrawable capital, will not be an
account of an insurable type, and will not be insured by the FDIC or any other
governmental entity. All of the common stock issued and outstanding is validly
issued, fully paid, and nonassessable.
Dividends. The Registrant's Board of Directors has the authority to
declare dividends on the common stock, subject to statutory and regulatory
requirements. The Registrant's Board of Directors will periodically review its
policy concerning dividends. Declarations of dividends, if any, by the
Registrant's Board of Directors will depend upon a number of factors, including
investment opportunities available to the Registrant, capital requirements,
regulatory limitations, the Registrant's results of operations and financial
condition, tax considerations and general economic conditions. Upon review of
such considerations, the Registrant's Board of Directors may authorize dividends
to be paid in the future if it deems such payment appropriate and in compliance
with applicable law and regulation. No assurances are given that any dividends
will in fact be paid on the common stock or that, if dividends are paid, they
will not be reduced or discontinued in the future.
The principal sources of income to the Registrant initially will consist of
income from dividends paid by Peoples Bank to the Registrant. North Carolina
commercial banks, such as Peoples Bank, are subject to legal limitations on the
amounts of dividends they are permitted to pay. Dividends may be paid by
Peoples Bank from undivided profits, which are determined by deducting and
charging certain items against actual profits, including any contributions to
surplus required by North Carolina law. Also, an insured depository
institution, such as Peoples Bank, is prohibited from making capital
distributions, including the payment of dividends, if, after making such
distributions, the institution would become "undercapitalized" (as such term is
defined in the applicable law and regulations). Consequently, future
declarations of cash dividends by the Registrant will depend upon dividend
payments by Peoples Bank to the Registrant, which payments are subject to
various restrictions.
Stock Repurchases. The shares of the common stock do not have any
redemption provisions. Stock repurchases are subject to Federal Reserve Board
regulations.
Voting Rights. The holders of shares of the common stock, as the only
class of capital stock of the Registrant outstanding, possess exclusive voting
rights with respect to the Registrant. Such holders have the right to elect the
Registrant's Board of Directors and to act on such other matters as are required
to be presented to shareholders under North Carolina law or as are otherwise
presented to them. Each holder of the common stock will be entitled to one vote
per share. The holders of the common stock have no right to vote their shares
cumulatively in the election of directors.
Liquidation Rights. In the event of a liquidation, dissolution or winding
up of the Registrant, the holders of the common stock would be entitled to
ratably receive, after payment of or making of adequate provisions for all debts
and liabilities of the Registrant, all remaining assets of the Registrant
available for distribution.
Preemptive Rights. Holders of the common stock will not be entitled to
preemptive rights with respect to any shares which may be issued by the
Registrant.
Preferred Stock. None of the 5,000,000 shares of the Registrant's
authorized preferred stock have been issued. Such stock may be issued in one or
more series with such rights, preferences, and designations as the Registrant's
Board of Directors may from time to time determine subject to applicable law and
regulation. If and when such shares are issued, holders of such shares may have
certain preferences, powers and rights (including voting rights) senior to the
rights of the holders of the common stock. The Registrant's Board of Directors
can (without shareholder approval) issue preferred stock with voting and
conversion rights which could, among other things, adversely affect the voting
power of the holders of the common stock and assist management in impeding an
unfriendly takeover or attempted change in control of the Registrant that some
shareholders may consider to be in their best interests but to which management
is opposed. The Registrant has no current plans to issue preferred stock.
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Restrictions on Acquisition. Acquisitions of the Registrant and
acquisitions of the capital stock of the Registrant are restricted by provisions
in the Articles of Incorporation and Bylaws of the Registrant and by various
federal and state laws and regulations. The Articles of Incorporation and
Bylaws of the Registrant contain certain provisions that are intended to
encourage a potential acquiror to negotiate any proposed acquisition of the
Registrant directly with the Registrant's Board of Directors.
An unsolicited non-negotiated takeover proposal can seriously disrupt the
business and management of a corporation and cause it great expense.
Accordingly, the Registrant's Board of Directors believes it is in the best
interests of the Registrant and its shareholders to encourage potential
acquirors to negotiate directly with management. The Registrant's Board of
Directors believes that these provisions will encourage such negotiations and
discourage hostile takeover attempts. It is also the view of the Registrant's
Board of Directors that these provisions should not discourage persons from
proposing a merger or transaction at prices reflective of the true value of the
Registrant and that otherwise is in the best interests of all shareholders.
However, these provisions may have the effect of discouraging offers to purchase
the Registrant or its securities which are not approved by the Registrant's
Board of Directors but which certain of the Registrant's shareholders may deem
to be in their best interests or pursuant to which shareholders would receive a
substantial premium for their shares over the current market prices. As a
result, shareholders who might desire to participate in such a transaction may
not have an opportunity to do so. Such provisions will also render the removal
of the Registrant's Board of Directors and management more difficult. The
Registrant's Board of Directors believes these provisions are in the best
interests of the shareholders because they will assist the Registrant's Board of
Directors in managing the affairs of the Registrant in the manner they believe
to be in the best interests of shareholders generally and because a company's
board of directors is often best able in terms of knowledge regarding the
company's business and prospects, as well as resources, to negotiate the best
transaction for its shareholders as a whole.
The following description of certain of the provisions of the Articles of
Incorporation and Bylaws of the Registrant is necessarily general and reference
should be made in each instance to such Articles of Incorporation and Bylaws.
Board of Directors. The Articles of Incorporation and Bylaws of the
Registrant provide that the number of directors shall not be less than five nor
more than fifteen. The number of directors currently is ten, but such number
may be changed by resolution of the Registrant's Board of Directors. These
provisions have the effect of enabling the Registrant's Board of Directors to
elect directors friendly to management in the event of a non-negotiated takeover
attempt and may make it more difficult for a person seeking to acquire control
of the Registrant to gain majority representation on the Registrant's Board of
Directors in a relatively short period of time. The Registrant believes these
provisions to be important to continuity in the composition and policies of the
Registrant's Board of Directors.
The Articles of Incorporation and Bylaws of the Registrant provides for
staggered elections of directors when the number of directors on the
Registrant's Board of Directors is nine or more. As a result, the existing ten
directors on the Registrant's Board of Directors have been divided into three
classes having terms of one, two, or three years, and all directors have been
elected to terms of three years each. The existence of staggered terms has the
effect of making it more difficult for a person seeking to acquire control of
the Registrant to gain majority representation on the Registrant's Board of
Directors.
Cumulative Voting. The Registrant's Articles of Incorporation do not
provide for cumulative voting for any purpose. Cumulative voting in election of
directors entitles a shareholder to cast a total number of votes equal to the
number of directors to be elected multiplied by the number of his or her shares
and to distribute that number of votes among such number of nominees as the
shareholder chooses. The absence of cumulative voting for directors limits the
ability of a minority shareholder to elect directors. Because the holder of
less than a majority of the Registrant's shares cannot be assured representation
on the Registrant's Board of Directors, the absence of cumulative voting may
discourage accumulations of the Registrant's shares or proxy contests that would
result in changes in the Registrant's management. The Registrant's Board of
Directors believes that: (i) the absence of cumulative voting helps to assure
continuity and stability of management and policies; (ii) directors should be
elected by a majority of the shareholders to represent the interests of the
shareholders as a whole rather than be the special representatives of particular
minority interests; and (iii) efforts to elect directors representing specific
minority interests are potentially divisive and could impair the operations of
the Registrant.
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Special Meetings. The Bylaws of the Registrant provide that special
meetings of shareholders of the Registrant may be called by the Chairman of the
Board, the Chief Executive Officer, the President, or by the Registrant's Board
of Directors. If a special meeting is not called by such persons or entities,
shareholder proposals cannot be presented to the shareholders for action until
the next annual meeting.
