EXHIBIT 3.1
1998
AMENDED ARTICLES OF INCORPORATION
OF
JO-ANN STORES, INC.
FIRST: The name of the Corporation is JO-ANN STORES, INC.
SECOND: The place in the State of Ohio where its principle
office is located is the Village of Hudson, County of Summit.
THIRD: The purposes for which, and for any of which, it is
formed are:
a) To carry on the business of dealing in fabrics and in connection
therewith to buy and sell, at wholesale or retail, import, export,
manufacture, weave, produce, repair, adapt, prepare, use and otherwise
deal in, rubber, cotton, wool, silk, flax, glass, synthetic and all
other fibrous materials, goods and fabrics, and in goods and fabrics
into which rubber, cotton, wool, silk, flax, glass, synthetic or any
fibrous material enters as a component part.
b) To develop, manufacture, repair, treat, finish, buy, sell, and
generally deal in, in every manner, materials, articles and products of
every kind and description, and to do all things necessary or
incidental thereto, including owning, holding and dealing in, in every
manner, all real and personal property necessary or incidental to the
foregoing purposes.
c) In general to carry on any other lawful business whatsoever in
connection with the business of the Corporation or which is calculated,
directly or indirectly, to promote the interests of the Corporation or
to enhance the value of its properties, and to have and exercise all
rights, powers and privileges which are now or may hereafter be
conferred upon corporations by the laws of Ohio.
The Corporation reserves the right at any time and from time
to time to change substantially its purposes in any manner now or hereafter
permitted by statute.
FOURTH: The authorized number of shares of the Corporation is
155,000,000, consisting of 5,000,000 shares of Serial Preferred Stock without
par value ("Serial Preferred Shares"), 75,000,000 Class A Common Shares without
par value ("Class A Shares") and 75,000,000 Class B Common Shares without par
value ("Class B Shares") and together with the Class A Shares, the ("Common
Stock"). The shares of each class shall have the express terms set forth in this
Article Fourth.
DIVISION A: Express Terms of Serial Preferred Shares
1. The Serial Preferred Shares may be issued from time to time
in one or more series. Each Serial Preferred Share of any one series shall be
identical with each other share of the same series in all respects, except as to
the date from which dividends thereon shall be cumulative by reason of different
dates of issuance; and all Serial Preferred Shares of all series shall rank
equally and shall be identical, except in respect of the terms that may be fixed
by the Board of Directors as hereinafter provided. Subject to the provisions of
Sections 2 through 7 of this Division A, which provisions shall apply to all
Serial Preferred Shares of all series, the Board of Directors is hereby
authorized to cause Serial Preferred
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 or title.
(b) The number of shares of the series, which number the Board
of Directors may increase or decrease, except where otherwise provided in the
creation of the series.
(c) The dividend rate of the series.
(d) The dates on which dividends, if declared, shall be
payable and the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for
shares of the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) Whether the shares of the series shall be convertible into
Class A Shares and/or Class B Shares and, if so, the conversion rate or rates or
price or prices and the adjustments thereof, if any, and all other terms and
conditions upon which conversions may be made.
(h) 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.
(i) Restrictions (in addition to those set forth in Sections
6(b) and 6(c) of this Division A) on the issuance of shares of the same series
or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Articles of Incorporation or Amended Articles of Incorporation of the
Corporation fixing, with respect to each such series, the matters specified in
clauses (a) through (i) of this Section 1.
2. The holders of Serial Preferred Shares of each series, in
preference to the holders of Common Stock and any other class of shares ranking
junior to the Serial Preferred Shares, shall be entitled to receive, out of any
funds legally available and when and as declared by the Board of Directors, cash
dividends at the rate (and no more) for such series fixed in accordance with the
provisions of Section 1 of this Division A, payable quarterly on the dates fixed
for such series. 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 and set apart for any of
the Serial Preferred Shares for any quarterly dividend period unless at the same
time a like proportionate dividend for the same quarterly dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be declared and paid or a sum sufficient for payment thereof set apart for
the Serial Preferred Shares of all series.
3. So long as any Serial Preferred Shares are outstanding, no
dividend (except a dividend payable in Class A Shares or Class B Shares or in
other shares of the Corporation ranking junior to the Serial Preferred Shares)
shall be paid or declared or any distribution be made (except as aforesaid) in
respect of the Class A Shares or Class B Shares or in respect of other shares of
the Corporation ranking junior to the Serial Preferred Shares, nor shall any
Class A Shares or Class B Shares or any other shares
of the Corporation ranking junior to the Serial Preferred Shares be purchased,
retired or otherwise acquired by the Corporation (except out of the proceeds of
the sale of Class A Shares or Class B Shares or other shares of the Corporation
ranking junior to the Serial Preferred Shares received by the Corporation
subsequent to January 28, 1984).
(a) unless all accrued and unpaid dividends on the Serial
Preferred Shares of all series, including the full dividends for the current
quarterly dividend period, shall have been declared and paid or a sum sufficient
for payment thereof set apart, and
(b) unless redemption of Serial Preferred Shares of any series
shall have been effected from, and any required payment shall have been made
into, any sinking fund provided for shares of such series in accordance with the
provisions of Section 1 of this Division A.
