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RESTATED
ARTICLES OF INCORPORATION
OF
CARDINAL REALTY SERVICES, INC.
FIRST. The name of the corporation is CARDINAL REALTY SERVICES, INC.
(the "Corporation").
SECOND. The principal office of the Corporation in the State of Ohio is
to be located in the City of Columbus, Franklin County.
THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code.
FOURTH. The number of shares which the Corporation is authorized to
have outstanding is 15,000,000 shares, consisting of 1,500,000 shares of no par
value Preferred Stock (hereinafter called "Preferred Stock"), and 13,500,000
shares of no par value Common Stock (hereinafter called "Common Stock").
The express terms of the shares of each class are as follows:
Paragraph I - Express Terms of the Preferred Stock
Section 1. The Preferred Stock may be issued from time to time in one
or more series. All shares of Preferred Stock shall be of equal rank and shall
be identical, except in respect of the matters that may be fixed by the
Corporation's directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except that in the case
of series on which dividends are cumulative the dates from which dividends are
cumulative may vary to reflect differences in the date of issue. Subject to the
provisions of this Section, which provisions shall apply to all Preferred Stock,
the directors hereby are authorized to cause such shares to be issued in one or
more series and with respect to each such series prior to the issuance thereof
to fix:
A. The designation of the series which may be by distinguishing number,
letter and/or title.
B. The number of shares of the series, which number the directors may
(except where otherwise provided in the creation of the series) increase or
decrease (but not below the number of shares thereof then outstanding).
C. The dividend rate of the series.
D. The dates at which dividends, if declared, shall be payable, whether
such dividends shall be cumulative or non-cumulative and, if cumulative, the
dates from which dividends shall be cumulative.
E. The redemption rights and price or prices, if any, for shares of the
series.
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F. The terms and amount of any sinking fund provided for the purchase
or redemption of shares of the series.
G. The amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation.
H. Whether the shares of the series shall be convertible into shares of
any other class or series of the Corporation, and, if so, the specification of
such other class or series, the conversion price or prices, any adjustments
thereof, the date or dates as of which such shares shall be convertible, and
other terms and conditions upon which such conversion may be made.
I. Restrictions on the issuance of shares of the same series or of any
other class or series.
The Corporation's directors are authorized to adopt from time to time
amendments to these Amended Articles of Incorporation fixing, with respect to
each such series, the matters described in clauses (a) to (i), inclusive, of
this Section.
Section 2. The holders of Preferred Stock of each series, in preference
to the holders of Common Stock and of any other class of shares ranking junior
to the Preferred Stock, shall be entitled to receive out of any funds legally
available and when and as declared by the Corporation's directors dividends in
cash at the rate for such series fixed in accordance with the provisions of
Section 1 of this Paragraph and no more, payable on the dates fixed for such
series. In the event dividends for a series are determined to be cumulative in
accordance with the provisions of Section 1 of this Paragraph, such dividends
shall be cumulative, in the case of shares of each particular series, from and
after the date or dates fixed with respect to such series. No dividends may be
paid upon or declared or set apart for any of the Preferred Stock for any
dividend period unless:
A. as to each series of Preferred Stock entitled to cumulative
dividends, dividends for all past dividend periods shall have been paid or shall
have been declared and a sum sufficient for the payment thereof set apart; and
B. as to all series of Preferred Stock, dividends for the current
dividend period shall have been paid or be or have been declared and a sum
sufficient for the payment thereof set apart ratably in accordance with the
amounts which would be payable as dividends on the shares of the respective
series for the current dividend period if all dividends for the current dividend
period were declared and paid in full.
No dividend in respect of past dividend periods shall be paid upon or
declared and set apart for payment on any of the Preferred Stock entitled to
cumulative dividends unless there shall be or have been declared and set apart
for payment on all outstanding shares of Preferred Stock entitled to cumulative
dividends, dividends for past dividend periods ratably in accordance with the
amounts which would be payable on the shares of the series entitled to
cumulative dividends if all dividends due for all past dividend periods were
declared and paid in full.
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Section 3. In no event, so long as any Preferred Stock shall be
outstanding, shall any dividends, except a dividend payable in Common Stock or
other shares ranking junior to the Preferred Stock, be paid or declared or any
distribution be made except as aforesaid on the Common Stock or any other shares
ranking junior to the Preferred Stock, nor shall any Common Stock or any other
shares ranking junior to the Preferred Stock be purchased, retired or otherwise
acquired by the Corporation:
A. Unless in each case all accrued and unpaid dividends on Preferred
Stock, including the full dividends for the current dividend period, shall have
been declared and paid or a sum sufficient for payment thereof set apart; and
B. Unless in each case there shall be no arrearages with respect to the
redemption of Preferred Stock of any series from any sinking fund provided for
shares of such series in accordance with the provisions of Section 1 of this
Paragraph.
Section 4.
A. The holders of Preferred Stock of any series, in the event of
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, shall be entitled to receive in full out of the assets of
the Corporation, including its capital, before any amount shall be paid or
distributed among the holders of the Common Stock or any other shares ranking
junior to the Preferred Stock, the amounts fixed with respect to shares of such
series in accordance with Section 1 of this Paragraph, plus an amount equal to
all dividends accrued and unpaid thereon to the date of payment of the amount
due pursuant to such liquidation, dissolution or winding up of the affairs of
the Corporation. In case the net assets of the Corporation legally available
therefor are insufficient to permit the payment upon all outstanding shares of
Preferred Stock of the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably upon outstanding
shares of Preferred Stock in proportion to the full preferential amount to which
each such share is entitled.
After payment to holders of Preferred Stock of the full preferential
amounts as aforesaid, holders of Preferred stock as such shall have no right or
claim to any of the remaining assets of the Corporation.
B. The merger or consolidation of the Corporation into or with any
other corporation, or the merger of any other corporation into the Corporation,
or the sale, lease or conveyance of all or substantially all the property or
business of the Corporation shall not be deemed to be a dissolution, liquidation
or winding up, voluntary or involuntary, for the purposes of this Section 4.
Section 5. Except as otherwise expressly provided herein or as required
by law, the holders of Preferred Stock shall be entitled to vote on all matters
upon which holders of Common Stock have the right to vote and, with respect to
such vote, shall be entitled to notice of any shareholders' meeting in
accordance with the Corporation's Code of Regulations, and shall be entitled to
a number of votes equal to the number of shares of Common Stock into which such
shares of
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Preferred Stock could then be converted, at the record date for the
determination of shareholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. Except as otherwise expressly provided
herein, or to the extent class or series voting is otherwise required by law or
agreement, the holders of Preferred Stock or Common Stock shall vote together as
a single class and not as separate classes.
Section 6. For the purpose of this Paragraph I, whenever reference is
made to shares "ranking junior to the Preferred Stock," such reference shall
mean and include all shares of the Corporation in respect of which the rights of
the holders thereof as to the payment of dividends and as to distributions in
the event of a voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation are junior and subordinate to the rights of
the holders of Preferred Stock.
Paragraph II - Express Terms of the Common Stock
The Common Stock shall be subject to the express terms of the Preferred
Stock and of any series thereof. The terms and provisions of each share of
Common Stock shall be identical to every other share of Common Stock. The
holders of shares of Common Stock shall be entitled to one vote for each share
of such stock upon all matters presented to the shareholders.