Preemptive Rights. The Registrant's Articles of Incorporation do not
provide for preemptive rights with respect to any shares which may be issued by
the Registrant.
Capital Stock. The Registrant's Articles of Incorporation authorizes the
issuance of 20,000,000 shares of common stock and 5,000,000 shares of preferred
stock. This provides the Registrant's Board of Directors with flexibility to
issue additional shares, without further shareholder approval, for proper
corporate purposes, including financings, acquisitions, stock dividends, stock
splits, employee stock options and other appropriate purposes. However,
issuance of additional authorized shares may also have the effect of impeding or
deterring future attempts to gain control of the Registrant. The Registrant's
Board of Directors also has sole authority to determine the terms of any one or
more series of preferred stock, including voting rights, conversion rates,
dividend rights, and liquidation preferences, which could adversely affect the
voting power of the holders of the common stock and discourage an attempt to
acquire control of the Registrant. The Registrant's Board of Directors has no
plans to issue any preferred stock, except on terms which it deems to be in the
best interests of the Registrant and its shareholders. However, the
Registrant's Board of Directors has the power, to the extent consistent with its
fiduciary duties, to issue preferred stock to persons friendly to management or
otherwise in order to impede attempts by third parties to acquire voting control
of the Registrant and to impede other transactions not favored by management.
Director Nominations. The Bylaws of the Registrant require a shareholder
who intends to nominate a candidate for election to the Registrant's Board of
Directors at a shareholders' meeting to give written notice to the Secretary of
the Registrant at least 30 days (but not more than 50 days) in advance of the
date of the meeting at which such nomination will be made. The nomination
notice is also required to include specified information concerning the nominee
and the proposing shareholder. The Registrant's Board of Directors believes
that it is in the best interests of the Registrant and its shareholders to
provide sufficient time for the Registrant's Board of Directors to study all
nominations and to determine whether to recommend to the shareholders that such
nominees be considered.
Supermajority Voting Provisions. The Registrant's Articles of Incorporation
requires the affirmative vote of 75% of the outstanding shares entitled to vote
to approve a merger, consolidation, or other business combination, unless the
transaction is approved, prior to consummation, by the vote of at least 75% of
the members of the Continuing Directors (as defined in the Articles of
Incorporation) of the Registrant's Board of Directors. "Continuing Directors"
generally includes all members of the Registrant's Board of Directors who are
not affiliated with any individual, partnership, trust or other person or entity
(or the affiliates and associates of such person or entity) which becomes a
beneficial owner of 10% or more of the voting shares of the Registrant after the
Registrant's date of incorporation. This provision could tend to make the
acquisition of the Registrant more difficult to accomplish without the
cooperation or favorable recommendation of the Registrant's Board of Directors.
When evaluating such business combinations, the Registrant's Board of Directors
will consider (i) the social and economic effects of acceptance of such an offer
on its depositors, borrowers, other customers, employees, and creditors of the
Registrant and its subsidiaries, and on the communities in which the Registrant
and its subsidiaries operate or are located; (ii) the ability of the Registrant
and its subsidiaries to fulfill the objectives of a bank and/or bank holding
company, as applicable, and of commercial banking entities, as applicable, under
applicable federal and state statutes and regulations; (iii) the business and
financial condition and prospects and earnings prospects of the person or group
proposing the combination, including, but not limited to, debt service and other
existing financial obligations, financial obligations to be incurred in
connection with the combination, and other likely financial obligations of such
person or group, and the possible effect of such conditions and prospects upon
the Registrant and its subsidiaries and the communities in which the Registrant
and its subsidiaries are located; (iv) the competence, experience, and integrity
of the person or group proposing the combination and its or their management;
and (v) the prospects for successful conclusion of the proposed combination.
Currently, more than 21% of the common stock is owned by five percent or
more shareholders and directors and executive officers of the Bank.
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State and Federal Law Restrictions on Acquisitions. The Registrant's
Articles of Incorporation provide that the North Carolina Shareholder Protection
Act and the North Carolina Control Share Acquisition Act will not apply to the
Registrant.
The Change in Bank Control Act, together with North Carolina regulations,
require that the consent of the North Carolina Commissioner of Banks and Federal
Reserve Board be obtained prior to any person or company acquiring "control" of
a North Carolina-chartered bank or a North Carolina-chartered bank holding
company. Upon acquiring control, such acquiror will be deemed to be a bank
holding company. Control is conclusively presumed to exist if, among other
things, an individual or company acquires the power, directly or indirectly, to
direct the management or policies of the Registrant or to vote 25% or more of
any class of voting stock. Control is rebuttably presumed to exist under the
Change in Bank Control Act if, among other things, a person acquires more than
10% of any class of voting stock, and the issuer's securities are registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the person would be the single largest shareholder.
Restrictions applicable to the operations of bank holding companies and
conditions imposed by the Federal Reserve in connection with its approval of
such acquisitions may deter potential acquirors from seeking to obtain control
of the Registrant.
Resales of the Common Stock. The common stock has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and instead
will be issued in reliance on the exemption contained in Section 3(a)(12)
thereof for securities issued in connection with certain acquisitions by a bank
holding company. Under Section 3(a)(12) and the related provisions of the
Securities Act, (i) shares of the common stock will be freely transferable under
the Securities Act by those shareholders of the Registrant not deemed to be
"affiliates" of the Registrant and (ii) pursuant to Rule 145 under the
Securities Act, shares of the common stock acquired by persons who are
"affiliates" of the Registrant will be subject to the resale restrictions
contained in paragraphs (c), (e), (f), and (g) of Rule 144 under the Securities
Act. Affiliates are generally defined as persons who control, are controlled
by, or are under common control with the Registrant (generally executive
officers and directors).
Under paragraph (e) of Rule 144, each affiliate of the Registrant, together
with any other person whose sales are required to be aggregated with those of
the affiliate under Rule 144, would be able to sell in the public market,
without registration, a number of shares not to exceed, in any three-month
period, the greater of (i) 1% of the outstanding shares of the common stock or
(ii) the average weekly trading volume in such shares during the preceding four
calendar weeks. Pursuant to paragraph (f) of Rule 144, the shares are required
to be sold in "brokers' transactions," as defined in paragraph (g) of Rule 144,
or in transactions directly with a "market maker," as defined in Section
3(a)(38) of the Exchange Act, as well as comply with certain other manner of
sale requirements set forth in paragraph (f). Pursuant to paragraph (c) of Rule
144, the ability of affiliates to resell shares of the common stock under Rule
144 will be subject to the Registrant having satisfied its Exchange Act
reporting requirements for specified periods prior to the time of sale.
Affiliates also would be permitted to resell the common stock pursuant to an
effective registration statement under the Securities Act or an available
exemption from the Securities Act registration requirements.
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ITEM 2. EXHIBITS
Exhibit Number Description
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(3)(I) Articles of Incorporation of Peoples Bancorp of North
Carolina, Inc.
(3)(II) Bylaws of Peoples Bancorp of North Carolina, Inc.
(4) Copy of the form certificate for each security to be
registered hereunder.
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement on Form 8-A
to be signed on its behalf by the undersigned, thereto duly authorized.
PEOPLES BANCORP OF NORTH CAROLINA, INC.
Date: August 31, 1999 By: /s/ Tony W. Wolfe
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Tony W. Wolfe, President
5
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ARTICLES OF INCORPORATION
OF
PEOPLES BANCORP OF NORTH CAROLINA, INC.
ARTICLE I
The name of the corporation is Peoples Bancorp of North Carolina, Inc. (the
"Corporation").