4. (a) Subject to the express terms of each series and to the
provisions of Section 6(b)(iii) of this Division A, the Corporation (i) may from
time to time redeem all or any part of the Serial Preferred Shares of any series
at the time outstanding at the option of the Board of Directors at the
applicable redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division A, or (ii) shall from time to time make
such redemptions of the Serial Preferred Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price fixed in accordance with the provisions
of Section 1 of this Division A, together, in each case, with accrued and unpaid
dividends to the redemption date.
(b) Notice of every redemption shall be mailed by first
class mail, postage prepaid, to the holders of record of the Serial Preferred
Shares to be redeemed, at their respective addresses then appearing on the books
of the Corporation, not less than 30 or more than 60 days prior to the date
fixed for redemption. At any time before or after notice has been given as above
provided, the Corporation may deposit the aggregate redemption price of the
Serial Preferred Shares to be redeemed, together with accrued and unpaid
dividends thereon to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and surplus of more than
$50,000,000, named in such notice, directed to be paid to the respective holders
of the Serial Preferred Shares to be redeemed, in amounts equal to the
redemption price of all Serial Preferred Shares so to be redeemed, together with
accrued and unpaid dividends thereon to the redemption date, upon surrender of
the share certificate or certificates held by such holders, and upon the giving
of such notice and the making of such deposit such holders shall cease to be
shareholders with respect to such shares, and after such notice shall have been
given and such deposit shall have been made such holders shall have no claim
against the Corporation or privileges with respect to such shares except only to
receive such money from such bank or trust company without interest or the right
to exercise, before the redemption date, any unexpired rights of conversion. In
case less than all of the outstanding Serial Preferred Shares of any series are
to be redeemed, the Corporation shall select by lot the shares so to be redeemed
in such manner as shall be prescribed by its Board of Directors. If the holders
of Serial Preferred Shares that shall have been called for redemption shall not,
within six years after such deposit, claim the amount deposited for the
redemption of their shares, any such bank or trust company shall, upon demand,
pay over to the Corporation such unclaimed amounts and thereupon such bank or
trust company and the Corporation shall be relieved of all responsibility in
respect thereof and to such holders.
(c) Any Serial Preferred Shares that are redeemed by the
Corporation pursuant to the provisions of this Section 4 of this Division A and
any Serial Preferred Shares that are purchased and delivered in satisfaction of
any sinking fund requirements provided for shares of such series and any Serial
Preferred Shares that are converted in accordance with their express terms shall
be canceled and not
reissued. Any Serial Preferred Shares otherwise acquired by the Corporation
shall be restored to the status of authorized and unissued Serial Preferred
Shares without serial designation.
5. (a) The holders of Serial Preferred Shares of any series
shall, in case of liquidation, dissolution or winding up of the affairs of the
Corporation, 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 Class A Shares or Class B Shares or any other
shares ranking junior to the Serial Preferred Shares, the amounts fixed with
respect to shares of any such series in accordance with Section 1 of this
Division A, plus in any such event 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 Serial Preferred Shares
of all series of the full preferential amount to which the holders thereof are
respectively entitled, then such net assets shall be distributed ratably upon
outstanding Serial Preferred Shares of all series in proportion to the full
preferential amount to which the holder of each such share is entitled. After
payment to holders of Serial Preferred Shares of the full preferential amounts
as aforesaid, holders of Serial Preferred Shares 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 it,
or the sale, lease or conveyance of all or substantially all of the property or
business of the Corporation shall not be deemed to be a dissolution, liquidation
or winding up of the Corporation for the purposes of this Section 5 of this
Division A.
6. (a) The holders of Serial Preferred Shares of all series
shall be entitled to one vote for each such share upon all matters presented to
shareholders; and, except as otherwise provided herein or required by law, the
holders of Serial Preferred Shares of all series and the holders of Class A
Shares shall vote together as one class on all matters. If, and as often as, the
Corporation shall be in default in the payment of the equivalent of six
quarterly dividends (whether or not consecutive) on any series of Serial
Preferred Shares at any time outstanding, whether or not earned or declared, the
holders of Serial Preferred Shares of all series voting separately as a class
and in addition to all other rights to vote for Directors shall thereafter be
entitled to elect, as herein provided, two members of the Board of Directors of
the Corporation; provided, however, that the special class voting rights
provided for herein, when the same shall have become vested, shall remain so
vested until all accrued and unpaid dividends on the Serial Preferred Shares of
all series then outstanding shall have been paid, whereupon the holders of
Serial Preferred Shares shall be divested of their special class voting rights
in respect of subsequent elections of Directors, subject to the revesting of
such special class voting rights in the event hereinabove specified in this
Section 6(a). In the event of default entitling the holders of Serial Preferred
Shares to elect two Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called by, the
holders of record of at least 10% of the Serial Preferred Shares of all series
at the time outstanding, and notice thereof shall be given in the same manner as
that required for the annual meeting of shareholders; provided, however, that
the Corporation shall not be required to call such special meeting if the annual
meeting of shareholders shall be held within 90 days after the date of receipt
of the foregoing written request from the holders of Serial Preferred Shares. At
any meeting at which the holders of Serial Preferred Shares shall be entitled to
elect Directors, the holders of not less than one-third of the outstanding
Serial Preferred Shares of all series, present in person or by proxy, shall be
sufficient to constitute a quorum and the vote of the holders of a majority of
such shares so present at any such meeting at which there shall be a quorum
shall be sufficient to elect the members of the Board of Directors that the
holders of Serial Preferred Shares are entitled to elect as herein-before
provided. The
two Directors who may be elected by the holders of Serial Preferred Shares
pursuant to the foregoing provisions shall be in addition to any other Directors
then in office or proposed to be elected otherwise than pursuant to such
provisions, and nothing in such provisions shall prevent any change otherwise
permitted in the total number of Directors of the Corporation or required the
resignation of any Directors elected otherwise than pursuant to such provisions.
