AMENDED ARTICLES OF INCORPORATION
OF
AMERICAN FINANCIAL CORPORATION
FIRST. The name of the corporation shall be AMERICAN
FINANCIAL CORPORATION (the "Corporation").
SECOND. The place in Ohio where its principal office is to
be located is the City of Cincinnati in Hamilton County,
Ohio 45202.
THIRD. The purpose for which the Corporation is organized
shall be to engage in any lawful act or acts for which corpora
tions may be formed under the Ohio General Corporation Law, Ohio
Revised Code '1701.01 et seq..
FOURTH. The aggregate number of shares of stock which the
Corporation shall have authority to issue is Twenty-Eight Million
(28,000,000) shares, which shall be divided into two classes,
consisting of:
(a) Eight Million (8,000,000) shares of preferred
stock ("Preferred Shares") without par value; and
(b) Twenty Million (20,000,000) shares of common stock
("Common Shares") without par value.
PART ONE: PREFERRED STOCK
Clause 1. Except as otherwise provided by this Article
Fourth or by the amendment or amendments adopted by the Board of
Directors providing for the issue of any series of Preferred
Shares, the Preferred Shares may be issued at any time or from
time to time in any amount, not exceeding in the aggregate,
including all shares of any and all series thereof theretofore
issued, the Eight Million (8,000,000) Preferred Shares
hereinabove authorized, as Preferred Shares of one or more
series, as hereinafter provided, and for such lawful
consideration as shall be fixed from time to time by the Board of
Directors.
Four Million (4,000,000) Preferred Shares shall have voting
rights as provided in Clause 2 of this Part One of Article Fourth
(collectively, "Voting Preferred Shares"). Two Million Nine
Hundred Thousand (2,900,000) Voting Preferred Shares shall be
designated "Series J Preferred Stock" and shall have the voting
rights, designations, powers, preferences and related
participating, optional and other special rights and the
qualifications, limitations or restrictions thereof set forth in
Part Two of this Article Fourth.
Four Million (4,000,000) Preferred Shares shall have no
voting power whatsoever, except as may be otherwise provided by
law or except as may arise upon a default, failure or other
contingency (collectively, "Non-Voting Preferred Shares").
All shares of any one series of Preferred Shares shall be
alike in every particular, each series thereof shall be
distinctively designated by letter or descriptive words, and all
series of Preferred Shares shall rank equally and be identical in
all respects except as provided above with respect to Voting
Preferred Shares and Non-Voting Preferred Shares or as permitted
by the provisions of Clause 2 of this Part One of Article Fourth.
Clause 2. Authority is hereby expressly granted to the Board
of Directors from time to time to adopt amendments to these
Articles of Incorporation providing for the issue in one or more
series of any unissued or treasury Preferred Shares, and
providing, to the fullest extent now or hereafter permitted by
the laws of the State of Ohio and notwithstanding the provisions
of any other Article of these Articles of Incorporation of the
Corporation, in respect of the matters set forth in the following
subdivisions (i) to (x), inclusive, as well as any other rights
or matters pertaining to such series:
(i) The designation and number of shares of such
series;
(ii) With respect to the Voting Preferred Shares only,
voting rights (to the fullest extent now or hereafter
permitted by the laws of the State of Ohio);
(iii) With respect to the Non-Voting Preferred
Shares only, voting rights upon a default, failure or other
contingency;
(iv) The dividend rate or rates of such series (which
may be a variable or adjustable rate and which may be
cumulative);
(v) The dividend payment date or dates of such series;
(vi) The price or prices at which shares of such series
may be redeemed;
(vii) The amount of the sinking fund, if any, to be
applied to the purchase or redemption of shares of such
series and the manner of its application;
(viii) The liquidation price or prices of such
series;
(ix) Whether or not the shares of such series shall be
made convertible into, or exchangeable for, shares of any
other class or classes or of any other series of the same
class of stock of the Corporation or any other property, and
if made so convertible or exchangeable, the conversion price
or prices, or the rates of exchange at which such conversion
or exchange may be made and the adjustments thereto, if any;
and
(x) Whether or not the issue of any additional shares
of such series or any future series in addition to such
series shall be subject to any restrictions and, if so, the
nature of such restrictions.