ARTICLE II
Section 2.1. Total Authorized Shares of Capital Stock. The Corporation
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shall have authority to issue a total of 25,000,000 shares of capital stock,
none of which shall have any par value, divided into classes as follows:
Class Number of Shares
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Common Stock 20,000,000
Preferred Stock 5,000,000
Section 2.2. Common Stock. The shares of Common Stock shall be of one
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and the same class. Subject to the rights of holders of the Preferred Stock as
determined by the Board of Directors pursuant to Section 2.3 hereof and by the
North Carolina Business Corporation Act ("NCBCA") as now constituted or
hereafter amended, the holders of shares of Common Stock shall have one vote per
share on all matters on which holders of shares of Common Stock are entitled to
vote and shall be entitled to participate pro rata after preferential rights of
holders of Preferred Stock in the distribution of the net assets of the
Corporation upon dissolution.
Section 2.3. Preferred Stock. The shares of Preferred Stock may be
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issued from time to time by the Corporation, and the Board of Directors may
create and divide such shares into series within that class, and such shares and
the shares of each such series shall have such voting powers,
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full or limited, or no voting powers, and such designations, preferences,
limitations and relative rights (or qualifications, conditions or restrictions
thereon) as the Board of Directors may and hereby is authorized to determine.
ARTICLE III
The street address and county of the initial registered office of the
Corporation is 218 South Main Avenue, Newton, Catawba County, North Carolina
28658. The mailing address of the initial registered office of the Corporation
is Post Office Box 467, Newton, North Carolina 28658-0467. The name of the
initial registered agent is Tony W. Wolfe.
ARTICLE IV
The name and address of the incorporator is as follows:
Tony W. Wolfe
218 South Main Avenue
Newton, North Carolina 28658
ARTICLE V
To the fullest extent permitted by the NCBCA as it exists or may hereafter
be amended, no person who is serving or has served as a director of the
Corporation shall be personally liable to the Corporation or any of its
shareholders or otherwise for monetary damages for breach of any duty as a
director. No amendment or repeal of this Article, nor the adoption of any
provision to these Articles of Incorporation inconsistent with this Article,
shall eliminate or reduce the protection granted herein with respect to any
matter that occurred prior to such amendment, repeal, or adoption.
ARTICLE VI
The provisions of Article 9 and Article 9A of the NCBCA entitled "The North
Carolina Shareholder Protection Act" and "The North Carolina Control Share
Acquisition Act," respectively, shall not be applicable to the Corporation.
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ARTICLE VII
Section 7.1. Definitions and Terms With Respect to Article VII. For
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purposes of this Article VII, the following definitions shall apply:
(a) The terms "Business Combination" shall mean any transaction in
connection with (i) a combination or merger of the Corporation, (ii) the
acquisition of more than ten percent (10%) of the Corporation's outstanding
Voting Shares, or (iii) a purchase or sale of a substantial portion of the
assets of the Corporation or a Subsidiary thereof (a purchase or sale of 20% or
more of the total assets of the Corporation or a Subsidiary as of the end of the
most recent quarterly period being deemed as "substantial") in each case, as
applicable, which requires the approval of, or notice to and absence of
objection by (i) any federal or state regulatory authority of banks, savings
banks, savings and loan associations or their holding companies, (ii) the
Federal Trade Commission or the Anti-Trust Division of the United States
Department of Justice, or (iii) the shareholders of the Corporation, but
excluding any reorganization, acquisition, merger, purchase or sale of assets,
or combination initiated by the Corporation upon the vote of at least fifty-one
percent (51%) of the Continuing Directors.
(b) 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 of Directors 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 the Continuing Directors.
(c) The term "Person" shall mean an individual, a corporation, a
limited liability company, a partnership, an association, a joint stock company,
a trust, or an unincorporated organization or similar company, and also includes
a syndicate or any group of any of the foregoing
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formed or acting together in concert for the purpose of acquiring, holding or
disposing of the equity securities or assets of the Corporation or any
Subsidiary.
(d) The term "Related Person" shall mean any individual,
partnership, corporation, trust or other person or entity (together with its
"affiliates" and "associates," as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "1934
Act")) which as of the date of its offer with respect to a Business Combination
is a "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act) in the
aggregate of ten percent (10%) or more of the outstanding Voting Shares of the
Corporation. A Related Person shall be deemed to have acquired a share of the
Voting Stock of the Corporation at the time when such Related Person became the
beneficial owner thereof.
(e) The term "Subsidiary" shall mean any corporation or other
entity of which the Person in question owns not less than fifty percent (50%) of
any class of equity securities, directly or indirectly.
(f) The term "Voting Shares" shall mean any shares of the
authorized stock of the Corporation entitled to vote generally in the election
of directors.
(g) The term "Whole Board of Directors" shall mean the total
number of directors which the Corporation would have if there were no vacancies
on the Board.
Section 7.2. Rights of Shareholders. The affirmative vote of the holders
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of seventy-five percent (75%) or more of the outstanding Voting Shares, voting
separately as a class, shall be required for the approval or authorization of
any Business Combination, provided, however, that the seventy-five percent (75%)
voting requirement shall not be applicable and such Business Combination may be
approved by the shareholder vote required by law and any other provision of
these Articles of Incorporation if the Business Combination is approved by the
Board of Directors
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of the Corporation by the affirmative vote of (a) at least seventy-five percent
(75%) of the Whole Board of Directors, and (b) if such Business Combination is
proposed by a Related Person, at least seventy-five percent (75%) of the
Continuing Directors, in either case at a duly called or convened regular or
special meeting of the Board of Directors.
Section 7.3. Fiduciary Obligations. Nothing contained in this Article
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VII shall be construed to relieve any Related Person from any fiduciary
obligation imposed by law or equity.
Section 7.4. Standards of Board of Directors' Evaluation of an Offer.
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The Board of Directors of the Corporation, when evaluating any offer of another
Person to effect a Business Combination shall, in connection with the exercise
of its judgment in determining what is in the best interests of the Corporation
and its shareholders, give due consideration to all relevant factors, including,
without limitation: (i) the social and economic effects of acceptance of such
offer on its depositors, borrowers, other customers, employees, and creditors of
the Corporation and its Subsidiaries, and on the communities in which the
Corporation and its Subsidiaries operate or are located; (ii) the ability of the
Corporation and its Subsidiaries to fulfill the objectives of a bank holding
company, as applicable, and of commercial banking entities, as applicable, under
applicable federal and state statutes and regulations; (iii) the business and
financial condition and prospects and earnings prospects of the Person or
Persons proposing the Business Combination, including, but not limited to, debt
service and other existing financial obligations, financial obligations to be
incurred in connection with the Business Combination, and other likely financial
obligations of such Person or Persons, and the possible effect of such
conditions and prospects upon the Corporation and its Subsidiaries and the
communities in which the Corporation and its Subsidiaries are located; (iv) the
competence, experience, and integrity of the Person or Persons proposing the
Business Combination and its or their management; and (v) the prospects for
successful conclusion of the proposed
<PAGE>
Business Combination. The provisions of this Article VII shall be deemed solely
to grant discretionary authority to the Board of Directors and shall not be
deemed to provide any constituency the right to be considered or to compel the
consideration of its interests.