(b) The affirmative vote or consent of the holders of at
least two-thirds of the then outstanding Serial Preferred Shares of all series,
given in person or by proxy, either in writing or at a meeting called for the
purpose at which the holders of Serial Preferred Shares of all series shall vote
separately as a class, shall be necessary to effect any one or more of the
following (but, insofar as the holders of Serial Preferred Shares are concerned,
such action may be effected with such vote or consent):
(i) Any amendment, alteration or repeal of any of the
provisions of the Articles of Incorporation or of the Regulations of
the Corporation that affects adversely the voting powers, rights or
preferences of the holders of Serial Preferred Shares; provided,
however, that for the purpose of this clause (i) only, neither the
amendment of the Articles of Incorporation of the Corporation to
authorize, or to increase the authorized or outstanding number of,
Serial Preferred Shares or of any shares of any class ranking on a
parity with or junior to the Serial Preferred Shares, nor the increase
by the shareholders or Board of Directors pursuant to the Regulations
of the number of Directors of the corporation shall be deemed to affect
adversely the voting powers, rights or preferences of the holders of
Serial Preferred Shares; and provided further that, if such amendment,
alteration or repeal affects adversely the rights or preferences of one
or more but not all then outstanding series of Serial Preferred Shares,
only the affirmative vote or consent of the holders of at least
two-thirds of the number of the then outstanding shares of the series
so affected shall be required;
(ii) The authorization, or the increase in the authorized
number, of shares of any class ranking prior to the Serial Preferred
Shares; or
(iii) The purchase or redemption (whether for sinking fund
purposes or otherwise) of less than all the then outstanding Serial
Preferred Shares except in accordance with a purchase offer made to all
holders of record of Serial Preferred Shares, unless all dividends on
all Serial Preferred Shares then outstanding for all previous quarterly
dividend periods shall have been declared and paid or funds therefore
set apart and all accrued sinking fund obligations applicable to all
Serial Preferred Shares shall have been complied with.
(c) The affirmative vote or consent of the holders of at least
a majority of the then outstanding Serial Preferred Shares of all series, given
in person or by proxy, either in writing or at a meeting called for the purpose
at which the holders of Serial Preferred Shares of all series shall vote
separately as a class, shall be necessary (but insofar as the holders of Serial
Preferred Shares are concerned, such action may be effected with such
affirmative vote or consent) to authorize any shares ranking on a parity with
the Serial Preferred Shares or an increase in the authorized number of Serial
Preferred Shares.
7. For the purposes of this Division A:
(a) Whenever reference is made to shares "ranking
prior to the Serial Preferred Shares", 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 or as to
distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation are given preference over the rights of the
holders of Serial Preferred Shares.
(b) Whenever reference is made to shares "on a parity
with the Serial Preferred Shares", 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 rank on an equality with the rights
of the holders of Serial Preferred Shares.
(c) Whenever reference is made to shares "ranking
junior to the Serial Preferred Shares", such reference shall
mean and include all shares of the Corporation other than
those defined under clauses (a) and (b) of this Section 7 as
shares "ranking prior to" or "on a parity with" the Serial
Preferred Shares.
DIVISION B: Express Terms of Class A Shares and Class B Shares.
1. General. The Class A Shares and Class B Shares shall be
subject to the express terms of the Serial Preferred Shares and any series
thereof. The powers, preferences and rights of the Class A Shares and Class B
Shares and the qualifications, limitations and restrictions thereof, shall in
all respects be identical, except as otherwise required by law or as expressly
provided in these Amended Articles of Incorporation.
2. Voting.
a. Each shareholder of the Corporation shall be
entitled to one vote for each Class A Share standing in such
shareholder's name on the books of the Corporation on all
matters presented to shareholders for their vote, consent,
waiver, release or other action.
b. The holders of Class B Shares shall not be
entitled to vote on any matter submitted to shareholders for
their vote, consent, waiver, release or other action except as
otherwise required by law.
3. Dividends and Distributions. Dividends and distributions
may be declared and paid to the holders of Class A Shares and Class B Shares in
cash, property, or other securities of the Corporation (including shares of any
class whether or not shares of such class are already outstanding) out of funds
legally available therefore. Each Class A Share and each Class B Share shall
have identical rights with respect to dividends and distributions subject to the
following:
a. subject to Section 4 of Division B of Article
Fourth, at the discretion of the Board of Directors, a
dividend or distribution in cash or property on a Class B
Share may be greater (but not less) than any dividend or
distributions in cash or property on a Class A Share;
b. a dividend or distribution in shares of the
Corporation on Class A Shares may be paid or made in Class A
Shares or Class B Shares; and
c. a dividend or distribution in shares of the
Corporation on Class B Shares may be paid or made only in
Class B Shares.
