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EXHIBIT 3.2
ARTICLES OF AMENDMENT TO THE CHARTER
OF
AMERICAN RETIREMENT CORPORATION
Pursuant to the provisions of Section 48-16-102 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its charter:
1. The name of the corporation is American Retirement Corporation.
2. The text of each amendment adopted is:
The following shall be inserted at the end of Article 8(b):
Pursuant to the authority vested in the Board of Directors in
accordance with the provisions of this Article 8 of the Charter, the
Board of Directors does hereby create, authorize and provide for the
issuance of the Series A Junior Preferred Stock out of the class of
5,000,000 shares of preferred stock, no par value per share (the
"Preferred Stock"), having the voting powers, designation, relative,
participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth
as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as Series A Junior Preferred Stock ("Series A
Preferred Stock") and the number of shares constituting such series
shall be 2,000,000. Such number of shares may be adjusted by
appropriate action of the Board of Directors.
Section 2. Dividends and Distributions. Subject to the prior
and superior rights of the holders of any shares of any other series of
Preferred Stock or any other shares of Preferred Stock of the
corporation ranking prior and superior to the shares of Series A
Preferred Stock with respect to dividends, each holder of one
one-hundredth (1/100) of a share (a "Unit") of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends at
the same rate as dividends are paid with respect to the Common Stock.
In the event that the corporation shall at any time after December 7,
1998 (the "Rights Dividend Declaration Date") (i) declare or pay any
dividend on outstanding shares of Common Stock payable in shares of
Common Stock, or (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case the amount to which the holder of a
Unit of Series A Preferred Stock was entitled immediately prior to such
event pursuant to the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be
the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which shall be the number of
shares of Common Stock that were outstanding immediately prior to such
event.
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Section 3. Voting Rights. The holders of Units of Series A
Preferred Stock shall have the following voting rights.
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the
shareholders of the corporation. In the event the corporation shall at
any time after the Rights Dividend Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares, then in each such case the number of votes per Unit
to which holders of Units of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of Units of Series A Preferred stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted
to a vote of shareholders of the corporation.
(C) Except as set forth herein or required by law, holders of
Units of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of shares of Common Stock as set forth
herein) for the taking of any corporate action.
Section 4. Reacquired Shares. Any Units of Series A Preferred
Stock purchased or otherwise acquired by the corporation in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such Units shall, upon their cancellation,
become authorized but unissued Units of Preferred Stock to be created
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
Section 5. Liquidation. Upon any liquidation, dissolution or
winding up of the corporation, whether voluntary or involuntary, the
holders of Units of Series A Preferred Stock shall be entitled to share
in any assets remaining ratably with the holders of the Common Stock.
In the event the corporation shall at any time after the Rights
Dividend Declaration Date (i) increase by way of stock split or similar
transaction the number of outstanding shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of
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shares, then in each such case the aggregate amount to which holders of
Units of Series A Preferred Stock were entitled prior to such event
shall be adjusted by multiplying such amount by a fraction, the
numerator of which shall be the number of shares of Common Stock that
are outstanding immediately after such event and the denominator of
which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. Share Exchange, Merger, Etc. In case the
corporation shall enter into any share exchange, merger, combination or
other transaction in which the shares of Common Stock are exchanged for
or converted into other stock or securities, cash and/or any other
property, then in any such case Units of Series A Preferred Stock shall
at the same time be similarly exchanged for or converted into an amount
per Unit (subject to the provision for adjustment hereinafter set
forth) equal to the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is converted or exchanged. In the
event the corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, or (ii) subdivide
outstanding shares of Common Stock, or (iii) combine outstanding Common
Stock into a smaller number of shares, then in each such case the
amount set forth in the immediately preceding sentence with respect to
the exchange or conversion of Units of Series A Preferred Stock shall
be adjusted by multiplying such amount by a fraction the numerator of
which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 7. Redemption. The Units of Series A Preferred Stock
shall not be redeemable at the option of the corporation or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the
corporation may acquire Units of Series A Preferred Stock in any other
manner permitted by law and the Charter or Bylaws of the corporation.
Section 8. Ranking. The Units of Series A Preferred Stock
shall rank junior to all other series of the Preferred Stock and to any
other class of preferred stock that hereafter may be issued by the
corporation as to the payment of dividends and the distribution of
assets, unless the terms of any such series or class shall provide
otherwise.
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Section 9. Amendment. The Charter, including without
limitation the provisions hereof, shall not hereafter be amended,
either directly or indirectly, or through merger or share exchange with
another corporation, in any manner that would alter or change the
powers, preferences or special rights of the Series A Preferred Stock
so as to affect the holders thereof adversely without the affirmative
vote of the holders of a majority or more of the outstanding Units of
Series A Preferred Stock, voting separately as a class.
Section 10. Fractional Shares. The Series A Preferred Stock
may be issued in Units or other fractions of a share, which Units or
fractions shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock.
3. The amendment was duly adopted on November 18, 1998 by the board of
directors at a duly called meeting of the board of directors.
Date: November 19, 1998
AMERICAN RETIREMENT CORPORATION
/s/ H. Todd Kaestner
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By: H. Todd Kaestner
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Title: EVP - Corporate Development
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