Section 7.5. Amendment and Repeal of Article VII. Notwithstanding any
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other provision of these Articles of Incorporation or the Bylaws of the
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law) any amendment, change or repeal of this Article VII, or any
other amendment of these Articles of Incorporation which will have the effect of
modifying or permitting circumvention of this Article VII, shall require the
affirmative vote of the holders of at least seventy-five percent (75%) of the
then outstanding Voting Shares of the Corporation, voting separately as a class;
provided, however, that this restriction shall not apply to, and such seventy-
five percent (75%) vote shall not be required for, any such amendment, change or
repeal recommended to shareholders of the Corporation by the affirmative vote of
at least (a) seventy-five percent (75%) of the Whole Board of Directors, and (b)
if at such time there shall be a Related Person, at least seventy-five percent
(75%) of the Continuing Board of Directors, and in either such event such
amendment, change or repeal so recommended shall require only the vote, if any,
required under the applicable provisions of the NCBCA.
ARTICLE VIII
Section 8.1. Board of Directors. The number of directors of the
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Corporation shall not be less than five (5) nor more than fifteen (15), with the
exact number to be fixed from time to time as provided in the Corporation's
Bylaws.
In the first election of directors, and in all elections thereafter, that
the total number of directors as fixed pursuant to the Corporation's Bylaws is
nine (9) or more, the directors shall be divided into three (3) classes, as
nearly equal as possible in number as may be, to serve in the first
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instance for terms of one, two and three years, respectively, from the date such
class of directors takes office or until their earlier death, resignation,
retirement, removal or disqualification or until their successors shall be
elected and shall qualify, and thereafter the successors in each class of
directors shall be elected for terms of three (3) years or until their earlier
death, resignation, retirement, removal, or disqualification or until their
successors shall be elected and shall qualify. In the event of any increase or
decrease in the number of directors at a time that the directors are so
classified, the additional or eliminated directorships shall be classified or
chosen so that all classes of directors shall remain or become as nearly equal
as possible in number. At all times that the number of directors, as fixed
pursuant to the Corporation's Bylaws, is less than nine (9), each director shall
be elected to a term ending as of the next succeeding annual meeting of
shareholders or until his or her earlier death, resignation, retirement, removal
or disqualification or until his or her successor shall be elected and shall
qualify.
Section 8.2. Initial Board of Directors. The number of directors
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constituting the initial Board of Directors of the Corporation shall be ten (10)
and the names of the persons who are to serve as directors of the Corporation
until the first meeting of shareholders or until their successors are elected
and qualify are:
John H. Elmore, Jr.
Charles F. Murray
Fred L. Sherrill, Jr.
Robert C. Abernethy
James S. Abernethy
Larry E. Robinson
Bruce R. Eckard
B.E. Matthews
Dan Ray Timmerman, Sr
Benjamin I. Zachary
<PAGE>
This the 7th day of April, 1999.
By: /s/ Tony W. Wolfe
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Tony W. Wolfe
Incorporator
<PAGE>
BYLAWS
OF
PEOPLES BANCORP OF NORTH CAROLINA, INC.
ARTICLE I
OFFICES
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Section 1. Principal Office. The principal office of the corporation
----------------
shall be located at such place as the Board of Directors may fix from time to
time.
Section 2. Registered Office. The registered office of the corporation
-----------------
required by law to be maintained in the State of North Carolina may be, but need
not be, identical with the principal office.
Section 3. Other Offices. The corporation may have offices at such other
-------------
places, either within or without the State of North Carolina, as the Board of
Directors may designate or as the affairs of the corporation may require from
time to time.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
Section 1. Place of Meetings. All meetings of shareholders shall be held
-----------------
at the principal office of the corporation, or at such other place, either
within or without the State of North Carolina, as shall in each case be (i)
fixed by the Chief Executive Officer, the President, the Chairman of the Board,
or the Board of Directors and designated in the notice of the meeting or (ii)
agreed upon by a majority of the shareholders entitled to vote at the meeting.
Section 2. Annual Meetings. The annual meeting of shareholders shall be
---------------
held during the first five (5) calendar months following the end of the
corporation's fiscal year, on any day (except Saturday, Sunday, or a legal
holiday) during that period as shall be determined by the Board of Directors,
for the purpose of electing directors of the corporation and for the transaction
of such other business as may be properly brought before the meeting.
Section 3. Substitute Annual Meeting. If the annual meeting shall not be
-------------------------
held within the time designated by these Bylaws, a substitute annual meeting may
be called in accordance with the provisions of Section 4 of this Article II. A
meeting so called shall be designated and treated for all purposes as the annual
meeting.
<PAGE>
Section 4. Special Meetings. Special meetings of the shareholders may be
----------------
called at any time by the Chief Executive Officer, the President, the Chairman
of the Board of Directors or the Board of Directors.
Section 5. Notice of Meetings. Written notice stating the date, time, and
------------------
place of the meeting shall be given not less than ten (10) nor more than sixty
(60) days before the date of any shareholders' meeting, either by personal
delivery, or by mail by or at the direction of the Chief Executive Officer, the
President, the Chairman of the Board of Directors or the Board of Directors, to
each shareholder entitled to vote at such meeting, provided that such notice
must be given to all shareholders with respect to any meeting at which a merger
or share exchange is to be considered and in such other instances as required by
law. If mailed, such notice shall be deemed to be effective when deposited in
the United States mail, correctly addressed to the shareholder at the
shareholder's address as it appears on the current record of shareholders of the
corporation, with postage thereon prepaid.
In the case of a special meeting, the notice of meeting shall include a
description of the purpose or purposes for which the meeting is called; but, in
the case of an annual or substitute annual meeting, the notice of meeting need
not include a description of the purpose or purposes for which the meeting is
called unless such a description is required by the provisions of the North
Carolina Business Corporation Act.
When a meeting is adjourned to a different date, time or place, notice need
not be given of the new date, time or place if the new date, time or place is
announced at the meeting before adjournment and if a new record date is not
fixed for the adjourned meeting. If a new record date is fixed for the
adjourned meeting (which must be done if the new date is more than 120 days
after the date of the original meeting), notice of the adjourned meeting must be
given as provided in this Section 5 to persons who are shareholders as of the
new record date.
Section 6. Waiver of Notice. Any shareholder may waive notice of any
----------------
meeting before or after the meeting. The waiver must be in writing, signed by
the shareholder, and delivered to the corporation for inclusion in the minutes
or filing with the corporate records. A shareholder's attendance, in person or
by proxy, at a meeting (i) waives objection to lack of notice or defective
notice of the meeting, unless the shareholder or his proxy at the beginning of
the meeting objects to holding the meeting or transacting business at the
meeting, and (ii) waives objection to consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the shareholder or his proxy objects to considering the matter
before it is voted upon.
Section 7. Shareholders' List. Before each meeting of shareholders, the
------------------
Secretary of the corporation shall prepare an alphabetical list of the
shareholders entitled to notice of such meeting. The list shall be arranged by
voting group (and within each voting group by class or series of shares) and
show the address of and number of shares held by each shareholder. The list
shall be kept on file at the principal office of the corporation, or at a place
identified in the meeting notice in the city
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where the meeting will be held, for the period beginning two (2) business days
after notice of the meeting is given and continuing through the meeting, and
shall be available for inspection by any shareholder, his agent or attorney, at
any time during regular business hours. The list shall also be available at the
meeting and shall be subject to inspection by any shareholder, his agent or
attorney, at any time during the meeting or any adjournment thereof.
Section 8. Fixing Record Date. The Board of Directors may fix a future
------------------
date as the record date for one (1) or more voting groups in order to determine
the shareholders entitled to notice of a shareholders' meeting, to demand a
special meeting, to vote, or to take any other action. Such record date may not
be more than seventy (70) days before the meeting or action requiring a
determination of shareholders. A determination of shareholders entitled to
notice of or to vote at a shareholders' meeting is effective for any adjournment
of the meeting unless the Board of Directors fixes a new record date for the
adjourned meeting, which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
If no record date is fixed by the Board of Directors for the determination
of shareholders entitled to notice of or to vote at a meeting of shareholders,
the close of business on the day before the first notice of the meeting is
delivered to shareholders shall be the record date for such determination of
shareholders.