4. Merger, Consolidation, Combination or Dissolution of the
Corporation. In the event of merger, consolidation or combination of the
Corporation with another entity (whether or not the Corporation is the surviving
entity) or in the event of dissolution of the Corporation, holders of Class B
Shares shall be entitled to receive in respect of each Class B Share the same
indebtedness, other securities, cash, rights, or any other property, or any
combination of shares, evidences of indebtedness, securities, cash, rights or
any other property, as holders of Class A Shares shall be entitled to receive in
respect to each share, except that any common stock that holders of Class B
Shares shall be entitled to receive in any such event may have terms
substantially similar to those of the Class B Shares as set forth in this
Division B of Article Fourth.
5. Splits or Combinations of Shares. If the Corporation shall
in any manner split, subdivide or combine the outstanding Class A Shares or
Class B Shares, the outstanding shares of the other such class shall be
proportionately split, subdivided or combined in the same manner and on the same
basis as the outstanding shares of the class that has been split, subdivided or
combined.
6. Change in Number of Authorized Class B Shares. The number
of authorized Class B Shares may be increased or decreased (but not below the
number then outstanding) by the affirmative vote of the holders of a majority of
the aggregate number of outstanding Class A Shares entitled to vote in the
election of Directors as a single class.
7. Class B Protection Provisions.
a. If, after the Effective Time, a Person or group, each as
defined in Section 7(j) of Division B of this Article Fourth, acquires
beneficial ownership of shares represented 15% or more of the number of then
outstanding Class A Shares and such Person or group (a "Significant
Shareholder") does not then beneficially own an equal or greater percentage of
all then outstanding shares of the Class B Shares, all of which Class B Shares
must have been acquired by such Significant Shareholder after the Effective
Time, such Significant Shareholder must, within a ninety (90) day period
beginning the day after becoming a Significant Shareholder, make a public cash
tender offer in compliance with all applicable laws and regulations to acquire
additional Class B Shares as provided in this Section 7 of Division B of Article
Fourth (a "Class B Protection Transaction").
b. In each Class B Protection Transaction, the Significant
Shareholder must make a public tender offer to acquire that number of additional
Class B Shares determined by (i) multiplying the percentage of the number of
outstanding Class A Shares beneficially owned and acquired after the Effective
Time by such a Significant Shareholder by the total number of Class B Shares
outstanding on the date such Person or group became a Significant Shareholder,
and (ii) subtracting therefrom the number of Class B Shares beneficially owned
by such Significant Shareholder on the date such Person or group became a
Significant Shareholder which were acquired after the Effective Time (as
adjusted for stock splits, stock dividends and similar recapitalizations). The
Significant Shareholder must acquire all shares validly tendered; or if the
number of Class B Shares tendered to the Significant Shareholder exceeds the
number of shares required to be acquired pursuant to this Section 7(b), the
number of Class B Shares acquired from each tendering holder shall be pro rata
based on the percentage that the number of shares tendered by such shareholder
bears to the total number of shares tendered by all tendering holders.
c. The offer price for any Class B Shares required to be
purchased by the Significant Shareholder pursuant to Section 7 of Division B of
this Article Fourth shall be the greatest of (i) the highest price per share
paid by the Significant Shareholder for any Class A Shares or Class B Shares
during the six month period ending on the date such Person or group became a
Significant Shareholder (or such shorter period if the date such Person or group
became a Significant Shareholder is not more than six months following the
Effective Time), (ii) the highest reported sale price of Class A Shares or Class
B Shares on the New York Stock Exchange (or such other securities exchange or
quotation system as is then the principal trading market for such shares) during
the 30 day period preceding such Person or group becoming a Significant
Shareholder, and (iii) the highest reported sale price of Class A Shares or
Class B Shares on the New York Stock Exchange (or such other securities exchange
or quotation system as is then the principle trading market for such shares) on
the business day preceding the date the Significant Shareholder makes the tender
offer required by this Section 7 of Division B of this Article Fourth. For
purposes of Section 7(d) of Division B of this Article Fourth, the applicable
date for each calculation required by clauses (i) and (ii) of the preceding
sentence shall be the date on which the Significant Shareholder becomes required
to engage in the Class B Protection Transaction for which such calculation is
required. In the event that the Significant Shareholder has acquired Class A
Shares or Class B Shares in the six month period ending on the date such Person
or group becomes a Significant Shareholder for consideration other than cash,
the value of such consideration per share of Class A Shares shall be as
determined in good faith by the Board of Directors.
d. A Class B Protection Transaction shall also be required to
be effected by any Significant Shareholder each time that the Significant
Shareholder acquires after the Effective Time beneficial ownership of additional
Class A Shares in an amount equal to or greater than the next higher integral
multiple of 5% in excess of 15% (e.g., 20%, 25%, 30%, etc.) of the number of
outstanding Class A Shares if such Significant Shareholder does not then own an
equal or greater percentage of the Class B Shares (all of which Class B Shares
must have been acquired by such Significant Shareholder after the Effective
Time). Such Significant Shareholder shall be required to make a public cash
tender offer to acquire that number of Class B Shares prescribed by the formula
set forth in Section 7(b) of Division B of this Article Fourth, and must acquire
all shares validly tendered or a pro rata portion hereof, as specified in such
Section 7(b), at the price determined pursuant to Section 7(c) of Division B of
this Article Fourth, even if a previous Class B Protection Transaction resulted
in fewer Class B Shares being tendered than required in the previous offer.