Any of the voting rights (with respect to the Voting Preferred
Shares only), voting rights upon a default, failure or other
contingency (with respect to the Non-Voting Preferred Shares
only), dividend rate or rates, dividend payment date or dates,
redemption rights and price or prices, sinking fund requirements,
liquidation price or prices, conversion or exchange rights and
restrictions on issuance of shares of any such series of
Preferred Shares may, to the fullest extent now or hereafter
permitted by the laws of the State of Ohio, be made dependent
upon facts ascertainable outside these Articles of Incorporation
or outside the amendment or amendments providing for the issue of
such Preferred Shares adopted by the Board of Directors pursuant
to authority expressly vested in it by this Article Fourth. If
the then-applicable laws of the State of Ohio do not permit the
Board of Directors to fix, by the amendment creating a series of
Voting Preferred Shares, the voting rights of shares of such
series, each holder of a share of such series of Voting Preferred
Shares shall, except as may be otherwise provided by law, be
entitled to one (1) vote for each share of Voting Preferred
Shares of such series held by such holder.
Clause 3. Before any dividends shall be declared or paid
upon or set apart for, or distribution made on, the Common Shares
and before any sum shall be paid or set apart for the purchase or
redemption of Preferred Shares of any series, except for any
series that may be established as senior to or having preference
over the terms of any other series, whether or not outstanding at
the time of adoption of the amendment creating such Preferred
Series by the Board of Directors, or for the purchase of the
Common Shares, the holders of Preferred Shares of each series
shall be entitled to receive, if and when declared by the Board
of Directors, dividends at the rate or rates fixed for such
series in accordance with the provisions of this Article Fourth,
and no more, from the dividend payment date of, or next preceding
the date of, issue thereof, payable on the payment date or dates
fixed from time to time by the Board of Directors.
Clause 4. After full dividends as aforesaid upon the
Preferred Shares of all series then outstanding shall have been
paid for all past dividend periods, and after or concurrently
with making payment of or provision for full dividends on the
Preferred Shares of all series then outstanding for the current
dividend period, then and not otherwise dividends may be declared
upon the Common Shares at such rate as the Board of Directors may
determine and no holders of any series of the Preferred Shares,
as such, shall be entitled to share therein.
Clause 5. If upon any dissolution, liquidation or winding up
of the Corporation or reduction of its capital stock, the assets
so to be distributed among the holders of the Preferred Shares
pursuant to the provisions of this Article Fourth or of the
amendment or amendments providing for the issue of such Preferred
Shares adopted by the Board of Directors pursuant to authority
expressly vested in it by this Article Fourth shall be
insufficient to permit the payment to such holders of the full
preferential amounts aforesaid, the entire assets of the
Corporation shall be distributed ratably among the holders of the
Preferred Shares in proportion to the full preferential amounts
to which they are respectively entitled as in proportion to the
full preferential amounts to which they are respectively entitled
as aforesaid. After payment to the holders of the Preferred
Shares of the full preferential amounts hereinbefore provided
for, the holders of the Preferred Shares, as such, shall have no
right or claim to any of the remaining assets of the Corporation
and the remaining assets to be distributed, if any, shall be
distributed to the holders of the Common Shares.
Clause 6. The term "accrued dividends", whenever used herein
with respect to the Preferred Shares of any series, means those
amounts which would have been paid as dividends on the Preferred
Shares of such series to date had full dividends been paid
thereon at the rate and on the dates fixed for payment for such
series in accordance with the provisions of this Article Fourth,
less in each case the amount of all dividends paid upon the
shares of such series and the dividends deemed to have been paid
as provided in Clause 3 of this Part One of Article Fourth.
Clause 7. Preferred Shares of any series redeemed or
purchased by the Corporation shall be retired and canceled and
shall not be reissued by the Board of Directors of the
Corporation and shall be restored to the status of authorized but
unissued Preferred Shares. The Board of Directors shall, upon
the redemption or repurchase of all the outstanding shares of any
series of Preferred Shares, adopt an amendment to these Articles
of Incorporation to eliminate all references to the shares of
such series of Preferred Shares and to make such other
appropriate changes as are required by such elimination.