Section 9. Voting Groups. All shares of one (1) or more classes or series
-------------
that, under the Articles of Incorporation or the North Carolina Business
Corporation Act, are entitled to vote and be counted together collectively on a
matter at a meeting of shareholders constitute a voting group. All shares
entitled by the Articles of Incorporation or the North Carolina Business
Corporation Act to vote generally on a matter are for that purpose a single
voting group. Classes or series of shares shall not be entitled to vote
separately by voting group unless expressly authorized by the Articles of
Incorporation or specifically required by law.
Section 10. Quorum. Shares entitled to vote as a separate voting group
------
may take action on a matter at the meeting only if a quorum of those shares
exists. A majority of the votes entitled to be cast on the matter by the voting
group constitutes a quorum of that voting group for action on that matter.
Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
In the absence of a quorum at the opening of any meeting of shareholders,
such meeting may be adjourned from time to time by the vote of a majority of the
votes cast on the motion to adjourn; and, subject to the provisions of Section 5
of this Article II, at any adjourned meeting any business may be transacted that
might have been transacted at the original meeting if a quorum exists with
respect to the matter proposed.
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Section 11. Proxies. Shares may be voted either in person or by one (1)
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or more proxies authorized by a written appointment of proxy signed by the
shareholder or by his duly authorized attorney in fact. An appointment of proxy
is valid for eleven (11) months from the date of its execution, unless a
different period is expressly provided in the appointment form.
Section 12. Voting of Shares. Subject to the provisions of the Articles
----------------
of Incorporation, each outstanding share shall be entitled to one (1) vote on
each matter voted on at a meeting of shareholders.
Except in the election of directors as governed by the provisions of
Section 4 of Article III, if a quorum exists, action on a matter by a voting
group is approved if the votes cast within the voting group favoring the action
exceed the votes cast opposing the action, unless a greater vote is required by
law or the Articles of Incorporation or these Bylaws.
Absent special circumstances, shares of the corporation are not entitled to
vote if they are owned, directly or indirectly, by a second corporation in which
the corporation owns, directly or indirectly, a majority of the shares entitled
to vote for directors of the second corporation; provided that this provision
does not limit the power of the corporation or such second corporation to vote
shares held by it in a fiduciary capacity.
ARTICLE III
BOARD OF DIRECTORS
------------------
Section 1. General Powers. All corporate powers shall be exercised by or
--------------
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, the Board of Directors.
Section 2. Number and Qualification. The number of directors of the
------------------------
Corporation shall not be less than five (5) nor more than twelve (12), with the
exact number to be fixed from time to time by the Board of Directors.
Section 3. Nominations. At any meeting of shareholders at which directors
-----------
are to be elected, nominations for election to the Board of Directors may be
made by the Board of Directors or, subject to the conditions described below, by
any holder of shares entitled to be voted at that meeting in the election of
directors. To be eligible for consideration at the meeting of shareholders, all
nominations, other than those made by the Board of Directors, shall be in
writing and must be delivered to Secretary of the corporation not less than
thirty (30) days nor more than fifty (50) days prior to the meeting at which
such nominations will be made; provided, however, that if less than twenty-one
(21) days' notice of the meeting is given to shareholders, such nominations must
be delivered to the Secretary of the corporation not later than the close of
business on the seventh day following the day on which the notice of meeting was
mailed.
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Section 4. Election. Except as provided in Section 7 of this Article III,
--------
the directors shall be elected at the annual meeting of shareholders. Those
persons who receive the highest number of votes at a meeting at which a quorum
is present shall be deemed to have been elected.
Section 5. Terms of Directors. Each initial director shall hold office
------------------
until the earliest of the first shareholders' meeting at which directors are
elected, or until such director's death, resignation, or removal.
At all times that the number of directors is less than nine (9), each
director shall be elected to a term ending as of the next succeeding annual
meeting of shareholders or until his or her earlier death, resignation,
retirement, removal or disqualification or until his or her successor shall be
elected and shall qualify.
In the first election of directors that the total number of directors is
nine (9) or more, the directors shall be divided into three (3) classes, as
nearly equal as possible in number as may be, to serve in the first instance for
terms of one (1), two (2) and three (3) years, respectively, from the date such
class of directors takes office or until their earlier death, resignation,
retirement, removal or disqualification or until their successors shall be
elected and shall qualify, and thereafter the successors in each class of
directors shall be elected for terms of three (3) years or until their earlier
death, resignation, retirement, removal, or disqualification or until their
successors shall be elected and shall qualify. In the event of any increase or
decrease in the number of directors at a time that the directors are so
classified, the additional or eliminated directorships shall be classified or
chosen so that all classes of directors shall remain or become as nearly equal
as possible in number.
Notwithstanding the provisions of this Section 5, a decrease in the number
of directors does not shorten an incumbent director's term. Despite the
expiration of a director's term, such director shall continue to serve until a
successor shall be elected and qualified or until there is a decrease in the
number of directors.
Section 6. Removal. Any director may be removed from office at any time,
-------
with or without cause, by a vote of the shareholders if the number of votes cast
to remove such director exceeds the number of votes cast not to remove him. If
a director is elected by a voting group of shareholders, only the shareholders
of that voting group may participate in the vote to remove him. A director may
not be removed by the shareholders at a meeting unless the notice of that
meeting states that the purpose, or one (1) of the purposes, of the meeting is
removal of the director. If any directors are so removed, new directors may be
elected at the same meeting.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors,
---------
including without limitation a vacancy resulting from an increase in the number
of directors or from the failure by the shareholders to elect the full
authorized number of directors, may be filled by the shareholders or by the
Board of Directors, whichever group shall act first. If the directors remaining
in office do not constitute a quorum, the directors may fill the vacancy by the
affirmative vote of a majority of the remaining directors or by the sole
remaining director. If the vacant office was held by a director
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elected by voting group, only the remaining director or directors elected by
that voting group or the holders of shares of that voting group are entitled to
fill the vacancy.
Section 8. Chairman of the Board of Directors. There may be a Chairman of
----------------------------------
the Board of Directors elected by the directors from their number at any meeting
of the Board of Directors. The Chairman shall serve in such position at the
pleasure of the Board of Directors and shall preside at all meetings of the
Board of Directors and shareholders, serve as a member of the Executive
Committee, and perform such other duties as may be directed by the Board of
Directors.
In the absence of the Chairman, the President shall preside at meetings of
directors or shareholders.
Section 9. Compensation. The Board of Directors may provide for the
------------
compensation of directors for their services as such and for the payment or
reimbursement of any or all expenses incurred by them in connection with such
services.
ARTICLE IV
MEETINGS AND COMMITTEES OF DIRECTORS
------------------------------------
Section 1. Regular Meetings. A regular meeting of the Board of Directors
----------------
shall be held immediately after, and at the same place as, the annual meeting of
shareholders. In addition, the Board of Directors may provide, by resolution,
the time and place, either within or without the State of North Carolina, for
the holding of additional regular meetings.
Section 2. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by or at the request of the Chairman of the Board or the President
if such officer is also a director, or by any three (3) or more directors. Such
a meeting may be held either within or without the State of North Carolina, as
fixed by the person or persons calling the meeting.
Section 3. Notice of Meetings. Regular meetings of the Board of Directors
------------------
may be held without notice. The person or persons calling a special meeting of
the Board of Directors shall, at least two (2) days before the meeting, give or
cause to be given notice thereof by any usual means of communication. Such
notice need not specify the purpose for which the meeting is called. Any duly
convened regular or special meeting may be adjourned by the directors to a later
time without further notice.
