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EXHIBIT 1
THE LINCOLN ELECTRIC COMPANY
RESTATED ARTICLES OF INCORPORATION
ARTICLE FIRST: The name of the Corporation shall be THE
LINCOLN ELECTRIC COMPANY.
ARTICLE SECOND: The place in the State of Ohio where its
principal office is located is the City of Cleveland, Cuyahoga County.
ARTICLE THIRD: The Corporation is formed for the purpose of
manufacturing, repairing, buying, selling and dealing in all varieties and
kinds of electrical machinery, tools and appliances, and doing all things
necessary and incident thereto.
ARTICLE FOURTH: Section 1. The maximum number of shares
which the Corporation is authorized to have outstanding is sixty-two million
(62,000,000), consisting of thirty million (30,000,000) Common Shares, without
par value ("Common Shares"), thirty million (30,000,000) Class A Common Shares,
without par value ("Class A Common Shares") and two million (2,000,000) Class B
Common Shares, without par value ("Class B Common Shares"). The shares of each
class shall have the express terms set forth in this Article Fourth.
Upon the Certificate of Restated Articles of Incorporation
setting forth these amendments becoming effective pursuant to the Ohio General
Corporation Law (the "Effective Time"), and without any further action on the
part of the Corporation or its shareholders, (i) each whole share of Common
Stock, without par value ("Old Common Stock") then issued shall automatically
be changed and converted into one fully paid and nonassessable Common Share,
(ii) each whole share of Class A Common Stock, without par value ("Old Class A
Common Stock") then issued shall automatically be changed and converted into
one fully paid and nonassessable Class B Common Share, (iii) certificates
representing Old Common Stock outstanding prior to the Effective Time shall be
deemed to represent the same number of Common Shares, and (iv) certificates
representing Old Class A Common Stock outstanding prior to the Effective Time
shall be deemed to represent the same number of Class B Common Shares.
The powers, preferences and rights of the Common Shares, Class A
Common Shares and Class B Common Shares (collectively, from and after the
Effective Time, the "Common Equity") 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 Restated Articles
of Incorporation.
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Section 2. Voting.
Section 2.1. Each shareholder of the Corporation shall be
entitled to one vote for each Common Share and each Class B Common Share
standing in such shareholder's name on the books of the Corporation. Except as
otherwise required by statute, the holders of Common Shares and Class B Common
Shares shall vote together as one class on all matters.
Section 2.2. The holders of Class A Common Shares shall not
be entitled to vote on any matter submitted to shareholders for their vote,
consent, waiver, release or other action except as required by statute.
Section 3. Dividends. Dividends may be declared and paid to
the holders of Common Shares, Class A Common Shares and Class B Common 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 therefor. No dividend shall be paid on the outstanding
Common Shares, Class A Common Shares or Class B Common Shares unless an equal
dividend per share is paid on each of the outstanding Common Shares, Class A
Common Shares and Class B Common Shares subject to the following:
(a) no cash dividend shall be declared or paid on
one class of Common Equity unless a cash
dividend of the same amount per share is
simultaneously declared and paid on the other
classes of Common Equity;
(b) dividends payable on the Common Equity in
capital stock shall be made to all holders of
Common Equity provided that: (i) such a
dividend on Class A Common Shares shall be
paid or made only in Class A Common Shares;
(ii) such a dividend on Class B Common Shares
shall be paid or made only in the same class
of Common Equity as paid on the Common
Shares; and (iii) a dividend on Class A
Common Shares paid or made in Class A Common
Shares and a dividend on Common Shares and
Class B Common Shares paid or made in either
Common Shares, Class A Common Shares or Class
B Common Shares (consistent with (ii) above)
shall be deemed an equal dividend per share
within the meaning of this Section 3 if paid
in the same proportion regardless of the fair
market value of such shares received in
payment of such dividend.
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Section 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 A Common Shares shall be entitled to receive in respect of each Class A
Common 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 Common Shares and
Class B Common Shares shall be entitled to receive in respect to each share.