PART TWO: SERIES J PREFERRED STOCK
Pursuant to the Amended and Restated Merger Agreement dated
October 3, 1997 pursuant to which AFC Acquisition Corp., a wholly-
owned subsidiary of the Corporation, shall merge with and into
the Corporation ("Merger"), the Articles of Incorporation of the
Corporation are amended and restated as of the Effective Time of
the Merger, thereby providing, among other things, for the issue
of a series of Preferred Shares of the Corporation from the
Corporation's class of Four Million (4,000,000) shares of Voting
Preferred Shares, without par value, to be designated "Series J
Preferred Stock" ("Series J Preferred Stock"), such issue to
consist of up to Two Million Nine Hundred (2,900,000) shares,
which number of shares may be increased or decreased (but not
below the number of shares thereof then outstanding) from time to
time by the Board of Directors, and to the extent that the voting
rights, designations, powers, preferences and relative
participating, optional or other special rights and the
qualifications, limitations or restrictions of the Series J
Preferred Stock are not stated and expressed in these Articles of
Incorporation, the Board of Directors does hereby fix and herein
state and express the voting rights, designations, powers,
preferences and relative participating, optional or other special
rights and the qualifications, limitations or restrictions
thereof, as follows (all terms used herein which are defined in
these Articles of Incorporation shall be deemed to have the
meanings provided therein):
1. Voting. Except as provided below in Paragraph 5 of this
Part Two of Article Fourth, holders of shares of Series J
Preferred Stock are entitled to one (1) vote per share on all
matters to be voted upon by shareholders of the Corporation, with
holders of the Corporation's Common Shares, and not as a separate
class.
2. Dividends. The holders of the Series J Preferred Stock
shall be entitled to receive, when, as, and if declared by the
Board of Directors and out of the assets of the Corporation which
are by law available for the payment of dividends, cumulative
preferential dividends in the manner and at the rates set forth
below. Each of said shares shall have an annual dividend rate of
$2.00 and no more. Dividends shall be payable in equal payments
of $1.00 per share semi-annually on May 1 and November 1 of each
year to holders of record as of the preceding April 15 and
October 15.
Dividends on shares of Series J Preferred Sock shall be
paid in cash.
No dividend or other distribution whatsoever shall be
declared or paid upon or set apart for any class of stock or
series thereof ranking junior to the Series J Preferred Stock as
to the payment of dividends, nor shall any shares of any class of
stock or series thereof ranking junior to the Series J Preferred
Stock as to payment of dividends be redeemed or purchased by the
Corporation or any subsidiary thereof, nor shall any moneys be
paid to or made available for a sinking fund for the redemption
or purchase of any shares of any class of stock or series thereof
ranking junior to the Series J Preferred Stock as to payment of
dividends, unless in each instance, full dividends on all
outstanding shares of Series J Preferred Stock for all past
dividend periods shall have been paid at the rate fixed therefor.
Dividends upon shares of the Series J Preferred Stock
shall be payable by check to the registered holders of Series J
Preferred Stock at the address set forth in the books and records
of the Corporation or any transfer agent and/or registrar
appointed for the Series J Preferred Stock and shall commence to
accrue and be cumulative from their respective dates of issuance.
3. Rights on Liquidation or Cash-Out Merger.
A. (1) Upon the liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary,
holders of shares of Series J Preferred Stock shall be entitled
to receive, out of assets of the Corporation available for
distribution to stockholders after satisfying claims of
creditors, a liquidating distribution in the amount of $25.00 per
share, which shall be the liquidation preference of such shares,
plus an amount equal to accrued dividends on each such share to
and including the date fixed for payment of Series J Preferred
Stock, and no more.
(2) Such amount shall be paid to the holders of the
Series J Preferred Stock prior to any distribution or payment to
the holders of any class of stock or series thereof ranking
junior to the Series J Preferred Stock in the payment of
dividends or distributions of assets on liquidation, dissolution
or winding up of the affairs of the Corporation.
(3) After the payment to holders of shares of Series J
Preferred Stock of the full amount of the liquidating
distributions to which they are entitled pursuant to the second
next preceding sentence, holders of the shares of Series J
Preferred Stock (in their capacity as such holders) shall have no
right or claim to any of the remaining assets of the Corporation.
B. In any merger or consolidation of the Corporation with or
into any other corporation, including any person (including any
individual, partnership, corporation, trust, unincorporated
association, joint venture or other entity) controlled by, in
control of, or under common control with the Corporation
("Affiliate"), or a merger or consolidation of any other
corporation, including any Affiliate, with or into the
Corporation, which merger or consolidation by its terms provides
for the payment of only cash to holders of the Series J Preferred
Stock, each holder of Series J Preferred Stock shall be entitled
to receive an amount equal to the liquidation preference of the
shares of Series J Preferred Stock held by such holder, plus an
amount equal to accrued dividends on such shares to and including
the date of payment thereof, and no more, in exchange for such
shares of Series J Preferred Stock (a "Cash-Out Merger").