Section 4. Waiver of Notice. Any director may waive notice of any meeting
----------------
before or after the meeting. The waiver must be in writing, signed by the
director entitled to the notice, and be delivered to the corporation for
inclusion in the minutes or for filing with the corporate records. A director's
attendance at or participation in a meeting waives any required notice of such
meeting unless the director at the beginning of the meeting, or promptly upon
arrival, objects to holding the
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meeting or to transacting business at the meeting and does not thereafter vote
for or assent to action taken at the meeting.
Section 5. Quorum. Unless the Articles of Incorporation or these Bylaws
------
provide otherwise, a majority of the number of directors fixed by or pursuant to
these Bylaws shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, or if no number is so fixed, a majority of
the number of directors in office immediately before the meeting begins shall
constitute a quorum.
Section 6. Manner of Acting. Except as otherwise provided in the Articles
----------------
of Incorporation or these Bylaws, including Section 9 of this Article IV, the
affirmative vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors.
Section 7. Presumption of Assent. A director who is present at a meeting
---------------------
of the Board of Directors or a committee of the Board of Directors when
corporate action is taken is deemed to have assented to the action taken unless
(i) he objects at the beginning of the meeting, or promptly upon his arrival, to
holding it or to transacting business at the meeting, or (ii) his dissent or
abstention from the action taken is entered in the minutes of the meeting, or
(iii) he files written notice of his dissent or abstention with the presiding
officer of the meeting before its adjournment or with the corporation
immediately after the adjournment of the meeting. Such right of dissent or
abstention is not available to a director who votes in favor of the action
taken.
Section 8. Action Without Meeting. Action required or permitted to be
----------------------
taken at a meeting of the Board of Directors may be taken without a meeting if
the action is taken by all members of the Board of Directors. The action must
be evidenced by one (1) or more written consents signed by each director before
or after such action, describing the action taken, and included in the minutes
or filed with the corporate records.
Section 9. Committees of the Board of Directors. The Board of Directors
------------------------------------
may create such committees of the Board of Directors as it shall consider
appropriate, including without limitation those committees specifically provided
for in these Bylaws. The creation of a committee of the Board of Directors and
appointment of members to it must by approved by the greater of (i) a majority
of the number of directors in office when the action is taken or (ii) the number
of directors required to take action pursuant to Section 6 of this Article IV.
Each committee of the Board of Directors must have two (2) or more members and,
to the extent authorized by law, shall have such duties and authority as may be
described in these Bylaws or otherwise specified by the Board of Directors.
Each committee member shall serve at the pleasure of the Board of Directors.
The provisions in these Bylaws governing meetings, actions without meeting and
other requirements of the Board of Directors shall also apply to any committees
of the Board of Directors established pursuant to these Bylaws.
Section 10. Executive Committee. There may be a standing committee of the
-------------------
Board of Directors to be known as the Executive Committee and consisting of not
fewer than three (3)
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directors, one (1) of whom shall be the Chairman of the Board of Directors and
one (1) of whom shall be the President of the corporation, if such officer is
also a director. Except as limited by Section 9 of this Article IV or otherwise
limited by law, the Executive Committee is empowered to act for and on behalf of
the Board of Directors in any and all matters in the interim between meetings of
the Board of Directors. Within the powers conferred upon it, action by the
Executive Committee shall be as binding upon the corporation as if performed by
the full Board of Directors. Such actions shall be reported to the Board of
Directors for review at its next meeting following such action. The committee
shall meet as often as it considers necessary or advisable.
Section 11. Audit Committee. There may be a standing committee of the
---------------
Board of Directors to be known as the Audit Committee and consisting of not
fewer than three (3) directors. The Audit Committee shall supervise examination
of the assets and the liabilities and the internal audit program of the
corporation and its subsidiaries, cause outside audits to be performed on the
financial statements of the corporation, and shall make periodic reports to the
Board of Directors.
ARTICLE V
OFFICERS
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Section 1. Officers of the Corporation. The officers of the corporation
---------------------------
shall consist of a President, a Secretary, a Treasurer, and such Vice Presidents
or other officers (including assistant officers) as may from time to time be
appointed by or under the authority of the Board of Directors. Any two (2) or
more offices may be held by the same person, but no officer may act in more than
one (1) capacity where action of two (2) or more officers is required.
Section 2. Appointment and Term. The officers of the corporation shall be
--------------------
appointed by the Board of Directors or by a duly appointed officer authorized by
the Board of Directors to appoint one (1) or more officers. Each officer shall
hold office until his death, resignation, retirement, removal, disqualification,
or his successor shall have been appointed.
Section 3. Compensation of Officers. The compensation of all officers of
------------------------
the corporation shall be fixed by or under the authority of the Board of
Directors, and no officer shall serve the corporation in any other capacity and
receive compensation therefor unless such additional compensation shall be duly
authorized. The appointment of an officer does not itself create contract
rights.
Section 4. Removal. Any officer may be removed by the Board of Directors
-------
at any time with or without cause; but such removal shall not itself affect the
officer's contract rights, if any, with the corporation except to the extent, if
any, specified in any such contract.
Section 5. Resignation. An officer may resign at any time by
-----------
communicating his resignation to the corporation, orally or in writing. A
resignation is effective when communicated unless it specifies in writing a
later effective date. If a resignation is made effective at a later date that
is
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accepted by the corporation, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date. An officer's resignation does not
affect the corporation's contract rights, if any, with the officer except to the
extent, if any, specified in any such contract.
Section 6. Bonds. The Board of Directors may by resolution require any
-----
officer, agent, or employee of the corporation to give bond to the corporation,
with sufficient sureties, conditioned on the faithful performance of the duties
of his respective office or position, and to comply with such other conditions
as may from time to time be required by the Board of Directors.
Section 7. President. The President shall be the principal executive
---------
officer of the corporation and, subject to the control of the Board of
Directors, shall in general supervise and control all of the business and
affairs of the corporation. He shall sign, with the Secretary, an Assistant
Secretary, or any other proper officer of the corporation thereunto authorized
by the Board of Directors, certificates for shares of the corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these Bylaws to some other officer or agent of the corporation, or shall be
required by law to be otherwise signed or executed, and in general he shall
perform all duties incident to the office of the President and such other duties
as may be prescribed by the Board of Directors from time to time. The President
shall be entitled to attend all regular and special meetings and meetings of
committees of the Board of Directors. If the President of the corporation is
also a director of the corporation, he shall serve as a member of the Executive
Committee.
Section 8. Vice Presidents. In the absence of the President or in the
---------------
event of his death, inability or refusal to act, the Vice Presidents, unless
otherwise determined by the Board of Directors, shall perform the duties of the
President, and when so acting shall have all the powers of and be subject to all
the restrictions upon the President. Any Vice President (or Assistant Vice
President) may sign, with the Secretary, an Assistant Secretary, or any other
proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation and any other instruments
which may be signed by the President, and shall perform such other duties as
from time to time may be prescribed by the President or Board of Directors.
Section 9. Secretary. The Secretary shall: (i) keep the minutes of the
---------
meetings of shareholders, of the Board of Directors, and of all committees of
the Board of Directors, in one or more books provided for that purpose; (ii) see
that all notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (iii) maintain and authenticate the records of the
corporation and be custodian of the seal of the corporation and see that the
seal of the corporation is affixed to all documents the execution of which on
behalf of the corporation under its seal is duly authorized; (iv) sign with the
President or a Vice President, certificates for shares of the corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; (v) maintain or cause to be maintained, and have general charge of,
the stock transfer books of the corporation; (vi) prepare or cause to be
prepared shareholder lists prior to each meeting of
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shareholders as required by law; (vii) attest the signature or certify the
incumbency or signature of any officer of the corporation; and (viii) in general
perform all duties incident to the office of secretary and such other duties as
from time to time may be prescribed by the President or by the Board of
Directors.
