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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10 - Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended: August 31, 1998 Commission File No. 0-4016
WORTHINGTON INDUSTRIES, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
OHIO 31-1189815
- ------------------------ -----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1205 Dearborn Drive, Columbus, Ohio 43085
(Address of Principal Executive Offices) ----------
(Zip Code)
(614) 438-3210
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name, Former Address and Former Fiscal Year,
If Changed From Last Report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. YES [ ] NO [ ]
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
Common Shares, without par value 92,469,609
----------------------------------- ----------------------------
Class Outstanding October 13, 1998
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WORTHINGTON INDUSTRIES, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets -
August 31, 1998 and May 31, 1998...............................3
Consolidated Condensed Statements of Earnings -
Three Months Ended August 31, 1998 and 1997....................5
Consolidated Condensed Statements of Cash Flows
Three Months Ended August 31, 1998 and 1997....................6
Notes to Consolidated Condensed Financial Statements...........7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...............9
PART II. OTHER INFORMATION.................................................14
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Per Share)
<TABLE>
<CAPTION>
August 31 May 31
1998 1998
----------- ---------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,196 $ 3,788
Accounts receivable - net 269,016 310,155
Inventories
Raw materials 180,110 172,920
Work in process and finished products 140,491 115,991
---------- ----------
Total Inventories 320,601 288,911
Income taxes receivable - 5,429
Prepaid expenses and other current assets 40,758 34,712
---------- ----------
TOTAL CURRENT ASSETS 641,571 642,995
Investment in Unconsolidated Affiliates 64,496 61,694
Intangible Assets 108,153 95,725
Other Assets 34,746 33,025
Investment in Rouge 46,497 75,745
Property, plant and equipment 1,380,563 1,315,668
Less accumulated depreciation 394,938 382,510
---------- ----------
Property, Plant and Equipment - net 985,625 933,158
---------- ----------
TOTAL ASSETS $1,881,088 $1,842,342
========== ==========
</TABLE>
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WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands, Except Per Share)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
August 31 May 31
1998 1998
----------- ----------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 151,283 $ 176,752
Notes payable 257,868 136,600
Accrued compensation, contributions to
employee benefit plans and related taxes 43,315 43,867
Dividends payable 12,946 13,532
Other accrued items 46,261 37,800
Income taxes 5,234 -
Current maturities of long-term debt 4,892 1,480
---------- ----------
TOTAL CURRENT LIABILITIES 521,799 410,031
Other Liabilities 30,129 24,788
Long-Term Debt:
Conventional long-term debt 368,726 363,870
Debt exchangeable for common shares 46,497 75,745
---------- ----------
Total Long-Term Debt 415,223 439,615
Deferred Income Taxes 145,176 145,230
Minority Interest 44,772 42,405
Shareholders' Equity
Common shares, no par value 926 968
Additional paid-in capital 112,306 116,696
Unrealized loss on investment (5,563) (5,563)
Foreign currency translation (3,068) (2,812)
Retained earnings 619,388 670,984
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 723,989 780,273
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,881,088 $1,842,342
========== ==========
</TABLE>
See notes to consolidated condensed financial statements.
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WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In Thousands Except Per Share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
--------------------------
1998 1997
-------- --------
<S> <C> <C>
Net sales $409,280 $387,561
Cost of goods sold 347,602 326,386
-------- --------
GROSS MARGIN 61,678 61,175
Selling, general & administrative expense 32,072 25,602
-------- --------
OPERATING INCOME 29,606 35,573
Other income (expense):
Miscellaneous income (expense) 2,362 (208)
Interest expense (8,943) (6,778)
Equity in net income of unconsolidated
affiliates 5,055 4,701
-------- --------
EARNINGS BEFORE INCOME TAXES 28,080 33,288
Income taxes 10,390 12,317
-------- --------
EARNINGS FROM CONTINUING OPERATIONS 17,690 20,971
Discontinued Operations:
INCOME (LOSS) FROM OPERATIONS, NET OF TAXES (1,316) 1,783
-------- --------
NET EARNINGS $ 16,374 $ 22,754
======== ========
AVERAGE COMMON SHARES OUTSTANDING 95,750 96,739
EARNINGS PER COMMON SHARE - BASIC & DILUTED
EARNINGS FROM CONTINUING OPERATIONS $ .18 $ .22
EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAXES (.01) .02
-------- --------
NET EARNINGS $ .17 $ .24
======== ========
CASH DIVIDENDS DECLARED
PER COMMON SHARE $ .14 $ .13
-------- --------
</TABLE>
See notes to consolidated condensed financial statements.