C. Neither the sale, lease or exchange (for cash, stock,
securities or other consideration) of all or substantially all of
the property and assets of the Corporation, nor the merger or
consolidation of any other corporation with or into the
Corporation, nor the merger or consolidation of the Corporation
with or into any other corporation, shall be deemed to be a
dissolution, liquidation or winding up of the affairs of the
Corporation, voluntary or involuntary, for the purposes of this
Paragraph 3 of Part Two of Article Fourth; provided, however,
that any Cash-Out Merger shall be deemed to be a liquidation of
the Corporation solely for purposes of determining the rights of
the holders of shares of Series J Preferred Stock in respect of
such Cash-Out Merger.
D. If upon liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
assets of the Corporation available for distribution to the
holders of Series J Preferred Stock and any other preferred stock
of the Corporation, ranking upon liquidation on a parity with the
Series J Preferred Stock (the "Liquidation Preferred"), shall be
insufficient to pay the full amount of the liquidating
distributions to which holders of Series J Preferred Stock are
entitled pursuant to Paragraph 3A of this Part Two of Article
Fourth and liquidating distributions to which holders of the
Liquidation Preferred are entitled, then such assets shall be
distributed among the holders of Series J Preferred Stock and
Liquidation Preferred ratably in proportion to the full amount of
distributions to which each holder of Series J Preferred Stock
and Liquidation Preferred would have been entitled.
4. Redemption.
A. Optional Redemption. The Corporation shall not have the
right to redeem any shares of Series J Preferred Stock until
December 2, 2005. Thereafter, the Corporation shall have the
right, at its option, and by resolution of its Board of
Directors, upon notice as required by Paragraph 4B of this Part
Two of Article Fourth, to redeem the Series J Preferred Stock out
of funds legally available therefor, as a whole or in part, at
the redemption prices set forth below, plus all accrued dividends
thereon to the date fixed for redemption (against receipt of
certificates evidencing the shares redeemed), if redeemed during
the twelve month period beginning on December 2 of the years
indicated:
Year Amount Per Share
2005 $25.75
2006 $25.375
2007 and thereafter $25.00
B. Notice of Redemption. Notice of any redemption
specifying the date fixed for said redemption shall be mailed,
postage prepaid, at least 25 days but not more than 60 days prior
to said redemption date to the holders of record of the Series J
Preferred Stock to be redeemed at their respective addresses as
the same shall appear on the books and records of the Corporation
or any transfer agent and/or registrar for the Series J Preferred
Stock. If less than all of the Series J Preferred Stock
outstanding is to be redeemed, the Corporation shall select by
lot those shares which are to be redeemed. If such notice of
redemption shall have been mailed, and if on or before the
redemption date specified in such notice all funds necessary for
such redemption shall have been set aside by the Corporation
separate and apart from its other funds, in trust for the account
of the holders of the shares so to be redeemed, so as to be and
continue to be available therefor, then, on and after said
redemption date, notwithstanding that any certificate for shares
of the Series J Preferred Stock so called for redemption shall
not have been surrendered for cancellation, the shares
represented thereby so called for redemption shall be deemed to
be no longer outstanding, the right to receive dividends thereon
shall cease to accrue, and all rights with respect to such shares
of the Series J Preferred Stock so called for redemption shall
forthwith cease and terminate, except for the right to receive
the amount set aside in trust for redemption thereof, but without
interest.
5. Rights in the Event of Dividend Arrearage; Class Voting
Rights. In addition to the voting rights set forth in Paragraph
1 of this Part Two of Article Fourth, holders of Series J
Preferred Stock shall have the voting rights set forth below:
A. If at any time the Corporation shall not have paid full
dividends for each of four or more consecutive semi-annual
dividends payable on the Series J Preferred Stock pursuant to
Paragraph 2 hereof, the number of directors constituting the
Board of Directors of the Corporation shall be increased by two
and the holders of the Series J Preferred Stock shall have the
right, voting as one class, to elect the directors to fill such
newly created directorships. This right shall remain vested
until all accrued dividends on any Series J Preferred Stock have
been paid, or declared and set apart for payment, at which time
(i) the right to so elect directors shall terminate (subject to
revesting in the case of any subsequent default of the kind
described above); (ii) the term of the directors then in office
elected by such holders shall terminate; and (iii) the number of
directors constituting the Board of Directors of the Corporation
shall be reduced by the number of directors by which it was
increased pursuant to this subparagraph.