Section 5. Splits or Combinations of Shares. If the
Corporation shall in any manner split, subdivide or combine the outstanding
Common Shares, Class A Common Shares or Class B Common Shares, the outstanding
shares of the other such classes shall be proportionately split, subdivided or
combined in the same manner and on the same basis as the outstanding shares of
the other classes that have been split, subdivided or combined.
Section 6. Change in Number of Authorized Class A Common
Shares. The number of authorized Class A Common 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 Common
Shares and Class B Common Shares entitled to vote in the election of directors
voting as a single class.
Section 7. No Preemptive Rights. No shareholder of the
Corporation shall have any preemptive right as such shareholder to subscribe
for or purchase shares of the Corporation.
Section 8. Restrictions on Transfer of Class B Common Shares.
Section 8.1. No sale, assignment, transfer, pledge,
encumbrance or any other disposition of any Class B Common Shares may be made,
except upon compliance with the provisions of Sections 8.1 through 8.4 of this
Article Fourth (or the exception set forth in Section 8.2(b) below). Any
purported or attempted disposition of the Class B Common Shares other than as
permitted by this Article Fourth shall be void, and the last shareholder of
record who acquired such shares in a manner not contrary to this Article Fourth
shall be recognized as the holder of such shares for all purposes.
Section 8.2. The Corporation shall have the sole, exclusive
and unrestricted right, option and privilege to purchase, upon the occurrence
of any of the events set forth below, any or all of the Class B Common Shares
in a manner and at
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a price per share current at the time of the purchase of said shares as
determined pursuant to the terms and provisions of Section 8.3 and 8.4 of this
Article Fourth. The events are:
(a) the death of a holder of Class B Common Shares; and
(b) the determination of a holder of Class B Common
Shares to sell, assign, transfer, pledge, give,
encumber or in any other way dispose of all or any of
said shares, except for any such disposition in the
form of a distribution from The Lincoln Electric
Company Employee Stock Ownership Plan ("Plan")
pursuant to the terms and conditions of the Plan.
Section 8.3. Upon the occurrence of either of the events
specified in Section 8.2 above, the holder of Class B Common Shares, or the
personal representative of said holder's estate, as the case may be, shall
notify the Corporation in writing of the occurrence of any such event. If the
Corporation shall elect to exercise any such right, option or privilege, it
shall, not later than ninety (90) days after it shall have received written
notice from the holder of Class B Common Shares or the personal representative
of said holder's estate, as the case may be, of the occurrence of any such
event, send written notice thereof to said holder or the personal
representative of said holder's estate, as the case may be, of such shares at
his or her last address as shown on the stock transfer records of the
Corporation, or, in the event of the death of said holder, to such other
address as may be so specified in the notice. The Corporation shall pay the
purchase price (as determined pursuant to the terms and provisions of Section
8.4 of this Article Fourth) to the holder of such shares, or in the event of
the death of said holder, to the personal representative of said holder's
estate, immediately upon the delivery to the Corporation of the certificate or
certificates representing the Class B Common Shares, duly endorsed for transfer
and delivery to the Corporation, its successors, assigns or nominees. Upon
delivery of the Corporation's written notice, all rights in and to the Class B
Common Shares shall be vested solely in the Corporation, its successors,
assigns or nominees. If the Corporation does not exercise its right to
purchase any or all of the Class B Common Shares pursuant to the terms and
provisions of this Article Fourth, such shares may be freely disposed of by the
holder thereof or the personal representative of said holder's estate, as the
case may be, not more than ninety (90) days after the expiration of the
Corporation's repurchase period; provided, however, that any such Class B
Common Shares so disposed of shall continue to be subject to the terms and
provisions of this Article Fourth. Any Class B Common Shares not so disposed
of
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shall continue to be subject in all respects to the restrictions and provisions
contained in this Article Fourth.
Section 8.4. The price, rounded to the nearest dollar, at
which any Class B Common Share shall be bought or sold pursuant to the terms
and provisions of this Article Fourth shall be:
(a) the book value of such share in effect on the date of
receipt by the Corporation of the above-described
written notice, plus
(b) the accrued unpaid dividends with respect to such
share which were considered liabilities in
determining book value.
The book value used for this purpose shall be established each April 30 for the
12-month period, May 1 - April 30, following that date and shall be the book
value as of the immediately preceding December 31 as shown in the Corporation's
Audited Consolidated Financial Statements.