Section 10. Treasurer. The Treasurer shall be, and may be designated as
---------
such as, the corporation's Chief Financial Officer, and shall: (i) have charge
and custody of and be responsible for all funds and securities of the
corporation; receive and give receipts for moneys due and payable to the
corporation from any source whatsoever, and deposit all such moneys in the name
of the corporation in such depositories as shall be selected in accordance with
the provisions of Section 4 of Article VI of these Bylaws; (ii) maintain, or
cause to be maintained, appropriate accounting records as required by law; (iii)
prepare, or cause to be prepared, annual financial statements of the corporation
that include a balance sheet as of the end of the fiscal year and income and
cash flow statement for that year, which statements, or a written notice of
their availability, shall be mailed to each shareholder within 120 days after
the end of such fiscal year; and (iv) in general perform all of the duties
incident to the office of treasurer and such other duties as from time to time
may be prescribed by the President or by the Board of Directors.
Section 11. Assistant Officers. In the absence of a duly appointed
------------------
officer of the corporation, or in the event of his death, inability or refusal
to act, any person appointed by the Board of Directors and designated by title
as an assistant to that officer, unless otherwise determined by the Board of
Directors, may perform the duties of, and when so acting shall have all the
powers of and be subject to all the restrictions upon, that officer. Such
assistant officers shall perform such other duties as from time to time may be
prescribed by the President or by the Board of Directors.
ARTICLE VI
CONTRACTS, LOANS, CHECKS, AND DEPOSITS
--------------------------------------
Section 1. Contracts. The Board of Directors may authorize any officer or
---------
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. Also, the Board
of Directors may limit, condition, restrict or deny such authority to any
officer or officers, or any agent or agents.
Section 2. Loans. No loans shall be contracted on behalf of the
-----
corporation and no evidence of indebtedness shall be issued in its name unless
authorized by the Board of Directors. Such authority may be general or confined
to specific instances.
Section 3. Checks and Drafts. All checks, drafts, or other orders for the
-----------------
payment of money, issued in the name of the corporation, shall be signed by such
officer or officers, agent or agents of the corporation and in such manner as
shall from time to time be determined by the Board of Directors.
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Section 4. Deposits. All funds of the corporation not otherwise employed
--------
shall be deposited from time to time to the credit of the corporation in such
depositories as may be selected by or under the authority of the Board of
Directors.
ARTICLE VII
SHARES AND THEIR TRANSFER
-------------------------
Section 1. Certificate For Shares. The Board of Directors may authorize
----------------------
the issuance of some or all of the shares of the corporation's classes or series
without issuing certificates to represent such shares. If shares are
represented by certificates, the certificates shall be in such form as required
by law and as determined by the Board of Directors. Certificates shall be
signed, either manually or in facsimile, by the President or a Vice President,
and by the Secretary or Treasurer or an Assistant Secretary or an Assistant
Treasurer. All certificates for shares shall be consecutively numbered or
otherwise identified and entered into the stock transfer books of the
corporation. When shares are represented by certificates, the corporation shall
issue and deliver, to each shareholder to whom such shares have been issued or
transferred, certificates representing the shares owned by him. When shares are
not represented by certificates, then within a reasonable time after the
issuance or transfer of such shares, the corporation shall send the shareholder
to whom such shares have been issued or transferred a written statement of the
information required by law to be on certificates.
Section 2. Stock Transfer Books. The corporation shall keep or cause to
--------------------
be kept a book or set of books, to be known as the stock transfer books of the
corporation, containing the name of each shareholder of record, together with
such shareholder's address and the number and class or series of shares held by
him. Transfers of shares of the corporation shall be made only on the stock
transfer books of the corporation (i) by the holder of record thereof or by his
legal representative, who shall provide proper evidence of authority to
transfer; (ii) by his attorney authorized to effect such transfer by power of
attorney duly executed and filed with the Secretary; and (iii) on surrender for
cancellation of the certificate for such shares (if the shares are represented
by certificates).
Section 3. Lost Certificates. The Board of Directors may direct a new
-----------------
certificate to be issued in place of any certificate theretofore issued by the
corporation claimed to have been lost or destroyed, upon receipt of an affidavit
of such fact from the person claiming the certificate to have been lost or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors shall require that the owner of such lost or destroyed certificate, or
his legal representative, give the corporation a bond in such sum and with such
surety or other security as the Board of Directors may direct as indemnity
against any claims that may be made against the corporation with respect to the
certificate claimed to have been lost or destroyed, except where the Board of
Directors by resolution finds that in the judgment of the Board of Directors the
circumstances justify omission of a bond.
Section 4. Distribution or Share Dividend Record Date. The Board of
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Directors may fix a date as the record date for determining shareholders
entitled to a distribution or share dividend. If no record date is fixed by the
Board of Directors for such determination, it is the date the Board of
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Directors authorizes the distribution or share dividend.
Section 5. Holder of Record. Except as otherwise required by law, the
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corporation may treat the person in whose name the shares stand of record on its
books as the absolute owner of the shares and the person exclusively entitled to
receive notification and distributions, to vote, and to otherwise exercise the
rights, powers, and privileges of ownership of such shares.
Section 6. Shares Held by Nominees. The corporation shall recognize the
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beneficial owner of shares registered in the name of the nominee as the owner
and shareholder of such shares for certain purposes if the nominee in whose name
such shares are registered files with the Secretary a written certificate in a
form prescribed by the corporation, signed by the nominee, indicating the
following: (i) the name, address, and taxpayer identification number of the
nominee; (ii) the name, address, and taxpayer identification number of the
beneficial owner; (iii) the number and class or series of shares registered in
the name of the nominee as to which the beneficial owner shall be recognized as
the shareholder; and (iv) the purposes for which the beneficial owner shall be
recognized as the shareholder.
The purposes for which the corporation shall recognize the beneficial owner
as the shareholder may include the following: (i) receiving notice of, voting
at, and otherwise participating in shareholders' meetings; (ii) executing
consents with respect to the shares; (iii) exercising dissenters' rights under
the North Carolina Business Corporation Act; (iv) receiving distributions and
share dividends with respect to the shares; (v) exercising inspection rights;
(vi) receiving reports, financial statements, proxy statements, and other
communications from the corporation; (vii) making any demand upon the
corporation required or permitted by law; and (viii) exercising any other rights
or receiving any other benefits of a shareholder with respect to the shares.
The certificate shall be effective ten (10) business days after its receipt
by the corporation and until it is changed by the nominee, unless the
certificate specifies a later effective time or an earlier termination date.
If the certificate affects less than all of the shares registered in the
name of the nominee, the corporation may require the shares affected by the
certificate to be registered separately on the books of the corporation and be
represented by a share certificate that bears a conspicuous legend stating that
there is a nominee certificate in effect with respect to the shares represented
by that share certificate.
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ARTICLE VIII
GENERAL PROVISIONS
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Section 1. Distributions. The Board of Directors may from time to time
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authorize, and the corporation may grant, distributions and share dividends to
its shareholders pursuant to law and subject to the provisions of its Articles
of Incorporation.
Section 2. Seal. The corporate seal of the corporation shall consist of
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two concentric circles between which is the name of the corporation and in the
center of which is inscribed SEAL; and such seal, as impressed or affixed on the
margin hereof, is hereby adopted as the corporate seal of the corporation.
Section 3. Fiscal Year. The fiscal year of the corporation shall be fixed
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by the Board of Directors.