FIFTH. No holder of any class of shares of the Corporation shall have
any pre-emptive right to purchase or subscribe to any shares or other securities
of the Corporation.
SIXTH. No holder of any class of shares of the Corporation shall be
entitled to vote cumulatively in the election of Directors of the Corporation.
SEVENTH. The Corporation may from time to time, pursuant to
authorization by the Directors and without action by the shareholders, purchase
or otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Directors shall determine;
subject, however, to such limitation or restriction, if any, as is contained in
the Articles of Incorporation of the Corporation, including the express terms of
any class of shares of the Corporation outstanding, at the time of the purchase
or acquisition in question.
EIGHTH. The acquisition and transfer of, and the right of any Person to
acquire or transfer, shares of the Corporation shall be subject to the following
restrictions:
Paragraph I - Control Share Acquisition Restrictions.
Except as otherwise provided in this Article EIGHTH, Paragraph I, no
Person shall make a Control Share Acquisition without the prior authorization of
the Corporation's shareholders in accordance with the provisions of this Article
EIGHTH, Paragraph
I.
Section 1. PROCEDURE. In order to obtain authorization of a Control
Share Acquisition by the Corporation's shareholders, a Person who proposes to
make a Control Share Acquisition shall
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deliver to the Corporation at its principal executive office a notice (the
"Notice") that sets forth all of the following information:
A. The identity of the Person who is giving the Notice;
B. A statement that the Notice is given pursuant to this Article
EIGHTH, Paragraph I;
C. The number and class of shares of the Corporation owned, directly or
indirectly, by the Person who gives the Notice;
D. The range of voting power, described in this Article EIGHTH,
Paragraph I, Section 6 B.(1) under which the proposed Control Share Acquisition
would, if consummated, fall;
E. A description in reasonable detail of the terms of the proposed
Control Share Acquisition; and
F. Reasonable evidence that the proposed Control Share Acquisition, if
consummated, would not be contrary to law and that the Person who is giving the
Notice has the financial capacity to make the proposed Control Share
Acquisition.
Section 2. CALL OF SPECIAL MEETING OF SHAREHOLDERS. The Directors of
the Corporation shall, within twenty (20) days after receipt of such Notice by
the Corporation, call a special meeting of shareholders to be held not later
than fifty (50) days after receipt of the Notice by the Corporation, unless the
Person who delivered the Notice agrees to a later date, to consider the proposed
Control Share Acquisition; provided that the Directors shall have no obligation
to call such meeting (and the proposed Control Share Acquisition need not be
submitted to a vote of shareholders) if the Directors make a determination
within twenty (20) days after receipt of the Notice (i) that the Notice was not
given in good faith, (ii) that the proposed Control Share Acquisition would not
be in the best interests of the Corporation and its shareholders or (iii) that
the proposed Control Share Acquisition could not be consummated for financial or
legal reasons. The Directors may adjourn such meeting if, prior to such meeting,
the Corporation has received a Notice from any other Person and the Directors
have determined that the Control Share Acquisition proposed by such other Person
or a proposed merger, consolidation or sale of assets of the Corporation should
be presented to shareholders contemporaneously with the proposed Control Share
Acquisition at an adjourned meeting or at a special meeting held at a later
date.
Section 3. NOTICE OF SPECIAL MEETING. The Corporation shall, as
promptly as reasonably practicable, give notice of such special meeting to all
shareholders of record as of the record date set for such meeting whether or not
entitled to vote thereat. Such notice shall include or be accompanied by a copy
of the Notice and by a statement of the Corporation, authorized by the
Directors, of its position or recommendation, or that it is taking no position
or making no recommendation, with respect to the proposed Control Share
Acquisition. Section 4. REQUIREMENTS FOR APPROVAL. The Person who delivered the
Notice in respect of which a meeting of shareholders is called by the Directors
may make the proposed Control
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Share Acquisition if both of the following occur: (i) the shareholders of the
Corporation who hold shares of the Corporation entitling them to vote in the
election of Directors authorize such acquisition at the special meeting, at
which a quorum is present, by the affirmative vote of a majority of the voting
power of all outstanding shares of the Corporation entitled to vote in the
election of Directors and of a majority of the portion of such voting power
excluding the voting power of Interested Shares; and (ii) such acquisition is
consummated, in accordance with the terms so authorized, not later than three
hundred and sixty (360) days following shareholder authorization of the Control
Share Acquisition. A quorum shall be deemed to be present at such special
meetings if at least a majority of the voting power of the Corporation in the
election of Directors, and a majority of the portion of such voting power
excluding the voting power of interested Shares, are represented at such meeting
in person or by proxy.
Section 5. VIOLATION OF RESTRICTION. Any transaction or other event
which would, directly or indirectly, result in a Control Share Acquisition by
any Person in violation of this Article EIGHTH, Paragraph I, shall be valid only
with respect to such number of shares as does not result in a violation of this
Article EIGHTH, Paragraph I, and such acquisition or transfer shall be null and
void ab initio with respect to the remainder of such shares (any such remainder
of shares being hereinafter called "Excess Shares"). Until the Excess Shares are
transferred to a Person, if any, whose acquisition thereof will not be null and
void, the purported transferor (the "Purported Transferor") of the Excess Shares
shall continue to own the Excess Shares and have all rights (including all
voting rights and all rights to any dividends or other distributions) incident
to ownership of such Excess Shares, unless (i) the Purported Transferor and the
purported transferee (the "Purported Transferee") may be deemed to have become
one and the same Person, or (ii) the purported acquisition was pursuant to the
Plan of Reorganization of the Corporation in exchange for a Purchased Claim.
If (i) the last clause of the first sentence in the foregoing paragraph
(that is, the clause declaring certain attempted acquisitions or transfers to be
null and void ab initio) is determined to be invalid or unenforceable, (ii) if
the Purported Transferor and Purported Transferee may be deemed to have become
one and the same Person or (iii) the purported acquisition was pursuant to the
Plan of Reorganization in exchange for a Purchased Claim, the Purported
Transferee and any successor who holds Excess Shares shall (i) be conclusively
deemed to have acted as an agent on behalf of the Corporation in acquiring the
Excess Shares and to hold such Excess Shares on behalf of the Corporation and
(ii) deliver to the Corporation forthwith upon demand of the Corporation, all
certificates for such Excess Shares duly endorsed for transfer and cancellation.
As the equivalent of treasury securities for such purposes, the Excess Shares
shall not be entitled to any voting rights, shall not be considered to be
outstanding for quorum or voting purposes, and shall not be entitled to
participate in any dividends, interest or other distribution. Any Person who
receives dividends, interest or any other distribution with respect to Excess
Shares shall hold the same as agent for the Corporation and, following a
permitted transfer, for the transferee thereof. Notwithstanding the foregoing,
any holder of Excess Shares may transfer the same (together with any
distributions thereon) to any Person who, following such transfer, would not own
shares in violation of this Article EIGHTH, Paragraph I. Upon such permitted
transfer, the Corporation shall pay or distribute to the transferee any
distributions on the Excess Shares not previously paid or distributed.