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WORTHINGTON INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands, Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
August 31,
-------------------------
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 16,374 $ 22,754
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 18,641 14,922
Deferred income taxes (54) (54)
Equity in undistributed net income of unconsolidated affiliates (3,460) 881
Minority interest in net loss of consolidated subsidiary (1,473) -
Net gain on sale of assets (600) -
Changes in assets and liabilities:
Current assets 16,578 12,445
Other assets (1,339) 3,698
Current liabilities (17,532) 16,328
Other liabilities 34 486
-------- --------
Net Cash Provided By Operating Activities 27,169 71,460
INVESTING ACTIVITIES
Investment in property, plant and equipment, net (48,862) (74,436)
Acquisitions, net of cash acquired (26,718) -
Proceeds from sale of assets 2,759 -
-------- --------
Net Cash Used By Investing Activities (72,821) (74,436)
FINANCING ACTIVITIES
Proceeds from short-term borrowings 121,268 1,300
Proceeds from long-term debt 2,550 1,900
Principal payments on long-term debt (1,609) (4,441)
Proceeds from issuance of common shares (34) 615
Proceeds from minority interest 3,839 10,561
Repurchase of common shares (59,422) -
Dividends paid (13,532) (12,572)
-------- --------
Net Cash Provided (Used) By Financing Activities 53,060 (2,637)
-------- --------
Increase (decrease) in cash and cash equivalents 7,408 (5,613)
Cash and cash equivalents at beginning of period 3,788 7,212
-------- --------
Cash and cash equivalents at end of period $ 11,196 $ 1,599
======== ========
</TABLE>
See notes to consolidated condensed financial statements.
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WORTHINGTON INDUSTRIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - MANAGEMENT'S OPINION
In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all adjustments
(consisting of those of a normal recurring nature) necessary to present
fairly the financial position of Worthington Industries, Inc. and
Subsidiaries (the Company) as of August 31, 1998 and May 31, 1998; the
results of operations for the three months ended August 31, 1998 and
1997, and cash flows for the three months ended August 31, 1998 and
1997.
The accounting policies followed by the Company are set forth
in Note A to the consolidated financial statements in the 1998
Worthington Industries, Inc. Annual Report to Shareholders which is
included in the Company's 1998 Form 10-K.
NOTE B - INCOME TAXES
The income tax rate is based on statutory federal and state
rates, and an estimate of annual earnings adjusted for the permanent
differences between reported earnings and taxable income.
NOTE C- RESULTS OF OPERATIONS
The results of operations for the three months ended August
31, 1998 are not necessarily indicative of the results to be expected
for the full year.
NOTE D- ACQUISITION
In June, 1998, the Company acquired the stock of Jos. Heiser
vormals J. Winter's Sohn, Gmbh (Heiser) for approximately $27 million
(net of cash acquired) plus $7.3 million of debt assumed, in a business
combination accounted for as a purchase. Based in Gaming, Austria,
Heiser is Europe's leading producer of high pressure industrial gas
cylinders. The results of operations for Heiser are included in the
financial statements of the Company since the date of acquisition.
Goodwill in the amount of $12.9 million resulting from the purchase is
being amortized using the straight-line method over 40 years. Proforma
results including Heiser since the beginning of the earliest period
presented would not be materially different than actual results.
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NOTE E- COMPREHENSIVE INCOME
In June 1997, the Financial Standards Accounting Board issued
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" which requires separate reporting of certain
items affecting shareholders' equity outside of those included in
arriving at net earnings. The statement is effective for periods
beginning in fiscal 1999 and requires disclosing comprehensive income
for interim periods which is shown below.
<TABLE>
<CAPTION>
Three Months Ended August 31
----------------------------
1998 1997
---- ----
<S> <C> <C>
Comprehensive Income:
Net Income $16,374 $22,754
Other Comprehensive Income (Loss), net of tax:
Unrealized Gain on Investment -- 4,031
Foreign Currency Translation (256) --
------- -------
Other Comprehensive Income (Loss) (256) 4,031
------- -------
Comprehensive Income $16,118 $26,785
======= =======
</TABLE>
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WORTHINGTON INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DISCONTINUED OPERATIONS
As a result of the decision of the Company to divest its subsidiaries,
Worthington Custom Plastics, Worthington Precision Metals and Buckeye Steel
Castings Company, the Custom Products and Cast Products segments of the Company
have been restated as Discontinued Operations. Accordingly, the Company's
Continuing Operations consist of only the Processed Steel Products segment and
its equity in joint ventures. During the quarter, the Company sold its scrap
recycling business, I.H. Schlezinger, Inc. and reached agreements to sell the
Worthington Precision Metals business and the garage door division of the metal
framing business.