Section 4. Amendments. Except as otherwise provided in the Articles of
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Incorporation or by law, these Bylaws may be amended or repealed and new Bylaws
may be adopted by the Board of Directors.
No Bylaw adopted, amended, or repealed by the shareholders shall be
readopted, amended, or repealed by the Board of Directors, unless the Articles
of Incorporation or a Bylaw adopted by the shareholders authorizes the Board of
Directors to adopt, amend, or repeal that particular Bylaw or the Bylaws
generally.
Section 5. Definitions. Unless the context otherwise requires, terms used
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in these Bylaws shall have the meanings assigned to them in the North Carolina
Business Corporation Act to the extent defined therein.
ARTICLE IX
INDEMNIFICATION
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In addition to any indemnification required or permitted by law, and except
as otherwise provided in these Bylaws, any person who at any time serves or has
served as a director, officer, employee or agent of the Corporation and any such
person who serves or has served at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or as a trustee or administrator under an employee
benefit plan, shall have a right to be indemnified by the Corporation to the
full extent allowed by applicable law against liability and litigation expense
arising out of such status or activities in such capacity. "Liability and
litigation expense" shall include costs and expenses of litigation (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
which are actually and reasonably
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incurred in connection with or as a consequence of any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, including appeals.
Promptly after the final disposition or termination of any matter which
involves liability or litigation expense as described above or at such earlier
time as it sees fit, the Corporation shall determine whether any person
described in this Article IX is entitled to indemnification thereunder. Such
determination shall be limited to the following issues: (i) whether the persons
to be indemnified are persons described in this Article IX, (ii) whether the
liability or litigation expense incurred arose out of the status or activities
of such persons as described in this Article IX, (iii) whether liability was
actually incurred and/or litigation expense was actually and reasonably
incurred, and (iv) whether the indemnification requested is permitted by
applicable law. Such determination shall be made by a majority vote of directors
who were not parties to the action, suit or proceeding (or, in connection with
"threatened" actions, suits or proceedings, who were not "threatened parties").
If at least two such disinterested directors are not obtainable, or, even if
obtainable, if at least half of the number of disinterested directors so direct,
such determination shall be made by independent legal counsel in written
opinion.
Litigation expense incurred by a person described in this Article IX in
connection with a matter described in this Article IX may be paid by the
Corporation in advance of the final disposition or termination of such matter,
if the Corporation receives an undertaking, dated, in writing and signed by the
person to be indemnified, to repay all such sums unless such person is
ultimately determined to be entitled to be indemnified by the Corporation as
provided in this Article IX. Requests for payments in advance of final
disposition or termination shall be submitted in writing unless this requirement
is waived by the Corporation.
Notwithstanding the foregoing, no advance payment shall be made as to any
payment or portion of a payment for which the determination is made that the
person requesting payment will not be entitled to indemnification. Such
determination may be made only by a majority vote of disinterested directors or
by independent legal counsel as next provided. If there are not at least two
disinterested directors, the notice of all requests for advance payment shall be
delivered for review to independent legal counsel for the Corporation. Such
counsel shall have the authority to disapprove any advance payment or portion of
a payment for which it appears that the person requesting payment will not be
entitled to indemnification.
The Corporation shall not be obligated to indemnify persons described in
this Article IX for any amounts paid in settlement unless the Corporation
consents in writing to the settlement. The Corporation shall not unreasonably
withhold its consent to proposed settlements. The Corporation's consent to a
proposed settlement shall not constitute an agreement by the Corporation that
any person is entitled to indemnification hereunder. The Corporation may waive
the requirement of this section for its written consent as fairness and equity
may require.
A person described in this Article IX may apply to the Corporation in
writing for indemnification or advance expenses. Such applications shall be
addressed to the Secretary or, in
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the absence of the Secretary, to any officer of the Corporation. The Corporation
shall respond in writing to such applications as follows: to a request for
indemnity under this Article IX, within ninety days after receipt of the
application; to a request for advance expenses under this Article IX, within
fifteen days after receipt of the application.
If any action is necessary or appropriate to authorize the Corporation to
pay the indemnification required by these Bylaws, the Board of Directors shall
take such action, including (i) making a good faith evaluation of the
indemnification request, (ii) giving notice to, and obtaining approval by, the
shareholders of the Corporation, and (iii) taking any other action.
The right to indemnification or advance expenses provided herein shall be
enforceable in any court of competent jurisdiction. A legal action may be
commenced if a claim for indemnity or advance expenses is denied in whole or in
part, or upon the expiration of the time periods provided above. In any such
action, if the claimant establishes the right to indemnification, he or she
shall also have the right to be indemnified against the litigation expense
(including, without limitation, reasonable attorneys' fees) of such action.
As provided by N.C. Gen. Stat. (S)55-8-57, the Corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or who is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, or as a trustee or administrator under an employee benefit plan,
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
has the power to indemnify him against such liability.
The right to indemnification provided herein shall not be deemed exclusive
of any other rights to which any persons seeking indemnity may be entitled apart
from the provisions of this bylaw, except there shall be no right to
indemnification as to any liability or litigation expense for which such person
is entitled to receive payment under any insurance policy other than a
directors' and officers' liability insurance policy maintained by the
Corporation. Such right inures to the benefit of the heirs and legal
representatives of any persons entitled to such right. Any person who at any
time after the adoption of this bylaw serves or has served in any status or
capacity described in this Article IX, shall be deemed to be doing or to have
done so in reliance upon, and as consideration for, the right of indemnification
provided herein. Any repeal or modification hereof shall not affect any rights
or obligations then existing. The right provided herein shall not apply as to
persons serving institutions which are hereafter merged into or combined with
the Corporation, except after the effective date of such merger or combination
and only as to status and activities after such date.
If this Article or any portion hereof shall be invalidated on any ground by
any court or agency of competent jurisdiction, then the Corporation shall
nevertheless indemnify each person described in this Article IX to the full
extent permitted by the portion of this Article that is not invalidated and also
to the full extent (not exceeding the benefits described herein) permitted or
required by other applicable law.
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Peoples Bancorp of North Carolina, Inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF NORTH CAROLINA
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 710577 10 7
THIS IS TO CERIFY THAT
Is the owner of
Fully paid and non-assessable shares of the common stock, no par value, of
Peoples Bancorp of North Carolina, Inc.
Transferable only on the books of the Corporation in person or by duly
authorized Attorney upon surrender of this Certificate properly endorsed
This Certificate is not valid until countersigned and registered by the
Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
/s/ Joseph F. Beaman, Jr.
EXECUTIVE VICE PRESIDENT, CORPORATE SECRETARY AND TREASURER
/s/ TONY W. WOLFE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
COUNTERSIGNED AND REGISTERED:
REGISTRAR AND TRANSFER COMPANY
(CRANFORD, NEW JERSEY)
TRANSFER AGENT AND REGISTRAR
BY:
AUTHORIZED SIGNATURE
[Seal of Peoples Bancorp of North Carolina, Inc.]
<PAGE>
KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST,
STOLEN, MUTILATED OR DESTROYED, THE CORPORATION
WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.
PEOPLES BANCORP
Of North Carolina, Inc.
The following abbreviations in the inscription on the face of this certificate,
shall be construed as though they were written in full according to applicable
laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as tenants in common
GMA/UTMA--__ (Cus) _____ Custodian _______ (Minor) _____ under Uniform
Gifts/Transfers to Minors ___ (State) ______.
Additional abbreviations may also be used though not in the above list.
For Value Received, ________ hereby sell, assign and transfer unto
PLEASE INSERTSOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEEE_________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNER)
Shares of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ________________________________ Attorney to
transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.
Dated ____________________
Notice: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:_______________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM). PURSUANT TO
S.E.C. Rule 17Ad-15.