Section 8.5. Any Class B Common Shares purchased by the
Corporation pursuant to this Article Fourth shall be retired and restored to
the status of authorized and unissued shares.
Section 8.6. All share certificates representing Class B
Common Shares shall contain a reference to the restrictions and provisions
contained in this Article Fourth.
Section 9. Class A Common Shares Protection Provisions.
Section 9.1. If, after the Effective Time, a Person or group,
as defined in Section 9.11, acquires beneficial ownership of shares
representing 15% or more of the number of then outstanding Common Shares and
such Person or group (a "Significant Shareholder") does not then beneficially
own an equal or greater percentage of all then outstanding Class A Common
Shares, all of which Class A Common Shares must have been acquired by such
Significant Shareholder after the first issuance by the Corporation of Class A
Common Shares (the "Distribution Date"), 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 A Common Shares as provided in
this Section 9 of Article Fourth (a "Class A Protection Transaction").
Section 9.2. In each Class A Protection Transaction, the
Significant Shareholder must make a public tender offer to acquire that number
of additional Class A Common Shares
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determined by (i) multiplying the percentage of the number of outstanding
Common Shares beneficially owned and acquired after the Effective Time by such
Significant Shareholder by the total number of Class A Common Shares
outstanding on the date such Person or group became a Significant Shareholder,
and (ii) subtracting therefrom the excess (if any) of the number of Class A
Common Shares beneficially owned by such Significant Shareholder on the date
such Person or group became a Significant Shareholder (including shares
acquired at or prior to the time such Person or group became a Significant
Shareholder) over the number of Class A Common Shares beneficially owned on the
Distribution Date (as adjusted for stock splits, stock dividends and similar
recapitalization). The Significant Shareholder must acquire all shares validly
tendered; or if the number of Class A Common Shares tendered to the Significant
Shareholder exceeds the number of shares required to be acquired pursuant to
this Section 9.2, the number of Class A Common 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.
Section 9.3. The offer price for any Class A Common Shares
required to be purchased by the Significant Shareholder pursuant to this
Section 9 shall be the greatest of (i) the highest price per share paid by the
Significant Shareholder for any Common Shares or Class A Common Shares during
the six-month period ending on the date such Person or group became a
Significant Shareholder, (ii) the highest reported sale price of a Common Share
or Class A Common Share on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") National Market System (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 a Common Share or Class A Common Share on the NASDAQ National Market System
(or such other securities exchange or quotation system as is then the principal
trading market for such shares) on the business day preceding the date the
Significant Shareholder makes the tender offer required by this Section 9. For
purposes of Section 9.4, 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 subsequent Class A
Protection Transaction for which such calculation is required. In the event
that the Significant Shareholder has acquired Common Shares or Class A Common
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 Common Share or Class A Common Share shall be as determined
in good faith by the Board of Directors.
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Section 9.4. A Class A 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 Common Shares 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 Common Shares if such Significant Shareholder does not then own an
equal or greater percentage of the Class A Common Shares (all of which Class A
Common Shares must have been acquired by such Significant Shareholder after the
Distribution Date). Such Significant Shareholder shall be required to make a
public cash tender offer to acquire that number of Class A Common Shares
prescribed by the formula set forth in Section 9.2, and must acquire all shares
validly tendered or a pro rata portion thereof, as specified in Section 9.2, at
the price determined pursuant to Section 9.3, even if a previous Class A
Protection Transaction resulted in fewer Class A Common Shares being tendered
than required in the previous offer.
Section 9.5. If any Significant Shareholder fails to make an
offer required by this Section 9, or to purchase shares validly tendered and
not withdrawn (after proration, if any), such Significant Shareholder shall not
be entitled to vote any Common Shares beneficially owned by such Significant
Shareholder unless and until such requirements are complied with or unless and
until all Common Shares causing such offer requirement to be effective are no
longer beneficially owned by such Significant Shareholder. The requirement to
engage in a Class A Protection Transaction is satisfied by the making of the
requisite offer and purchasing validly tendered shares pursuant to this Section
9, even if the number of shares tendered is less than the number of shares
included in the required offer.