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Section 6. DEFINITIONS. As used in this Article EIGHTH, Paragraph I:
A. "Person" includes, without limitation, an individual, a corporation
(whether non-profit or for profit), a partnership, an unincorporated society or
association, and two or more Persons having a joint or common interest,
including, without limitation, two or more Persons having any understanding,
relationship, agreement or other arrangement with respect to acquiring, holding,
voting or disposing of any shares of the Corporation entitled to vote in the
election of directors.
B. (1) "Control Share Acquisition" means the acquisition, directly or
indirectly, by any Person, of shares of the Corporation that, when added to all
other shares of the Corporation in respect of which such Person may exercise or
direct the exercise of voting power as provided in this Section 6 B.(1), would
entitle such Person, immediately after such acquisition, directly or indirectly,
alone or with others, to exercise or direct the exercise of the voting power of
the Corporation in the election of Directors within any of the following ranges
of such voting power:
(a) One-fifth or more but less than one-third of such
voting power;
(b) One-third or more but less than a majority of such
voting power;
(c) A majority or more of such voting power.
A bank, broker, nominee, trustee, or other Person who acquires shares
in the ordinary course of business for the benefit of others in good faith and
not for the purpose of circumventing this Article EIGHTH shall, however, be
deemed to have voting power only of shares in respect of which such Person would
be able, without further instructions from others, to exercise or direct the
exercise of votes at a meeting of shareholders called under this Article EIGHTH,
Paragraph I. For purposes of this Article EIGHTH, Paragraph I, the acquisition
of securities immediately convertible into shares of the Corporation with voting
power in the election of Directors shall be treated as an acquisition of such
shares.
(2) The acquisition of any shares of the Corporation does not
constitute a Control Share Acquisition for the purpose of this Article EIGHTH,
Paragraph I, if the acquisition was or is consummated in, results from, or is
the consequence of any of the following circumstances:
(a) By underwriters in good faith and not for the purpose
of circumventing this Article EIGHTH, Paragraph I in
connection with an offering of the securities of the
Corporation to the public;
(b) By bequest or inheritance, by operation of law upon
the death of an individual, or by any other transfer
without valuable consideration, including a gift,
that is made in good faith and not for the purpose of
circumventing this Article EIGHTH, Paragraph I;
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(c) Pursuant to the satisfaction of a pledge or other
security interest created in good faith and not for
the purpose of circumventing this Article EIGHTH,
Paragraph I;
(d) Pursuant to a merger or consolidation adopted, or a
combination or majority share acquisition authorized,
by shareholder vote in compliance with the provisions
of these Articles of Incorporation and Section
1701.78, or Section 1701.83, of the Ohio Revised Code
if the Corporation is the surviving or new
corporation in the merger or consolidation or is the
acquiring corporation in the combination or majority
share acquisition and if the vote of shareholders of
the surviving, new, or acquiring corporation is
required by the provisions of Section 1701.78 or
1701.83 of the Ohio Revised Code; or
(e) The acquisition of shares of the Corporation pursuant
to a Plan of Reorganization of the Corporation by any
Person in exchange for a Claim which is not a
Purchased Claim.
The acquisition by any Person of shares of the Corporation in a manner
described under this Section 6 B.(2) shall be deemed to be a Control Share
Acquisition authorized pursuant to this Article EIGHTH, Paragraph I within the
range of voting power under Section 6 B.(1)(a), (b) or (c) of this Article
EIGHTH, Paragraph I that such Person is entitled to exercise after such
acquisition, provided that, in the case of an acquisition in a manner described
under Section 6 B.(2)(b) or (c), the transferor of shares to such Person had
previously obtained any authorization of shareholders required under this
Article EIGHTH in connection with such transferor's acquisition of shares of the
Corporation.
(3) The acquisition of shares of the Corporation in good faith and not
for the purpose of circumventing this Article EIGHTH, Paragraph I from any
Person whose (a) Control Share Acquisition had previously been authorized by
shareholders in compliance with this Article EIGHTH or (b) previous acquisition
of shares would have constituted a Control Share Acquisition but for Section 6
B.(2), does not constitute a Control Share Acquisition for the purpose of this
Article EIGHTH unless such acquisition entitles the Person making such
acquisition, directly or indirectly, alone or with others, to exercise or direct
the exercise of voting power of the Corporation in the election of Directors in
excess of the range of such voting power authorized pursuant to this Article
EIGHTH, or deemed to be so authorized under Section 6 B.(2).
C. "Interested Shares" means shares of the Corporation with respect to
which any of the following Persons may exercise or direct the exercise of the
voting power in the election of Directors:
(1) any Person whose Notice prompted the calling of the meeting of
shareholders;
(2) any officer of the Corporation elected or appointed by the
Directors of the Corporation; and
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(3) any employee of the Corporation who is also a Director of the
Corporation.
D. "Interested Shares" also means any shares of the Corporation
acquired, directly or indirectly, by any Person from the holder or holders
thereof for a valuable consideration during the period beginning with the date
of the first public disclosure of a proposed Control Share Acquisition of the
Corporation or any proposed merger, consolidation, or other transaction that
would result in a change in control of the corporation or all or substantially
all of its assets and ending on the date of any special meeting of the
Corporation's shareholders held thereafter pursuant to this Article EIGHTH,
Paragraph I, for the purpose of voting on a Control Share Acquisition proposed
by any Person if either of the following applies:
(1) The aggregate consideration paid or given by the Person who
acquired the shares, and any other persons acting in concert
with him, for all such shares exceeds two hundred fifty
thousand dollars;
(2) The number of shares acquired by the Person who acquired the
shares, and any other persons acting in concert with him,
exceeds one-half of one percent of the outstanding shares of
the Corporation entitled to vote in the election of Directors.
E. "Plan of Reorganization" means the plan of reorganization of the
Corporation and certain of its substantively consolidated subsidiaries under
Chapter 11 of the United States Bankruptcy Code, duly confirmed by the United
States Bankruptcy Court for the Southern District of Ohio, Eastern Division, in
Case No. 2-89-O2779.
F. "Claim" means a claim against, interest in, or claim for an
administrative expense in the bankruptcy case concerning, the Corporation and
certain of its substantively consolidated subsidiaries, Case No. 2-89-02779,
United States Bankruptcy Court for the Southern District of Ohio, Eastern
Division.
G. "Purchased Claim" means a Claim acquired by a Person by purchase, or
otherwise for a valuable consideration paid, subsequent to the date of initial
filing of the Plan of Reorganization of the Corporation.
Section 7. PROXIES. No proxy appointed for or in connection with the
shareholder authorization of a Control Share Acquisition pursuant to this
Article EIGHTH, Paragraph I is valid if it provides that it is irrevocable. No
such proxy is valid unless it is sought, appointed, and received both:
A. In accordance with all applicable requirements of law; and
B. Separate and apart from the sale or purchase, contract or tender for
sale or purchase, or request or invitation for tender for sale or purchase, of
shares of the Corporation.
Section 8. REVOCABILITY OF PROXIES. Proxies appointed for or in
connection with the shareholder authorization of a Control Share Acquisition
pursuant to this Article EIGHTH,
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Paragraph I shall be revocable at all times prior to the obtaining of such
shareholder authorization, whether or not coupled with an interest.