e. If any Significant Shareholder fails to make an offer
required by this Section 7 of Division B of this Article Fourth, or to purchase
shares validly tendered and not withdrawn (after proration, if any), such
Significant Shareholder shall not be entitled to vote any Class A Shares
beneficially owned by such Significant Shareholder and acquired by such
Significant Shareholder after the Effective Time unless and until such
requirements are complied with or unless and until all Class A Shares causing
such offer requirement to be effective are no longer beneficially owned by such
Significant Shareholder. To the extent that the voting power of any Class A
Shares is so suspended, such shares shall not be included in the determination
of aggregate voting shares for any purpose under these Amended Articles of
Incorporation or the Ohio Revised Code. The requirement to engage in a Class B
Protection Transaction is satisfied by the making of the requisite offer and
purchasing validly tendered shares pursuant to this Section 7 of Division B of
this Article Fourth, even if the number of shares tendered is less than the
number of shares included in the required offer.
f. The Class B Protection Transaction requirement shall not
apply to any increase in percentage beneficial ownership of Class A Shares
resulting solely from a change in the aggregate amount of Class A Shares
outstanding, provided that any acquisition after such change which resulted in
any Person or group beneficially owning fifteen percent (15%) or more of the
number of outstanding Class A Shares (or an additional 5% or more of the number
of shares of the Class A Shares after the last acquisition which triggered the
requirement for a Class B Protection Transaction) shall be subject to any Class
B Protection Transaction requirement that would be imposed pursuant to this
Section 7 of Division B of this Article Fourth.
g. In connection with Sections 7(a) through 7(d) of Division B
of this Article Fourth, the following Class A Shares shall be excluded for the
purpose of determining the Class A Shares beneficially owned by such Person or
group but not for the purposes of determining shares outstanding:
(i) shares beneficially owned by such Person or group
at the Effective Time;
(ii) shares acquired by will or by the laws of
descent and distribution, or by gift that is made in good
faith and not for the purpose of circumventing this Section 7
of Division B of Article Fourth or by foreclosure of a bona
fide loan;
(iii) shares acquired upon issuance or sale by the
Corporation;
(iv) shares acquired by operation of law (including a
merger or consolidation effected for the purpose of
recapitalizing such Person or reincorporating such Person in
another jurisdiction but excluding a merger or consolidation
effected for the purpose of acquiring another Person);
(v) shares acquired in exchange for Class B Shares by
a holder of Class B Shares (or by a parent, lineal descendant
or donee of such holder of Class B Shares who received such
Class B Shares from such holder) if the Class B Shares so
exchanged were acquired by such holder directly from the
Corporation as a result of a stock split effected by these
Amended Articles of Incorporation at the Effective Time or any
subsequent stock split or as a dividend on Class A Shares; and
(vi) shares acquired by a plan of the Corporation
qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended, or any successor provision thereto, or
acquired by reasons of a distribution from such a plan.
h. In connection with Sections 7(a) through 7(b) of this
Division B of Article Fourth, for purposes of calculating the
number of shares of Class B Shares beneficially owned by any
Persons or group:
(i) Class B Shares acquired by gift shall be deemed
to be beneficially owned by such Person or member of a group
if such gift was made in good faith or not for the purpose of
circumventing the operations of this Section 7 of Division B
of this Article Fourth; and
(ii) only Class B Shares owned of record by such
Person or member of a group or held by others as nominees of
such Person or member of a group and identified as such to the
Corporation shall be deemed to be beneficially owned by such
Person or group (provided that Class B Shares with respect to
which such Person or member of a group has sole investment and
voting power shall be deemed to be beneficially owned
thereby).
i. All calculations with respect to percentage beneficial
ownership of either issued and outstanding Class A Shares or Class B Shares will
be based upon the numbers of issued and outstanding shares reflected in either
the records of or a certification from the Corporation's stock transfer agent or
reported by the Corporation on the last to be filed of (i) the Corporation's
most recent Annual Report on Form 10-K, (ii) its most recent Quarterly Report on
Form 10-Q, (iii) its most recent Current Report on Form 8-K, and (iv) its most
recent definitive proxy statement filed with the Securities and Exchange
Commission.
j. For purposes of this Section 7 of Division B of this
Article Fourth, the term "Person" means any individual, partnership,
corporation, association, trust, or other entity (other than the Corporation).
Subject to Sections 7(g) and 7(h) of Division B of this Article Fourth,
"beneficial ownership" shall be determined pursuant to Rule 13d-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), or any
successor regulation and the formation or existence of a "group" shall be
determined pursuant to Rule 13d-5(b) under the 1934 Act or any successor
regulation, subject to the following qualifications:
(i) relationships by blood or marriage between or
among any Persons will not constitute any of such Persons as a
member of a group with such other Person, absent affirmative
attributes of concerted action; and
(ii) any Person acting in his official capacity as a
director or officer of the Corporation shall not be deemed to
beneficially own shares where such ownership exists solely by
virtue of such Person's status as a trustee (or similar
position) with respect to shares held by plans or trusts for
the general benefit of employees or former employees of the
Corporation, and actions taken or agreed to be taken by a
Person in such Person's official capacity as an officer or
director of the Corporation will not cause such Person to
become a member of a group with any other Person.