Whenever such right shall vest, it may be exercised
initially either at a special meeting of holders of such
preferred stock or at any annual stockholders' meeting, but
thereafter it may be exercised at stockholders' meetings called
for the purpose of electing directors. A special meeting for the
exercise of such right shall be called by the Secretary of the
Corporation as promptly as possible, and in any event within 10
days after receipt of a written request signed by the holders of
record of at least 50% of the outstanding shares of such
preferred stock. Notwithstanding the provisions of this
subparagraph 5A of this Part Two of Article Fourth, no such
special meeting shall be held during the 90-day period preceding
the date regularly fixed for the annual meeting of stockholders.
Any director who shall have been elected by the holders
of Series J Preferred Stock shall hold office for a term expiring
(subject to the earlier termination of the arrearage in
dividends) at the next annual meeting of stockholders. During
such term such directors may be removed at any time, without
cause, by, and only by, the affirmative votes of the holders of
record of a majority of the outstanding shares of Series J
Preferred Stock given at a special meeting of such stockholders
called for the purpose, except as otherwise provided by Ohio law
with respect to cumulative voting rights. Any vacancy created by
such removal may also be filled at such meeting. A meeting for
the removal of a director elected by the holders of Series J
Preferred Stock and the filling of the vacancy created thereby
shall be called by the Secretary of the Corporation within 10
days after receipt of a written request signed by the holders of
record of at least 50% of the outstanding shares of such
preferred stock.
Any vacancy caused by the death or resignation of a
director who shall have been elected by the holders of the Series
J Preferred Stock may be filled by the remaining director elected
under these provisions, or if none, by the holders of Series J
Preferred Stock at a meeting called for such purpose. Such
meeting shall be called by the Secretary of the Corporation at
the earliest practicable date after any such death or resignation
and in any event within 10 days after receipt of a written
request signed by the holders of record of at least 50% of the
outstanding shares of such preferred stock.
At such meeting, the presence in person or by proxy of
the holders of a majority of the outstanding shares of the Series
J Preferred Stock, as the case may be, shall be required to
constitute a quorum; in the absence of a quorum, a majority of
the holders of the Series J Preferred Stock present in person or
by proxy shall have the power to adjourn the meeting from time to
time without notice, other than announcement at the meeting,
until a quorum shall be present.
B. Any action requiring the vote of the Series J Preferred
Stock voting separately as a class under Ohio law shall be taken
by the affirmative vote of the holders of a two-thirds of such
class or, if permitted by Ohio law, by the affirmative vote of a
majority of such class.
FIFTH. No holder of any shares of this Corporation shall
have any preemptive rights to subscribe for or to purchase any
shares of this Corporation of any class, whether such shares or
such class be now or hereafter authorized, or to purchase or
subscribe for securities convertible into, or exchangeable for,
shares of any class or to which shall be attached or appertained
any warrants or rights entitling the holder thereof to purchase
or subscribe for shares of any class.
SIXTH. This Corporation, through its Board of Directors,
shall have the right and power to purchase any of its outstanding
shares at such price and upon such terms as may be agreed upon
between the Corporation and any selling shareholder.
SEVENTH. The affirmative vote of shareholders entitled to
exercise a majority of the voting power of this Corporation shall
be required to amend these Articles of Incorporation, approve
mergers and to take any other action which by law must be
approved by a specified percentage of the voting power of the
Corporation or all outstanding shares entitled to vote.
EIGHTH. The provisions of Ohio Revised Code '1701.831 or
any successor provisions relating to control share acquisitions
shall not be applicable to this Corporation.
NINTH. The provisions of Ohio Revised Code Chapter 1704 or
any successor provisions relating to the transactions involving
interested shareholders shall not be applicable to this Corpo
ration.
TENTH. No shareholder shall have the right to vote
cumulatively in the election of directors.
ELEVENTH. These Amended Articles of Incorporation take the
place of and supersede the existing Articles of Incorporation as
heretofore amended and restated.