Paragraph II - Tax Benefit Preservation Restrictions.
Section 1. DEFINITIONS. For the purposes of this Article EIGHTH,
Paragraph II:
A. "To Acquire" means to take action that, but for the provisions of
Section 2 hereof, would be, or, pursuant to Section 2 hereof, is, effective to
purchase or otherwise acquire (whether voluntarily or involuntarily) Stock;
B. "Acquisition" means any transaction pursuant to which Stock would
have been or is Acquired;
C. The meaning of "Act" is set forth in Section 6 hereof;
D. The meaning of "Board" is set forth in Section 2 B. hereof;
E. The meaning of "Carryovers" is set forth in Section 8 hereof;
F. The meaning of "Excess Shares" is set forth in Section 3 A.(l)
hereof;
G. "5-Percent Shareholder" means an individual who is a "5-percent
shareholder" within the meaning of Section 382, provided, however, (l) that any
entity which, if an individual, would be treated as a 5-percent shareholder
pursuant to Section 382 shall be deemed a "5-percent Shareholder" and (2) except
as the Board may otherwise provide in keeping with the purposes of this Article
Eighth, Paragraph II, any person who has received Stock from a 5-Percent
Shareholder, and any person who received Stock as compensation for services,
will be treated as a 5-Percent Shareholder, regardless of such person's actual
ownership of Stock;
H. "Initial Acquisition Stock" means, with respect to each Initial
5-Percent Shareholder, the total amount of Stock issued to such Initial
5-Percent Shareholder through the second anniversary of the Effective Date (as
defined in the Plan of Reorganization) on account of both Allowed Claims (as
defined in the Plan of Reorganization) and Disputed Claims (as defined in the
Plan of Reorganization);
I. "Initial 5-Percent Shareholder" means any Person who is a 5-Percent
Shareholder on the Effective Date, or who becomes a 5-Percent Shareholder on or
before the second anniversary of the Effective Date solely as the result of the
issuance of Stock to him on account of Allowed Claims or Disputed Claims;
J. The meaning of "Permitted Transferee" is set forth in Section 3
A.(1) hereof;
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K. The meaning of "Person" includes the entities set forth in Section
7701(a)(1) of the Internal Revenue Code of 1986, as amended (and any successors
thereto), and shall also include any group of persons treated as an entity under
Section 382;
L. The meaning of "Plan of Reorganization" is that set forth in Section
6 E. of Article EIGHTH, Paragraph I, above;
M. The meaning of "Proceeds" is set forth in Section 3 A.(4) hereof;
N. "Purported Owner" means any Person who Acquires any Stock in any
transaction that would be in violation of any prohibition set forth in Section 2
hereof;
O. The meaning of "Purported Owner's Transferor" is set forth in
Section 3 A.(1) hereof;
P. "Section 382" means Section 382 of the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder (and any successors
thereto);
Q. "Share Trustee" means the trustee of the Excess Shares nominated and
appointed by the Board from time to time;
R. "Special Initial Acquisition Stock" means, with respect to each
Initial 5-Percent Shareholder, the portion of the Initial Acquisition Stock
issued to such Initial 5-Percent Shareholder, determined as follows:
(a) with respect to each Initial 5-Percent Shareholder on the
Effective Date, an amount of such Initial Acquisition Stock determined
by multiplying the total number of shares of Initial Acquisition Stock
issued to such Initial 5-Percent Shareholder on the Effective Date by
the fraction (not to exceed one (1)) obtained by dividing six and
two-thirds percent (6-2/3%) by the percentage of all Stock issued on
the Effective Date on account of Allowed Claims and Disputed Claims
that is Initial Acquisition Stock.
(b) with respect to each Initial 5-Percent Shareholder who is
a 5-Percent Shareholder on the first anniversary of the Effective Date,
an amount or additional amount, as the case may be, of such Initial
Acquisition Stock determined by (i) multiplying the total number of
shares of Initial Acquisition Stock which have been issued to such
Initial 5-Percent Shareholder through the first anniversary of the
Effective Date by the fraction (not to exceed one (1)) obtained by
dividing thirteen and one-third percent (13-1/3%) by the percentage of
all Stock issued through the first anniversary of the Effective Date on
account of Allowed Claims and Disputed Claims that is Initial
Acquisition Stock and (ii) subtracting from such amount the total
number of shares of such Initial 5-Percent Shareholder's Initial
Acquisition Stock that have previously been treated as Special Initial
Acquisition Stock by reason of paragraph (a) above. If the amount
determined under this paragraph (b) for any Initial 5-Percent
Shareholder is a negative number, then (x) such negative number shall
not cause any portion of such Initial 5-Percent Shareholder's Initial
Acquisition Stock that was
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previously treated as Special Initial Acquisition Stock to lose its
characterization as Special Initial Acquisition Stock, and (y) the
number of shares of Initial Acquisition Stock of each Initial 5-Percent
Shareholder that would otherwise be treated as Special Initial
Acquisition Stock by reason of the application of this paragraph (b)
shall be reduced by an amount determined by multiplying such negative
number by the fraction determined by dividing the number of shares of
Initial Acquisition Stock of such Initial 5-Percent Shareholder that
would otherwise be treated as Special Initial Acquisition Stock by
reason of the application of this paragraph (b) by the total number of
shares of Initial Acquisition Stock that would otherwise be treated as
Special Initial Acquisition Stock by reason of the application of this
paragraph (b).
(c) with respect to each Initial 5-Percent Shareholder, an
amount or additional amount, as the case may be, of such Initial
Acquisition Stock determined by (i) multiplying the total number of
shares of Initial Acquisition Stock which have been issued to such
Initial 5-Percent Shareholder by the fraction not to exceed one (1)
obtained by dividing twenty percent (20%) by the percentage of all
Stock issued through the second anniversary of the Effective Date on
account of Allowed Claims and Disputed Claims that is Initial
Acquisition Stock and (ii) subtracting from such amount the total
number of shares of such Initial 5-Percent Shareholder's Initial
Acquisition Stock that have previously been treated as Special Initial
Acquisition Stock by reason of paragraphs (a) and (b) above. If the
amount determined under this paragraph (c) for an Initial 5-Percent
Shareholder is a negative number, then (x) such negative number shall
not cause any portion of such Initial 5-Percent Shareholder's Initial
Acquisition Stock that was previously treated as Special Initial
Acquisition Stock to lose its characterization as Special Initial
Acquisition Stock, and (y) the number of shares of Initial Acquisition
Stock of each Initial 5-Percent Shareholder that would otherwise be
treated as Special Initial Acquisition Stock by reason of the
application of this paragraph (c) shall be reduced by an amount
determined by multiplying such negative number by the fraction
determined by dividing the number of shares of Initial Acquisition
Stock of such Initial 5-Percent Shareholder that would otherwise be
treated as Special Initial Acquisition Stock by reason of the
application of this paragraph (c) by the total number of shares of
Initial Acquisition Stock that would otherwise be treated as Special
Initial Acquisition Stock by reason of the application of this
paragraph (c).