Section 9.6. The Class A Protection Transaction requirement
shall not apply to any increase in percentage beneficial ownership of Common
Shares resulting solely from a change in the aggregate number of Common Shares
outstanding, provided that any acquisition after such change which results in
any Person or group beneficially owning fifteen percent (15%) or more of the
number of outstanding Common Shares (or an additional 5% or more of the number
of Common Shares after the last acquisition which triggered the requirement for
a Class A Protection Transaction) shall be subject to any Class A Protection
Transaction requirement that would be imposed pursuant to this Section 9.
Section 9.7. In connection with Sections 9.1 through 9.4 of
this Section 9, the following Common Shares shall be excluded for the purpose
of determining the shares beneficially owned by such Person or group but not
for the purpose of determining shares outstanding:
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(a) shares beneficially owned by such Person or group at
the Effective Time;
(b) 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
9 or by foreclosure of a bona fide loan;
(c) shares acquired upon issuance or sale by the
Corporation;
(d) 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);
(e) shares acquired in exchange for Class A Common Shares
by a holder of Class A Common Shares (or by a parent,
lineal descendant or donee of such holder of Class A
Common Shares who received such Class A Common Shares
from such holder) if the Class A Common Shares so
exchanged were acquired by such holder directly from
the Corporation as a dividend on Common Shares; and
(f) 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 reason of a
distribution from such a plan.
Section 9.8. In connection with Sections 9.1 through 9.4 of
this Section 9, for purposes of calculating the number of Class A Common Shares
beneficially owned by any Persons or group:
(a) Class A Common 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
and not for the purpose of circumventing the
operations of this Section 9; and
(b) only Class A Common 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 A Common Shares with respect to
which such Person or member of a group
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has sole investment and voting power shall be
deemed to be beneficially owned thereby).
Section 9.9. To the extent that the voting power of any
Common Share cannot be exercised pursuant to this Section 9, that Common Share
shall not be included in the determination of the voting power of the
Corporation for any purpose under these Restated Articles of
Incorporation or the Ohio Revised Code.
Section 9.10. All calculations with respect to percentage
beneficial ownership of issued and outstanding shares of either Common Shares
or Class A Common Shares will be based upon the numbers of issued and
outstanding shares reflected in either the records of or a certificate 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, (iv) its most recent report on Form 10-C, and (v)
its most recent definitive proxy statement filed with the Securities and
Exchange Commission.
Section 9.11. For purposes of this Section 9, the term
"Person" means any individual, partnership, corporation, association, trust, or
other entity (other than the Corporation). Subject to Sections 9.7 and 9.8,
"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:
(a) 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
(b) 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.
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Section 10. Conversion of Class A Common Shares. Each
outstanding Class A Common Share (whether or not then issued) shall convert
automatically into one Common Share upon the earliest to occur of:
(a) any time the aggregate of the outstanding Common
Shares and Class B Common Shares as reflected on the
stock transfer records of the Corporation is less
than 20% of the aggregate number of outstanding
Common Shares, Class A Common Shares and Class B
Common Shares. For purposes of the immediately
preceding sentence, any Common Shares, Class A Common
Shares or Class B Common Shares repurchased by the
Corporation and held as treasury shares or cancelled
by the Corporation shall not be deemed "outstanding"
from and after the date of repurchase;
(b) the date ("Conversion Date") which shall be ten years
from the Distribution Date of the Class A Common
Shares as defined in Section 9.1; provided, however,
that the Board of Directors by resolution adopted by
two-thirds of the entire number of Directors then in
office no earlier than thirty months and no later
than twenty-four months prior to the initial or any
subsequently established Conversion Date may extend
the Conversion Date for an additional five years.
Any such new Conversion Date and all subsequently
extended Conversion Dates may be extended in like
manner and for a like period; and
(c) upon resolution by the Board of Directors if, as a
result of the existence of the Class A Common Shares,
either the Common Shares or Class A Common Shares is,
or both are, excluded from quotation on the NASDAQ
National Market System, and all other national
quotation systems then in existence and are excluded
from trading on all the principal national securities
exchanges then in existence.