8. Change of Class B Shares. Each Class B Share (whether or
not then issued) shall be changed automatically into one Class A Share upon the
earlier to occur of (i) at the time the number of outstanding Class A Shares is
less than 10% of the aggregate number of outstanding Class A Shares and Class B
Shares; or (ii) upon resolution of the Board of Directors, if as a result of the
existence of the Class B Shares, either the Class A Shares or Class B Shares or
both are excluded from trading on the New York Stock Exchange, the American
Stock Exchange and all other principal national securities exchanges then in use
and are also excluded from quotation on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") - National Market System and other
comparable quotation systems then in use. Upon such change, the total number of
Class A Shares the Corporation shall have authority to issue, shall be
150,000,000 and the total number of Class B Shares shall be zero (0) and all
references to Class B Shares shall be of no further force or effect. In making
the determination in subparagraphs (i) or (ii), the Board of Directors may
conclusively rely on information and documentation available to it, including
but not limited to, information or certification from its stock transfer agent,
filings made with the Securities and Exchange Commission, any stock exchange,
the National Association of Securities Dealers, Inc., or any other national
quotation system. At the time set forth in (i) or (ii) above, the Class B Shares
shall be deemed changed automatically into shares of Class A Shares and stock
certificates formerly representing Class B Shares shall thereupon and thereafter
be deemed to represent a like number of Class A Shares. The determination of the
Board of Directors that either (i) or (ii) has occurred shall be conclusive and
binding and the change of each Class B Share into one Class A Share shall remain
effective regardless of whether (i) or (ii) has occurred in fact.
FIFTH: A Director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise, nor shall any transaction
contract or other act of the Corporation be void or voidable or in any way
affected or invalidate by reason of the fact that any Director or officer, or
any firm in which such Director or officer is a member, or any corporation of
which such Director or officer is a shareholder, Director or officer, is in any
way interested in such transaction, contract or other act, provided the fact
that such officer, Director, firm or corporation is so interested shall be
disclosed or shall be known to the Board of Directors of such members thereof as
shall be present at any meeting of the Board of Directors at which action upon
any such transaction, contract or other act shall be taken; nor shall any such
Director or officer be accountable or responsible to the Corporation for or in
respect of any such transaction, contract or other act of the Corporation or for
any gains or profits realized by him by reason of the fact that he or any firm
of which he is a member of any corporation of which he is a shareholder,
Director or officer is interested in such transaction, contract or other act;
any such Director may be counted in determining the existence of a quorum at any
meeting of the Board of Directors of the Corporation which shall authorize or
take action in respect of any such transaction, contract or other act, and may
vote there at to authorize, ratify or approve any such transaction, contract or
other act with like force and effect as if he or any firm of which he is a
member or any corporation of which he is a shareholder, Director or officer were
not interested in such transaction, contract or other act.
SIXTH: No holder or any class of shares of the Corporation
shall have any pre-emptive or preferential rights to subscribe to or purchase
any shares of any class of stock of the Corporation, whether now or hereafter
authorized and whether unissued or in the treasury, or any obligations
convertible into shares of any class of stock of the Corporation, at any time
issued or sold, or any rights to subscribe to or purchase any thereof.
SEVENTH: The Board of Directors is hereby authorized to fix
and determine and to vary the amount of working capital of the Corporation, to
determine whether any, and, if any, what part of its surplus, however created or
arising, shall be used or disposed of or declared in dividends, or paid to
shareholders, and, without action by the shareholders, to use and apply such
surplus, or any part thereof, at any time, or from time to time, in the purchase
or acquisition of shares of any one class or combination of classes of shares,
voting trust certificates for shares, bonds, debentures, notes, scrip, warrants,
obligations, evidences of indebtedness of the Corporation or any other
securities of the Corporation, to such extent or amount and in such manner and
upon such price and other terms as the Board of Directors shall deem expedient
without regard to the differences among the classes of shares or other
securities in price and other terms under which shares may be purchased or in
the relative number of shares that may be available for purchase. The Board of
Directors hereby is authorized to fix at any time and from time to time the
amount of consideration for which the Corporation may issue its shares or any
other securities, whether or not greater consideration could be received upon
the issue or sale of the same number of shares of another class.
EIGHTH: 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 the filing of these Articles
of Incorporation in the office of the Secretary of State.
NINTH: Notwithstanding any provisions of the Ohio Revised Code
now or hereafter in force otherwise 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, unless otherwise expressly
required by statute or by the Articles of Incorporation, 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.
TENTH: FAIR PRICE OR 80% VOTE PROVISION
1. Voting Requirement. Unless both the fair price requirement
set forth in Section 2 and the other conditions set forth in Section 3 have been
satisfied, the affirmative vote of the holders of 80% of all outstanding shares
of the Corporation entitled to vote in elections of Directors, voting together
as a single class, shall be required for the authorization or approval of any of
the following transactions:
(a) Merger or Consolidation. The merger or consolidation of
the Corporation or any of its subsidiaries with or into an Interested
Party (as hereinafter defined).