(d) For purposes of this Paragraph II, all Transfers of Stock
by an Initial 5-Percent Shareholder shall first be considered to be
Transfers of Special Initial Acquisition Stock until all of the Special
Initial Acquisition Stock held by such Initial 5-Percent Shareholder
has been deemed transferred in accordance with this provision.
S. "Stock" means stock of the Corporation as defined in Section 382,
including any direct or indirect ownership interests in the Corporation which,
pursuant to Section 382, are treated as stock of the Corporation, and any
options (as the term "option" is used in Section 382 but without regard to
whether or not the issuance, sale, transfer, disposition, purchase or
acquisition of any such option would result in an Ownership Change) to sell,
transfer, dispose of, purchase or acquire Stock of the Corporation;
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T. The meaning of "Termination Date" is set forth in Section 2 hereof;
U. To "Transfer" means to take action that, but for the provisions of
Section 2 hereof, would be, or, pursuant to Section 2 hereof, is, effective to
sell, transfer, otherwise dispose of, or, as in the case of an option or other
contingent interest, create, whether voluntarily or involuntarily, Stock, and
also means any transaction pursuant to which Stock would have been or is
Transferred;
V. "Transfer Agent" means the transfer agent or agents with respect to
the Stock designated by the Board of Directors from time to time;
W. The meanings of all other capitalized terms used in this Article
EIGHTH, Paragraph II, and not otherwise defined herein are those set forth in
Section 382..
Section 2. LIMITATIONS ON TRANSFER.
A. Except as otherwise provided in this Article EIGHTH, Paragraph II,
and except for transfers in satisfaction of Disputed Claims as provided in the
Plan, at no time from immediately after the Effective Date (as defined in the
Plan of Reorganization), until December 31, 2007 (the "Termination Date"), shall
any Person
(1)(a) Acquire any Stock if such Person's Acquisition of such
Stock would result in any 5-Percent Shareholder (or any Person who
would be a 5-Percent Shareholder if such Person's Disputed Claims were
to be allowed in full) holding, or being treated under Section 382 as
holding, additional Stock, or (b) Acquire any Stock if such Person's
Acquisition of such Stock would cause any Person to become a 5-Percent
Shareholder, or
(2) Transfer any Stock in a Transfer that would result in any
5-Percent Shareholder Transferring, or being treated under Section 382
as Transferring, Stock; and any Transfer or Acquisition of any Stock in
violation of this Section 2 shall be null and void ab initio, but, in a
case described in Section 2 A.(1)(b) hereof, only as to that portion of
Stock the Transfer or Acquisition of which violates Section 2 A.(1)(b).
B. (1) A Transfer or Acquisition shall not be prohibited and
shall not be null and void under Section 2 A. if (1) the Board of
Directors of the Corporation or a duly authorized committee thereof
(the "Board") duly approves and authorizes such Transfer or Acquisition
prior to such Transfer or Acquisition, which approval and authorization
must be granted unless the Board reasonably determines, as supported by
an opinion of the Corporation's outside tax professionals, both that
(a) the Transfer or Acquisition if permitted would, taken by itself (or
together With any transactions that have previously been effected, and
with any transactions that have not yet been effected but that might be
effected within the limitations of this Article Eighth, Paragraph II),
cause an "ownership change" within the meaning of Internal Revenue Code
Section 382(g) determined as if the percentage point limitation set
forth in Internal Revenue Code Section 382(g)(1)(A) were forty-five
(45) percentage points instead of fifty (50) percentage points (such
trigger event to be adjusted in the event of any change in the
applicable provisions of the Internal Revenue Code or the Treasury
Regulations promulgated pursuant thereto, as may be reasonably
necessary to effectuate the
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purpose of this Paragraph 2), and (b) such ownership change would occur
within two (2) years of the Effective Date (as defined in the Plan of
Reorganization) or would jeopardize the Corporation's ability to
utilize net operating losses, passive activity losses, or any other tax
attributes; or (2) such Stock is Transferred or Acquired by reason of
death, gift, divorce, separation or otherwise and, pursuant to the
terms of Section 382, the transferee of the Stock is treated as owning
such Stock during the period such Stock was owned by the Person from
whom it was acquired. The Board shall make any determination pursuant
to Section 2 B.(1) hereof within forty-five (45) days of (x) the date
the Board has received a written request for such a determination
together with evidence of a firm offer for the Stock to be Transferred
or Acquired or (y) the date the Board has received a written request
for such a determination not accompanied by such evidence of a firm
offer, such written requests without accompanying evidence of a firm
offer to be limited to one (1) request per calendar year for each
Person holding Stock in the Corporation. The Corporation, the Board and
the Directors of the Corporation shall be fully protected in deciding
whether or not to approve and authorize a Transfer or Acquisition
otherwise prohibited by this Article EIGHTH, Paragraph II.
(2) The Board shall take such measures as are feasible to
facilitate the free transferability of Special Initial Acquisition
Stock, even if such measures would have the effect of requiring the
Board to assume in the future that such Special Initial Acquisition
Stock has been Transferred in transactions constituting Owner Shifts
within the meaning of Section 382, thereby limiting the Board's ability
to approve Transfers of stock that is not Special Initial Acquisition
Stock. Such measures may include the legending of Special Initial
Acquisition Stock in such manner as would permit the Transfer of such
stock but subject to special restrictions. For example, if such action
is both feasible and consistent with the best interests of the
Corporation, the Board may, on consultation with the Corporation's
outside tax professionals, permit holders of Special Initial
Acquisition Stock to Transfer such stock generally without limitation,
provided the transferees of such stock neither hold, are deemed to
hold, nor are permitted to Acquire other Stock. As an additional
example, to the extent that the Board, on consultation with the
Corporation's outside tax professionals, deems such action to be
consistent with the best interests of the Corporation, the Board may
seek advice from the Internal Revenue Service, including advice by
private letter ruling, designed to facilitate the maximum feasible free
transferability of Special Initial Acquisition Stock.
Section 3. TREATMENT OF DISALLOWED TRANSFERS.
A. If, notwithstanding the foregoing prohibition, a Person shall,
voluntarily or involuntarily, become a Purported Owner of Stock in an
Acquisition described by Section 2 A.(1) of this Article EIGHTH, Paragraph II,
and that is null and void pursuant to Section 2 of this Article EIGHTH,
Paragraph II, then:
(1) Notwithstanding any other provision of this Section 3 A.,
the Purported Owner shall not obtain any rights In and to any such
Stock that has been Acquired in such an Acquisition to the extent of
the number of shares or amount of Stock that causes such Acquisition to
be so null and void (the "Excess Shares"), and the Transfer of the
Excess Shares to the Purported Owner shall not be recognized by the
Corporation, the Transfer Agent or any other agent of the Corporation.
Until the Excess Shares are Transferred to a Person, if any, whose
Acquisition thereof will not be null and void (a "Permitted
Transferee"), the Transferor of the Excess Shares to the
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Purported Owner (the "Purported Owner's Transferor") shall continue to
own the Excess Shares and have all rights, including all voting rights
and all rights to any dividends or other distributions, liquidating or
otherwise, incident to ownership of such Excess Shares. All Excess
Shares will continue to be issued and outstanding.