Upon such conversion, the total number of Common Shares the Corporation shall
have authority to issue shall be 60,000,000 shares, and the total number of
Class A Common Shares shall be zero (0) shares and all references to Class A
Common Shares shall be of no further force or effect. In making the
determination referred to in (a) or (c) of this Section 10, the Board of
Directors may conclusively rely on any information or documentation available
to it, including but not limited to filings made with the United States
Securities and Exchange Commission, any stock exchange, the National
Association of Securities Dealers, Inc. or any national quotation system or any
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other government or regulatory agency, or the records of or certification from
the Corporation's stock transfer agent. At such time as set forth in (a), (b)
or (c) of this Section 10, the Class A Common Shares shall be deemed to be
automatically converted into Common Shares and stock certificates formerly
representing Class A Common Shares shall thereupon and thereafter be deemed to
represent a like number of Common Shares. The determination of the Board of
Directors that either (a) or (c) of this Section 10 has occurred shall be
conclusive and binding and the conversion of each Class A Common Share into one
Common Share shall remain effective regardless of whether either (a) or (c) has
occurred in fact.
ARTICLE FIFTH: The Board of Directors of the Corporation is
hereby authorized to fix at any time and from time to time the amount of
consideration for which the Corporation may from time to time issue its shares
without par value, whether now or hereafter authorized and whether or not
greater consideration could be received upon the issue or sale of the same
number of shares of another class.
ARTICLE SIXTH: The Corporation may from time to time pursuant
to authorization by the Board of 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
Board of Directors shall determine without regard to whether less consideration
could be paid upon the purchase of the same number of shares of another class,
subject, however, to such limitation or restriction, if any, as is contained in
the express terms of any class of shares of the Corporation outstanding at the
time of the purchase or acquisition in question.
ARTICLE SEVENTH: The holders of shares of the Corporation
shall not be entitled to cumulative voting rights in elections of Directors.
ARTICLE EIGHTH: Section 1. A higher than majority
shareholder vote for certain Business Combinations (as defined below) shall be
required as follows:
A. In addition to any affirmative vote required by law or
these Articles or the terms of any series of Preferred Stock
or any other securities of the Corporation and except as
otherwise expressly provided in Section 2 of this Article
Eighth:
(1) any merger or consolidation of the
Corporation or any Subsidiary with (i) any Interested
Shareholder or with (ii) any other corporation
(whether or not itself an Interested
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Shareholder) which is, or after such merger or
consolidation would be, an Affiliate or Associate
of an Interested Shareholder;
(2) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or
a series of transactions whether or not related) to
an Interested Shareholder (or an Affiliate or
Associate of an Interested Shareholder) of any assets
of the Corporation or a Subsidiary having an
aggregate Fair Market Value of $1,000,000 or more;
(3) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or
a series of transactions whether or not related) to
or with the Corporation or a Subsidiary of any assets
of an Interested Shareholder (or an Affiliate or
Associate of an Interested Shareholder) having an
aggregate Fair Market Value of $1,000,000 or more;
(4) the issuance or sale by the Corporation or any
Subsidiary (in one transaction or a series of
transactions whether or not related) of any
securities of the Corporation or of any Subsidiary to
an Interested Shareholder or any Affiliate or
Associate of an Interested Shareholder in exchange
for cash, securities or other consideration (or a
combination thereof) having an aggregate Fair Market
Value of $1,000,000 or more except an issuance of
securities upon conversion of convertible securities
of the Corporation or of a Subsidiary which were not
acquired by such Interested Shareholder (or such
Affiliate or Associate) from the Corporation or a
Subsidiary;
(5) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of an Interested Shareholder
or an Affiliate or Associate of an Interested
Shareholder; or
(6) any reclassification of securities (including
any reverse stock split) or recapitalization of the
Corporation or a Subsidiary or any other transaction
(whether or not with or into or otherwise involving
an Interested Shareholder) which has the effect,
directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity securities or securities convertible
into equity
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securities of the Corporation or a Subsidiary which
is directly or indirectly owned by any Interested
Shareholder or an Affiliate or Associate of an
Interested Shareholder;
shall require the affirmative vote of (i) the holders of at
least two-thirds of the combined voting power of the then
outstanding shares of capital stock of the Corporation
entitled to vote generally in an annual election of Directors
or entitled by law or by the terms of the capital stock to
vote on the transaction in question (the "Voting Shares") and
(ii) the holders of at least two-thirds of the combined voting
power of the then outstanding Voting Shares held by
Disinterested Shareholders, in each case voting together as a
single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that
a lesser percentage may be specified, by law, by any other
provisions of these Articles or by the terms of any series of
Preferred Stock or any other securities of the Corporation.