(b) Disposition of Assets. The sale, lease, pledge, or other
disposition, in one transaction or in a series of transactions from the
Corporation or any of its subsidiaries to an Interested Party, or from
an Interested Party to the Corporation or any of its subsidiaries, of
assets having an aggregate fair market value (as hereinafter defined)
of $1,000,000 or more.
(c) Issuance or Transfer of Securities. The issuance, sale, or
other transfer, in one transaction or in a series of transactions, by
the Corporation or any of its subsidiaries to an Interested Party, or
by an Interested Party to the Corporation or any of its subsidiaries,
of securities for cash or other consideration having an aggregate fair
market value of $1,000,000 or more.
(d) Liquidation of Dissolution. The liquidation of dissolution
of the Corporation proposed by an Interested Party.
(e) Reclassification or Recapitalization. The reclassification
of securities, recapitalization of the Corporation or other transaction
that has the effect of increasing the proportionate share of any class
of outstanding securities of the Corporation or any of its subsidiaries
beneficially owned (as hereinafter defined) by an Interested Party or
of otherwise diluting the position of any shareholder of the
Corporation in comparison with the position of an Interested Party.
(f) Other Transactions. Any other transactions or series of
transactions that is similar in purpose or effect to those referred to
in clauses (a) through (e) of this Section 1.
This voting requirement shall apply even though no vote, or a lesser percentage
vote, may be required by law, by any other provision of these Articles of
Incorporation or otherwise. The term "business combination", as used in this
Article, means any of the transactions referred to in clauses (a) though (f) of
this Section 1.
2. Fair Price Requirement. The fair price requirement will be
satisfied if the consideration to be received in the business combination by the
holders of shares of the Corporation's Common Stock and Serial Preferred Stock,
and by the Corporation or any of its subsidiaries, as the case may be, meets the
following tests:
(a) Amount of Consideration to be Received by Shareholders. If
any holder of the shares of the Corporation's Common Stock or Serial Preferred
Stock, other than an Interested Party, is to receive consideration in the
business combination for any of the shares, the aggregate amount of cash and
fair market value of any other consideration to be received per share may not be
less than the sum of --
(1) the greatest of (i) the highest per share price,
including commissions, paid by the Interested Party for any shares of
the same class or series during the two-year period ending on the date
of the most recent purchase by the Interested Party of any such shares,
(ii) the highest sales price reported for shares of the same class or
series traded on a national securities exchange or in the
over-the-counter market during the one-year period preceding the first
public announcement of the proposed business transaction or (iii) in
the case of Serial Preferred Stock, the amount of the per share
liquidation preference; plus
(2) interest on the per share price calculated at the
rate of ten percent (10%) per annum, compounded annually from the date
the Interested Party first became an Interested Party until the
business combination is consummated, less the per share amount of cash
dividends payable to holders of record on record dates in the interim,
up to the amount of such interest.
For purposes of this clause (a) per share amounts will be adjusted for any stock
dividend, stock split or similar transaction.
(b) Form of Consideration to be Received by Shareholders. The
consideration to be received by holders of shares of the Corporation's Common
Stock or Serial Preferred Stock must be in cash or in the same form as was
previously paid by the Interested Party for shares of the same class or series;
if the Interested Party previously paid for such shares with different forms of
consideration, the consideration to be received by the holders of the shares
must be in cash or in the same form as was previously paid by the Interested
Party for the largest number of shares previously acquired by it. The provisions
of this clause (b) are not intended to diminish the aggregate amount of cash and
fair market value of any other consideration that any holder of shares of the
Corporation's Common Stock or Serial Preferred Stock is otherwise entitled to
receive upon the liquidation or dissolution of the Corporation, under the terms
of any contract with the Corporation or an Interest Party, or otherwise.
(c) Consideration to be Received by the Corporation or any of
its Subsidiaries. If the Corporation or any of its subsidiaries is to receive
consideration in the business combination, the consideration to be received must
be fair to the Corporation or its subsidiaries, as determined by the continuing
directors (as hereinafter defined).
3. Other Conditions. The other conditions will be satisfied
if, from the time the Interested Party became an Interested Party until the
completion of the business combination, each of the following has at all times
been and continues to be true:
(a) Continuing Directors. The Corporation's Board of Directors
has included at least five continuing directors. The term "continuing
director," used in this Article, means an individual who (i) either was
a director of the Corporation at the time the Interested Party became
an Interested Party or was subsequently nominated or elected by the
other continuing directors and (ii) is not an affiliate or associate
(as hereinafter defined) of the Interested Party. All actions required
or permitted to be taken by the continuing directors under this Article
shall be taken by the unanimous written consent of all continuing
directors or by the vote of a majority of the
continuing directors at a meeting convened upon such notice as would be
required for a meeting of the full Board of Directors.
(b) No Acquisition of Additional Shares. The Interested Party
has not become the beneficial owner (as hereinafter defined) of any
additional shares of Common Stock or Serial Preferred Stock of the
Corporation, except (i) as part of the transaction that resulted in the
Interested Party becoming an Interested Party, (ii) upon conversion of
securities previously acquired by it or (iii) pursuant to a stock
dividend or stock split.