(2) If the Transfer Agent obtains possession of any
certificate or other evidence of purported ownership representing any
Excess Shares, the Transfer Agent shall deliver such certificate or
other evidence to the Share Trustee in trust for the benefit of the
Purported Owner's Transferor, and such Share Trustee shall proceed
forthwith to attempt to sell or cause the sale of the Excess Shares to
a Permitted Transferee. The Share Trustee shall take all lawful action
to cause the Purported Owner to deliver or cause delivery of the Excess
Shares and any indicia of ownership thereof to the Share Trustee. The
Purported Owner shall to the Share Trustee and, upon obtaining
possession thereof, the Share Trustee shall proceed forthwith to
attempt to sell or cause the sale of the Excess Shares to a Permitted
Transferee. The Share Trustee shall attempt to sell or cause the sale
of the Excess Shares in the then existing public market or in such
other commercially reasonable fashion as the Corporation shall direct.
In performing the duties herein imposed upon it, the Share Trustee
shall act at all times as the agent of the Purported Owner's
Transferor.
(3) Once the Excess Shares are Acquired by a Permitted
Transferee, the Permitted Transferee shall have and shall be entitled
to exercise all rights incident to the ownership of such Excess Shares
from the date of the Acquisition thereof by the Permitted Transferee;
and
(4) The Proceeds from the sale of the Excess Shares to the
Permitted Transferee (the "Proceeds") shall be distributed as follows:
(i) first, to the Share Trustee, the Transfer Agent and the Corporation
for all costs incurred in respect of the administration and sale of the
Excess Shares (and in the event that the Proceeds are insufficient to
reimburse the Share Trustee, the Transfer Agent and the Corporation for
all costs incurred in respect of the administration and sale of the
Excess Shares the Purported Owner shall reimburse the Share Trustee,
the Transfer Agent and the Corporation for such costs), (ii) second, to
the Purported Owner, if known, in an amount up to the amount paid by
the Purported Owner, if determinable, for the Excess Shares, and (iii)
third, to the Purported Owner's Transferor, if known, and if not known,
to the Corporation for the benefit of the Purported Owner's Transferor.
Notwithstanding anything in this Article EIGHTH, Paragraph II, to the
contrary the Corporation shall at all times be entitled to make
application to any court of equitable jurisdiction within the State of
Ohio for an adjudication of the respective rights and interests of any
Person in and to the Proceeds or any portion thereof, pursuant to this
Article EIGHTH, Paragraph Il, and applicable law, and for leave to pay
the Proceeds or any portion thereof into such court.
B. (1) If a Person shall, voluntarily or involuntarily,
Transfer any Stock the Transfer of which is described by Section 2 A.
(2) hereof and the Transfer of which is null and void pursuant to
Section 2 hereof, then:
(a) The Purported Owner of such Transferred Stock
shall not obtain any rights in and to any such Stock; and
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(b) The Person Transferring such Stock shall be
liable for any and all losses, costs and damages suffered by
the Corporation, the Transfer Agent, the Share Trustee, the
Purported Owner and any other party to the prohibited
Transfer.
(2) In any case in which a Transfer of Stock would be null and
void pursuant to Section 2, and would be described in both the Section
2 A.(l) prohibition on Acquisitions and the Section 2 A.(2) prohibition
on Transfers, then, notwithstanding anything to the contrary contained
in this Article EIGHTH, Paragraph II, the terms of Section 3 A. of this
Article EIGHTH, Paragraph II, shall not apply and the Transfer shall be
governed by the terms of this Section 3 B. of this Article EIGHTH,
Paragraph II.
Section 4. REQUIREMENT OF NOTICE. Immediately upon the Transfer or
Acquisition of any Stock in violation of Section 2 hereof, the Purported Owner
and the Purported Owner's Transferor thereof shall give, or cause to be given,
written notice thereof to the Corporation. Each owner of Stock shall furnish to
the Corporation all information reasonably requested with respect to all Stock
in which such Person has a direct or indirect ownership interest (both as
defined in Section 382).
Section 5. ACTIONS BY BOARD. Upon a determination by the Board that a
Person has Acquired or Transferred, or may Acquire or Transfer, Stock in
violation of Section 2 hereof, the Board may take such action as it deems
advisable to prevent any such Transfer or Acquisition and to refuse to give
effect to such Transfer or Acquisition on the books and records of the
Corporation, including, without limitation, to cause the Transfer Agent to
refuse to record the Purported Owner as the record owner of such Stock, to
refuse to issue Stock upon the exercise or purported or attempted exercise of
options to Acquire Stock (which options constitute Stock that has been
Transferred or Acquired in violation of Section 2 of this Article EIGHTH,
Paragraph II), and to institute proceedings to enjoin any such Transfer or
Acquisition.
Section 6. BOARD'S RELIANCE ON CERTAIN FILINGS. Pursuant to Section
382, in determining whether any Person has become a Purported Owner, the
Corporation, the Transfer Agent and the Share Trustee are each entitled to rely
on the existence and absence of filings on Schedules 13D and 13G (or any similar
schedules), to the extent such filings are required by Rule 13d-1 under the
Securities Exchange Act of 1934, as amended (the "Act"), and any successor rule,
regulation or statute, to identify any Person who is a 5-Percent Shareholder,
and the existence or absence of any amendment to Schedules 13D and 13G showing
any material increase or decrease in the percentage of Stock owned by such
Person, as required by Rule 13d-2 under the Act. The Board shall be fully
protected in relying on the items set forth in the foregoing sentence, together
with such other items or sources of information as may be required or permitted
from time to time by Section 382 or as available to the Corporation, to
determine whether any Person has become or is attempting to become a Purported
Owner of Stock.
Section 7. SEVERABILITY. If any provision of this Article EIGHTH,
Paragraph II, or any application of any such provision is determined to be
invalid by any federal or state court having jurisdiction to make such a
determination, the remaining provisions will remain valid and other applications
of such provision shall be affected only to the extent necessary to comply with
the
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determination of such court, and this Article EIGHTH, Paragraph II, will be
construed, in the absence of such provision, to give effect to the purpose of
this Article EIGHTH, Paragraph II, to the maximum extent possible.
Section 8. PURPOSES OF THIS PARAGRAPH. The purpose of this Article
EIGHTH, Paragraph II, is to facilitate the Corporation's ability to preserve and
utilize net operating losses, passive activity losses and other tax attributes
to which the Corporation, in the absence of limitations, is entitled from time
to time under the Internal Revenue Code of 1986, as amended (the "Carryovers"),
and to that end the Board is authorized to take such action, to the extent
permitted by law and not inconsistent with this Article EIGHTH, Paragraph II, as
it may deem necessary or advisable to protect the Corporation and the interests
of holders of its equity and debt securities by preservation of the
Corporation's ability to preserve and utilize its Carryovers.
Section 9. REGULATIONS AND PROCEDURES OF BOARD. The Board may, to the
extent permitted by law, from time to time establish, modify, amend or rescind,
by regulation, bylaw or otherwise, regulations and procedures not inconsistent
with the provisions of this Article EIGHTH, Paragraph II, for determining
whether any Acquisition or Transfer of Stock would jeopardize the Corporation's
ability to preserve and utilize its Carryovers and for the orderly application,
administration and implementation of the provisions of this Article EIGHTH,
Paragraph II. Such procedures and regulations shall be kept on file with the
Secretary of the Corporation and with its Transfer Agent and shall be made
available for inspection by the public and, upon request, shall be mailed to any
registered holder of Stock of the Corporation.