B. The term "Business Combination" as used in this Article
Eighth shall mean any transaction which is referred to in any
one or more of clauses (1) through (6) of paragraph A of
Section 1 of this Article Eighth.
Section 2. The provisions of Section 1 of this Article Eighth
shall not be applicable to any Business Combination, and such Business
Combination shall require only such affirmative vote (if any) as is required by
law, any other provisions of these Articles, the terms of any of the classes or
series of Common Equity of the Corporation or of any of the classes or series
of capital stock of the Corporation entitled to a preference over the Common
Equity as to dividends or upon liquidation, or the terms of any other
securities of the Corporation, if all of the conditions specified in either of
the following paragraphs A or B are met:
A. The Business Combination shall have been approved by
a majority of the Disinterested Directors; or
B. All the following six conditions shall have been met:
(1) The transaction constituting the Business
Combination shall provide for a consideration to be
received by holders of Common Equity in exchange for
their Common Equity, and the aggregate amount of the
cash and the Fair Market Value as of the date of the
consummation of the Business Combination of
consideration other than
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cash to be received per share by holders of Common
Equity in such Business Combination shall be at least
equal to the highest of the following:
(a) (if applicable) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common
Equity beneficially owned by the Interested
Shareholder which were acquired (x) within
the two-year period immediately prior to the
first public announcement of the proposed
Business Combination (the "Announcement
Date") or (y) in the transaction in which it
became an Interested Shareholder, whichever
is higher;
(b) the Fair Market Value per share of
Common Equity on the Announcement Date or on
the date on which the Interested Shareholder
became an Interested Shareholder (the
"Determination Date"), whichever is higher;
and
(c) (if applicable) the price per share
equal to the Fair Market Value per share of
Common Equity determined pursuant to clause
(b) immediately preceding, multiplied by the
ratio of (x) the highest per share price
(including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common
Equity beneficially owned by the Interested
Shareholder which were acquired within the
two-year period immediately prior to the
Announcement Date to (y) the Fair Market
Value per share of Common Equity on the first
day in such two-year period on which the
Interested Shareholder beneficially owned any
shares of Common Equity, whether or not such
Shareholder was an Interested Shareholder on
that day.
(2) If the transaction constituting the Business
Combination shall provide for a consideration to be
received by holders of any class of outstanding
Voting Shares other than Common Equity, the aggregate
amount of the cash and the Fair Market Value as of
the date of the consummation of the Business
Combination of consideration other than cash to be
received per share by holders of such Voting Shares
shall be at least equal to the
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highest of the following (it being intended that the requirements of
this clause B(2) shall be required to be met with respect to every
class of outstanding Voting Shares, whether or not the Interested
Shareholder beneficially owns any shares of a particular class of
Voting Shares):
(a) (if applicable) the highest per share
price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such
class of Voting Shares beneficially owned by
the Interested Shareholder which were
acquired (x) within the two-year period
immediately prior to the Announcement Date or
(y) in the transaction in which it became an
Interested Shareholder, whichever is higher;
(b) (if applicable) the highest preferential
amount per share to which the holders of
shares of such class of Voting Shares are
entitled in the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the Corporation;
(c) the Fair Market Value per share of such
class of Voting Shares on the Announcement
Date or on the Determination Date, whichever
is higher; and
(d) (if applicable) the price per share
equal to the Fair Market Value per share of
such class of Voting Shares determined
pursuant to clause (c) immediately preceding,
multiplied by the ratio of (x) the highest
per share price (including any brokerage
commissions, transfer taxes and soliciting
dealers' fees) paid in order to acquire any
shares of such class of Voting Shares
beneficially owned by the Interested
Shareholder which were acquired within the
two-year period immediately prior to the
Announcement Date to (y) the Fair Market
Value per share of such class of Voting
Shares on the first day in such two-year
period on which the Interested Shareholder
beneficially owned any shares of such class
of Voting Shares, whether or not such
Shareholder was an Interested Shareholder on
that day.