(c) No Special Benefits to the Interested Shareholder. The
Interested Party has not received, directly or indirectly, the benefit
(except proportionately as a shareholder) of any loan, advance,
guaranty, pledge, or other financial assistance, tax credit or
deduction or other benefit from the Corporation or any of its
subsidiaries.
(d) Proxy Statement. A proxy or information statement
describing the business combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations under
it (or any subsequent provisions replacing that Act and the rules and
regulations under it) has been mailed at least 30 days prior to the completion
of the business combination to the holders of all outstanding shares of the
Corporation entitled to vote in election of Directors, whether or not
shareholder approval of the business combination is required. If deemed
advisable by the continuing directors, the proxy or information statement shall
contain a recommendation by the continuing directors as to the advisability (or
inadvisability) of the business combination and/or an opinion by an investment
banking firm, selected by the continuing directors and retained at the expense
of the Corporation, as to the fairness (or unfairness) of the business
combination to holders of shares of the Corporation's Common Stock or Serial
Preferred Stock other than the Interested Party.
(e) No Omission or Reduction of Dividends. Except to the
extent approved by the continuing directors, there has been no (i)
failure to pay in full, when and as due, any dividends on the
Corporation's Serial Preferred Stock or (ii) failure to pay or
reduction in the annual rate of dividends on the shares of the
Corporation's Common Stock, whether directly or indirectly through a
reclassification, recapitalization or otherwise.
(f) No Change in Business or Capital Structure. Except to the
extent approved by the continuing directors, there has been no material
change in (i) the nature of the business conducted by the Corporation
and its subsidiaries or (ii) the capital structure of the Corporation,
including but not limited to any change in the number of outstanding
shares of Common Stock, the number and series of any outstanding shares
of Serial Preferred Stock and the types and aggregate principal amount
of any outstanding debt securities, except for changes resulting from
the exercise of previously issued options, warrants or other rights,
the conversion of previously issued shares, the issuance of previously
authorized debt securities and the mandatory redemption of retirement
of debt securities in accordance with their terms.
4. Definitions: As used in this Article TENTH:
(a) "Affiliate"; "Associate". The terms "affiliate" and
"associate" have the meanings ascribed to them in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on May 4, 1984.
(b) "Beneficial Ownership". A person or entity is deemed to
"beneficially own" shares if, directly or indirectly through any
contract, understanding, arrangement, relationship or otherwise, that
person or entity has or shares (i) the power to vote or to dispose, or
to direct the voting or disposition, of the shares or (ii) the right to
acquire the shares pursuant to any contract or arrangement, upon the
exercise of any option, warrant or right, upon the conversion of any
other shares, upon revocation of a trust or otherwise. The person or
entity is also deemed to "beneficially own" shares that are
beneficially owned by affiliates and associates of that person or
entity.
(c) "Business Combination". The term "business combination"
has the meaning ascribed to it in Section 1 of this Article.
(d) "Continuing Directors". The term "continuing directors"
has the meaning ascribed to it in clause (a) of Section 3 of this
Article.
(e) "Fair Market Value". The term "fair market value" means
(i), in the case of securities listed on a national securities exchange
or on the National Association of Securities Dealers, Inc.'s National
Market, the highest closing sales price reported during the 30-day
period immediately preceding the date in question for securities of the
same class or series traded on such exchange or market, or, if such
securities are not listed on any exchange or such National Market, the
highest closing bid quotation with respect to such securities during
the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automatic Quotation System or
any system then in use, or, if no quotations are available, the value
determined by the continuing directors, and (ii) in the case of other
securities and of consideration other than securities or cash, the
value determined by the continuing directors.
(f) "Interested Party". The term "Interested Party" means any
person or entity that, together with its affiliates and associates, is
at the time of, or has been within the two-year period immediately
prior to, the consummation of a business combination the beneficial
owner of shares having at least 20% of the aggregate voting power of
all outstanding shares of the Corporation entitled to vote in elections
of Directors. The term "Interested Party," for purposes of the
requirements and conditions of this Article, also includes the
affiliates and associates of the Interested Party. Notwithstanding the
foregoing, the Corporation and its subsidiaries, and any
profit-sharing, employee stock ownership, employee pension, or other
employee benefit plan of the Corporation or any subsidiary, are not
deemed to be "Interested Parties".
5. No Effect on Fiduciary Obligations of Interested Party.
Nothing contained in this Article shall be construed to relieve any Interested
Party from any fiduciary obligations imposed by law.
6. Amendment, Repeal, etc. Notwithstanding any other provision
of these Amended Articles of Incorporation or the Regulations of the Corporation
(and notwithstanding the fact that a lesser percentage may be required by law,
these Amended Articles of Incorporation or the Regulations of the Corporation),
the affirmative vote of the holders of 80% of the outstanding shares of the
Corporation entitled to vote in elections of Directors, voting together as a
single class, shall be required to amend or repeal, or adopt any provisions
inconsistent with, this Article Tenth.
ELEVENTH: These Amended Articles supersede the existing
Articles of Incorporation of the Corporation and any and all subsequent
amendments thereto.