Section 10. ACCELERATION OF TERMINATION DATE. Notwithstanding the
provisions of this Article EIGHTH, Paragraph II, and its purposes, at least once
annually, the Board shall consider whether the tax benefit preservation
restrictions set forth in this Paragraph II continue to be necessary to ensure
the utilization by the Corporation of its net operating losses, passive activity
losses or any other tax attributes. If the Board determines, after
consideration, that such restrictions are no longer necessary, the Board shall
by resolution accelerate the Termination Date to an earlier date. In the event
the Board accelerates the Termination Date, the Corporation shall notify all
registered holders of Stock of the Corporation, and provide a copy of the notice
to all stock exchanges on which the Corporation's Stock is then listed and to
the Transfer Agent.
Section 11. VALIDITY OF TRANSFERS APPROVED BY BOARD. The provisions of
this Article EIGHTH, Paragraph II, shall not restrict, prohibit or affect the
validity of any Transfer or Acquisition of Stock approved by the Board.
Section 12. ADDITIONAL LEGEND. All certificates evidencing ownership of
shares of Stock shall bear, immediately below, and in addition to, the legend
prescribed by Article EIGHTH, Paragraph IV, the following two conspicuous
legends:
"ANY TRANSFER OR ACQUISITION OR PURPORTED OR ATTEMPTED TRANSFER OR
ACQUISITION OF ANY OF THE SHARES OF STOCK REPRESENTED HEREBY IN
VIOLATION OF SUCH RESTRICTIONS SHALL BE NULL AND VOID AB INITIO. FOR
PURPOSES OF THE RESTRICTIONS, `TRANSFERS' OF STOCK GENERALLY
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INCLUDE, IN ADDITION TO SALES OR OTHER DISPOSITIONS, THE PLEDGING OF
STOCK AND THE GRANTING OF OPTIONS TO ACQUIRE, OR OTHER CONTINGENT
RIGHTS IN, STOCK; AND `ACQUISITIONS' OF STOCK GENERALLY INCLUDE, IN
ADDITION TO THE RECEIPT OF STOCK PURSUANT TO SALES OR OTHER TRANSFERS,
THE RECEIPT OF RIGHTS UNDER PLEDGES, OPTIONS, OR OTHER CONTINGENT
INTERESTS IN STOCK.
IF THE HOLDER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE IS
A 5-PERCENT SHAREHOLDER AS DEFINED IN ARTICLE EIGHTH OF THE
CORPORATION'S ARTICLES OF INCORPORATION, THE HOLDER OF THE SHARES OF
STOCK REPRESENTED HEREBY GENERALLY IS PROHIBITED FROM ACQUIRING ANY
ADDITIONAL SHARES OF STOCK OF THE CORPORATION AND IS PROHIBITED FROM
ACQUIRING ANY OPTIONS TO PURCHASE OR ANY OTHER CONTINGENT INTERESTS IN
SHARES OF STOCK OF THE CORPORATION, ABSENT APPROVAL AND AUTHORIZATION
BY THE BOARD OF DIRECTORS OF THE CORPORATION PURSUANT TO ARTICLE EIGHTH
OF THE CORPORATION'S ARTICLES OF INCORPORATION. A 5-PERCENT SHAREHOLDER
INCLUDES, WITHOUT LIMITATION, ANY PERSON WHO HAS RECEIVED ANY STOCK
FROM A 5-PERCENT SHAREHOLDER, AND ANY PERSON WHO HAS RECEIVED ANY STOCK
AS COMPENSATION FOR SERVICES. IN ADDITION, VARIOUS ATTRIBUTION RULES,
SUCH AS RULES AGGREGATING THE OWNERSHIP OF STOCK OF THE SAME FAMILY OR
MEMBERS OF GROUPS OF RELATED ENTITIES, MAY APPLY IN DETERMINING WHETHER
A PERSON IS A 5-PERCENT SHAREHOLDER."
Paragraph III - Amendments.
Notwithstanding any other provisions of these Articles of Incorporation
or the Regulations of the Corporation, as the same may be in effect from time to
time, or any provision of law that might otherwise permit a lesser vote of the
Directors or shareholders, but in addition to any affirmative vote of the
Directors or the holders of any particular class or series of shares required by
law, the Articles of Incorporation or the Regulations of the Corporation, as the
same may be in effect from time to time, the affirmative vote of at least eighty
(80) percent of the voting power of all outstanding shares of the Corporation
entitled to vote in the election of Directors shall be required to alter, amend
or repeal this Article EIGHTH or to adopt any provisions in the Articles of
Incorporation or Regulations of the Corporation, as the same may be in effect
from time to time, which are inconsistent with the provisions of this Article
EIGHTH.
Paragraph IV - Legend on Share Certificates.
Each certificate representing shares of the Corporation's capital stock
shall contain the following legend:
"TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
THE RESTRICTIONS AND OTHER PROVISIONS OF ARTICLE EIGHTH OF THE
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CORPORATION'S ARTICLES OF INCORPORATION AS THE SAME MAY BE IN EFFECT
FROM TIME TO TIME. UPON WRITTEN REQUEST DELIVERED TO THE SECRETARY OF
THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS, THE CORPORATION
WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF SUCH ARTICLE
EIGHTH WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT OF WRITTEN
REQUEST THEREFOR. BY ACCEPTING THIS CERTIFICATE THE HOLDER HEREOF
ACKNOWLEDGES THAT IT IS ACCEPTING SAME SUBJECT TO THE PROVISIONS OF
SAID ARTICLE EIGHTH AS THE SAME MAY BE IN EFFECT FROM TIME TO TIME AND
COVENANTS WITH THE CORPORATION AND EACH SHAREHOLDER THEREOF FROM TIME
TO TIME TO COMPLY WITH THE PROVISIONS OF SAID ARTICLE EIGHTH AS THE
SAME NAY BE IN EFFECT FROM TIME TO TIME."
NINTH. The provisions of Section 1701.831 of the Ohio Revised Code, as
amended from time to time, or any successor provision or provisions to said
sections, shall not apply with respect to any particular Control Share
Acquisition, as such is defined in said Section, regarding this Corporation so
long as Article EIGHTH of these Articles of Incorporation, as such Articles of
Incorporation may be amended from time to time, remains an Article of these
Articles of Incorporation and remains substantially in full force end effect,
disregarding any rendering of such Article EIGHTH resulting from any amendment
of these Articles of Incorporation.
TENTH. Except as otherwise provided in Article EIGHTH or in the further
provisions of this Article TENTH, notwithstanding any provision of the Ohio
Revised Code now or hereafter in force requiring for any purpose the vote,
consent, waiver or release of the holders of shares entitling them to exercise
two-thirds or any other proportion, of the voting power of the Corporation or of
any class or classes of shares thereof, such action may be taken by the vote,
consent, waiver or release of the holders of shares entitling them to exercise a
majority of the voting power of the Corporation or of such class or classes. The
foregoing shall not apply to shareholder action taken under Chapter 1704 of the
Ohio Revised Code, as such Chapter may be amended from time to time.