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(3) The consideration to be received by holders of a
particular class of Voting Shares or Common Equity
shall be in cash or in the same form as was
previously paid in order to acquire shares of such
class of shares which are beneficially owned by the
Interested Shareholder and, if the Interested
Shareholder beneficially owns shares of any class of
shares which were acquired with varying forms of
consideration, the form of consideration to be
received by the holders of such class of shares shall
be either cash or the form used to acquire the
largest number of shares of such class of Voting
Shares beneficially owned by it. The prices
determined in accordance with clauses (1) and (2) of
paragraph B of this Section 2 shall be subject to an
appropriate adjustment in the event of any stock
dividend, stock split, subdivision, combination of
shares or similar event.
(4) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation
of such Business Combination:
(a) except as approved by a majority of the
Disinterested Directors, there shall have
been no failure to declare and pay at the
regular date therefor any full quarterly
dividends (whether or not cumulative) on any
outstanding Preferred Stock or other capital
stock entitled to a preference over the
Common Equity as to dividends or upon
liquidation;
(b) except as approved by a majority of the
Disinterested Directors, there shall have
been (x) no reduction in the annual amount of
dividends paid on the Common Equity (except
as necessary to reflect any subdivision of
the Common Equity) and (y) no failure to
increase the annual amount of dividends as
necessary to prevent any such reduction in
the event of any reclassification (including
any reverse stock split), recapitalization,
reorganization or similar transaction which
has the effect of reducing the number of
outstanding shares of the Common Equity;
(c) such Interested Shareholder shall not
have become the beneficial owner of any
additional Voting Shares except as part of
the transaction in which it became an
Interested Shareholder; and
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(d) there shall have always been at least
four (4) Disinterested Directors on
the Board of Directors.
(5) After such Interested Shareholder has become an
Interested Shareholder, such Interested Shareholder
shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder),
of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
(6) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934
and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to shareholders at least
thirty (30) days prior to the consummation of such
Business Combination (whether or not such proxy or
information statement is required to be mailed
pursuant to such Act, rules, regulations or
subsequent provisions).
Section 3. For purposes of this Article Eighth:
A. A "person" shall mean any individual, a partnership,
a corporation, an association, a trust or other entity.
B. "Interested Shareholder" at any particular time shall
mean any person (other than the Corporation or any Subsidiary
or any employee benefit plan or trust of the Corporation or
any Subsidiary) who or which:
(1) is at such time the beneficial owner, directly
or indirectly, of five percent (5%) or more of the
voting power of the Voting Shares;
(2) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to
the date in question was the beneficial owner,
directly or indirectly, of five percent (5%) or more
of the voting power of the Voting Shares; or
(3) is at such time an assignee of or has otherwise
succeeded to the beneficial ownership of any Voting
Shares which were at any time within
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the two-year period immediately prior to the date in
question beneficially owned by an Interested
Shareholder (as defined in (1) and (2) above), if
such assignment or succession shall have occurred in
the course of a transaction or series of transactions
not involving a public offering within the meaning of
the Securities Act of 1933.
C. "Disinterested Shareholder" shall mean a shareholder
of the Corporation who is not an Interested Shareholder (or an
Affiliate or an Associate of an Interested Shareholder) who is
involved, directly or indirectly, in the proposed Business
Combination in question, except that as used in Section 6 of
this Article Eighth, the term "Disinterested Shareholder"
shall mean a shareholder of the Company who is not an
Interested Shareholder.
D. A person shall be a "beneficial owner" of any Voting
Shares:
(1) which such person or any of its Affiliates
or Associates beneficially owns, directly or
indirectly;
(2) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether or
not such right is exercisable immediately) pursuant
to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange
rights, warrants or options or otherwise or (ii) the
right to vote pursuant to any agreement, arrangement
or understanding; or
(3) 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 Voting Shares.