Section 1. REQUIREMENTS FOR APPROVAL. In addition to any affirmative
vote required by law or these Articles of Incorporation, any Related Party
Transaction shall require the affirmative vote of not less than both eighty
percent (80%) of the voting power of all outstanding shares of the Corporation
entitled to vote in the election of Directors and of sixty-six and two-thirds
percent (66 2/3%) of the portion of such voting power excluding the voting power
of Interested Shares.
Section 2. EXCEPTION. The provisions of Section 1 of this Article TENTH
shall not be applicable if the Continuing Directors of the Corporation by a
two-thirds vote have expressly approved the Related Party Transaction.
Section 3. DEFINITIONS. For the purpose of this Article TENTH:
(a) The term "Related Party Transaction" shall mean (i) any
merger or consolidation of the Corporation or a Subsidiary with a
Related Party, irrespective of which party, if either,
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is the surviving party, (ii) any sale, purchase, lease, exchange,
transfer, or other transactions (or series of transactions) between the
Corporation or a Subsidiary and a Related Party involving the
acquisition or disposition of assets for consideration of $3,000,000 or
more in value (except for transactions in the ordinary course of the
Corporation's business), (iii) the issuance or transfer by the
Corporation or a Subsidiary of any securities of the Corporation or of
a Subsidiary to a Related Party (other than an issuance or transfer of
securities which is effected (A) on a pro rata basis to all
shareholders of the Corporation or (B) pursuant to a Plan of
Reorganization of the Corporation to any Person in exchange for a
Claim), (iv) any reclassification of securities of the Corporation
(including any reverse stock split) or any recapitalization or other
transaction involving the Corporation or its Subsidiaries that would
have the effect of increasing the voting power of a Related Party,
except for any mandatory redemption required by the terms of
outstanding securities, or (v) the adoption of any plan or proposal for
the liquidation or dissolution of the Corporation in favor of which a
Related Party votes its shares.
(b) The term "Related Party" shall mean (i) any individual,
corporation, partnership, or other Person, group or entity which,
together with its Affiliates and Associates, is the beneficial owner of
five percent (5%) or "more of the voting power of the Corporation in
the election of Directors or (ii) any such Affiliate or Associate.
(c) A Person shall be a "beneficial owner" of any shares of
the Corporation entitled to vote generally in the election of
Directors:
(i) Which such Person or any of its Affiliates or
Associates beneficially owns, directly or indirectly; or
(ii) Which such Person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote
pursuant to any agreement, arrangement or understanding; or
(iii) Which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any such shares.
(d) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as in
effect on January 1, 1992 (or any subsequent provisions replacing such
Act, Rules or Regulations).
(e) The term "Subsidiary" shall mean any Affiliate of the
Corporation more than fifty percent (50%) of the outstanding securities
of which representing the right, other than
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as affected by events of default, to vote for the election of Directors
is owned by the Corporation or by another Subsidiary (or both).
(f) The term "Continuing Director" shall mean a Director who
either (i) was a member of the Board of Directors of the Corporation
immediately prior to the time that the Related Party involved in a
Related Party Transaction became a Related Party, or (ii) was
designated (before his or her initial election as a Director) as a
Continuing Director by a majority of the then Continuing Directors.
(g) The term "Interested Shares" shall mean shares of the
Corporation with respect to which any of the following Persons may
exercise or direct the exercise of the voting power in the election of
Directors:
(1) any Related Party involved in the Related Party
Transaction which is the subject of the vote of shareholders;
(2) any officer of the Corporation elected or
appointed by the Directors of the Corporation; and
(3) any employee of the Corporation who is also a
Director of the Corporation.
(h) The term "Plan of Reorganization" shall mean the plan of
reorganization of the Corporation and certain of its substantively
consolidated subsidiaries under Chapter 11 of the United States
Bankruptcy Code, duly confirmed by the United States Bankruptcy Court
for the Southern District of Ohio, Eastern Division, in Case No.
2-89-02779.
(i) The term "Claim" shall mean a claim against, interest in,
or claim for an administrative expense in the bankruptcy case
concerning, the Corporation and certain of its substantively
consolidated subsidiaries, Case No. 2-89-02779, United States
Bankruptcy Court for the Southern District of Ohio, Eastern Division.
(j) "Person" includes, without limitation, an individual, a
corporation (whether nonprofit or for profit), a partnership, an
unincorporated society or association, and two or more Persons having a
joint or common interest.
Section 4. A majority of the Continuing Directors shall have the power
and duty to determine conclusively for the purposes of this Article TENTH, on
the basis of information known to them, (a) whether a Person is a Related Party,
(b) whether a Person is an Affiliate or Associate of another, (c) whether a
transaction between the Corporation or a Subsidiary and a Related Party involves
the acquisition or disposition of assets for consideration of $3,000,000 or more
in value, and (d) such other matters with respect to which a determination or
interpretation is required under this Article TENTH.
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Section 5. FIDUCIARY OBLIGATIONS UNAFFECTED. Nothing contained in this
Article TENTH shall be construed to relieve any Related Party from any fiduciary
obligation imposed by law.
Section 6. AMENDMENTS. Notwithstanding any other provisions of these
Articles of Incorporation or the Regulations of the Corporation, as the same may
be in effect from time to time, or any provision of law which might otherwise
permit a lesser vote of the Directors or shareholders, but in addition to any
affirmative vote of the Directors or the holders of any particular class or
series of shares required by law, these Articles of Incorporation or Regulations
of the Corporation, as the same may be in effect from time to time, the
affirmative vote of at least eighty percent (80%) of the voting power of all
outstanding shares of the Corporation entitled to vote in the election of
Directors shall be required to alter, amend or repeal this Article TENTH or
adopt any provisions in the Articles of Incorporation or Regulations of the
Corporation, as the same may be in effect from time to time, which are
inconsistent with the provisions of this Article TENTH; provided, however, that
if any such amendment, alteration or repeal of, or adoption of provisions
inconsistent with, this Article TENTH is first approved by the affirmative vote
of two-thirds of the Continuing Directors of the Corporation, the affirmative
vote of a majority of the voting power of all outstanding shares of the
Corporation in the election of Directors shall be sufficient to approve any such
amendment, alteration or repeal of, or adoption of provisions inconsistent with,
this Article TENTH.
ELEVENTH. Any and every statute of the State of Ohio hereafter enacted,
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Articles of
Incorporation of the Corporation in the office of the Secretary of State of
Ohio.
TWELFTH. Notwithstanding anything contained in these Articles of
Incorporation to the contrary, the Corporation will not issue nonvoting equity
securities to the extent prohibited by Section 1123 of the United States
Bankruptcy Code as in effect on the effective date of the Plan of Reorganization
of the Corporation and certain of its substantively consolidated subsidiaries,
duly confirmed by the United States Bankruptcy Court for the Southern District
of Ohio, Eastern Division, in Case No. 2-89-02779; provided however, that this
Article TWELFTH (a) will have no further force and effect beyond that required
under Section 1123 of the United States Bankruptcy Code, (b) will have such
force and effect, if any, only for so long as such Section is in effect and
applicable to the Corporation, and (c) in all events may be amended or
eliminated in accordance with applicable law as from time to time in effect.
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