E. For the purpose of determining whether a person is an
Interested Shareholder pursuant to paragraph B of this Section
3, the number of Voting Shares deemed to be outstanding shall
include shares deemed owned by an Interested Shareholder
through application of paragraph D of this Section 3 but shall
not include any other Voting Shares which may be issuable
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights,
warrants or options or otherwise.
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F. "Affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, the person specified.
"Associate", which is used to indicate a relationship with any
person, means (1) any corporation or organization (other than
the Corporation or a majority-owned subsidiary of the
Corporation) of which such person is an officer or partner or
is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of equity securities, (2)
any trust or other estate in which such person has a
substantial beneficial interest or as to which such person
serves as trustee or in a similar fiduciary capacity, and (3)
any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person or who is a
director or officer of the Corporation or any of its parents
or subsidiaries.
G. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly,
by the Corporation; provided, however, that for the purposes
of the definition of Interested Shareholder set forth in
paragraph B of this Section 3, the term "Subsidiary" shall
mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the
Corporation.
H. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with, and not a representative
or nominee of, the Interested Shareholder who is involved,
directly or indirectly, in the proposed Business Combination
in question, and was (a) a member of the Board prior to the
time that such Interested Shareholder became an Interested
Shareholder or (b) recommended to succeed a Disinterested
Director by a majority of the Disinterested Directors then on
the Board.
I. "Fair Market Value" means: (a) in the case of stock, the
highest closing sale price (or closing bid price for any day
on which a closing sale price is not available) during the
30-day period immediately preceding the date in question of a
share of such stock on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or if such
stock is not listed on such Exchange, on the principal United
States securities exchange registered under the Securities
Exchange Act of 1934 on which such stock is listed, or if such
stock is not listed on any
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such exchange, the highest closing bid quotation with respect
to a share of such stock during the 30-day period preceding
the date in question on the NASDAQ or any other system then in
use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as
determined by a majority of the Disinterested Directors in
good faith; and (b) in the case of property other than cash or
stock, the fair market value of such property on the date in
question as determined by a majority of the Disinterested
Directors in good faith. If different classes of Common
Equity of the Corporation have different Fair Market Values
based on the determinations to be made under subsection (a),
then the term "Fair Market Value" of Common Equity shall mean
the highest value then ascribed to a share of any of the
various classes of Common Equity.
J. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than
cash to be received" as used in paragraph B of Section 2 of
this Article Eighth shall include the shares of Common Equity
and the shares of any other class of outstanding Voting Shares
retained by the holders of such shares.
Section 4. A majority of the Disinterested Directors of the
Corporation shall have the power and duty to determine for the purpose of this
Article Eighth, on the basis of information known to them after reasonable
inquiry, (1) whether a person is an Interested Shareholder, (2) the number of
Voting Shares beneficially owned by any person, (3) whether a person is an
Affiliate or Associate of another, (4) whether the requirements of Section 2 of
this Article Eighth have been met with respect to any Business Combination, and
(5) whether the assets which are subject to any Business Combination have, or
the consideration to be received for the issuance or transfer of securities by
this Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $1,000,000 or more. Any such determination made
in good faith shall be binding and conclusive on all parties.
Section 5. Nothing contained in this Article Eighth shall be
construed to relieve any Interested Shareholder from any fiduciary obligation
imposed by law.
Section 6. In addition to any requirements of law and any
other provisions of these Articles or the terms of any class or series of
capital stock of the Corporation entitled to a preference over the Common
Equity as to dividends or upon liquidation, or the terms of any other
securities of the Corporation (and notwithstanding the fact that a lesser
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percentage may be specified by law, these Articles or any such terms), the
affirmative vote of
A. the holders of two-thirds or more of the combined voting
power of the Voting Shares, voting together as a single class,
and
B. two-thirds of the combined voting power of the Voting
Shares held by the Disinterested Shareholders, voting together
as a single class, shall be required to amend, alter or repeal
or adopt any provision inconsistent with, this Article Eighth.
ARTICLE NINTH: The foregoing Restated Articles of
Incorporation hereby supersede existing Amended Articles of Incorporation as
heretofore amended.