RESULTS
For the first quarter ended August 31, 1998, sales increased 6% to
$409.3 million. Earnings from continuing operations were $17.7 million compared
to $21.0 million for the previous year's first quarter and earnings per share
from continuing operations were $.18 versus $.22 last year. Discontinued
operations had a net loss for the quarter of $1.3 million, down 174% from last
year. Net earnings and net earnings per share, which include the Company's
discontinued operations, were $16.4 million and $.17 respectively, compared to
$22.8 million and $.24 for the previous year.
RESULTS FROM CONTINUING OPERATIONS
Overall for the first quarter, demand in most of the Company's
continuing product lines was stronger in fiscal 1999 than in fiscal 1998,
reflected in increased sales for all lines of business. Profit margins from
continuing operations were down, however, as a result of the strike at General
Motors and startup costs relating to the ramp-up of the Decatur and Spartan
operations. The Company estimates the impact of those items was $.05 per share
on continuing operations. The impact of the startup costs will continue to be
felt through fiscal 1999. For the first quarter, gross margin as a percentage of
sales was 15.1% in fiscal 1999 and 15.8% in 1998. Operating income as a percent
of sales decreased to 7.2% in fiscal 1999 from 9.2% in fiscal 1998. The fire at
the Monroe, Ohio facility (discussed below) did not materially impact margins
due to recoveries under business interruption insurance, which approximated the
lost operating income which would have resulted had the fire not occurred. For
the three months ended August 31, 1998, $1.6 million of business interruption
insurance recovery was included in net sales.
Steel processing sales were flat compared to fiscal 1998's first
quarter. Additional sales generated by Delta, Decatur and Spartan were offset by
the effect of
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the General Motors strike and the lost sales at Monroe. Operating income in
steel processing was lower due to the strike and start-up losses at Decatur and
Spartan offset by the profit contribution from the Delta plant. In June 1998,
the Company purchased Jos. Heiser vormals J. Winter's Sohn, Gmbh (Heiser) for
approximately $27 million (net of cash acquired) plus $7.3 million of debt
assumed. Based in Gaming, Austria, Heiser is Europe's leading producer of high
pressure industrial gas cylinders. Pressure cylinders sales and operating income
were up over fiscal 1998's first quarter due to increased volume in most product
lines and the acquisition of Heiser. Both sales and operating income increased
for the metal framing operation, reflecting higher overall selling prices. Sales
and operating income from the automotive body panel business were up in the
first quarter, reflecting additional volume and a favorable shift in product mix
to service parts versus those sold to original equipment manufacturers (OEMs).
On August 14, 1997, the Company experienced a fire at the Monroe, Ohio,
facility. The fire destroyed the pickling area of the facility and caused
extensive damage to other parts of the plant. The Company shifted a significant
amount of the business to other locations, with the remainder sent to third
party processors. Blanking returned to operation in September 1997, and slitting
returned in March 1998. Pickling resumed in September 1998. The Company has
increased both pickling and storage capacity at this facility beyond its
pre-fire capabilities.
For the first quarter, selling, general and administrative (SG&A)
expense as a percentage of sales was 7.8% in fiscal 1999 and 6.6% in 1998. The
SG&A percentage increased in the first quarter of fiscal 1999 because of the
overhead costs incurred at the Decatur and Spartan facilities without
corresponding sales levels. Because of restating for discontinued operations,
all corporate overhead costs have been reflected in the results from continuing
operations.
Quarterly interest expense of $8.9 million increased 32% over first
quarter of fiscal 1998 as a result of higher debt levels. Average debt
outstanding for the quarter was $656 million in fiscal 1999 and $512 million in
1998. Debt levels rose in fiscal 1999 to fund capital spending, including the
construction of the Decatur and the Spartan facilities, and the acquisition of
Heiser. At August 31, 1998, approximately 43% of the Company's total debt
(excluding DECS) was at fixed rates of interest. During September 1998, the
Company unwound $100,000,000 of interest rate swap agreements that were in place
at August 31, 1998. Capitalized interest for the first quarter totaled $3.0
million in fiscal 1999 and $1.5 million in 1998.
Equity in net income of unconsolidated affiliates increased 8% in the
first quarter of fiscal 1999. WAVE continued to be the major contributor to
joint venture equity by posting increases in sales and earnings. WSP and TWB
also contributed to the increased equity. Acerex's equity was down, due to the
recent drop in the value of the peso.
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The effective tax rate for the first quarter of fiscal 1999 remained at
37%.
RESULTS FROM DISCONTINUED OPERATIONS
First quarter fiscal 1999 sales from discontinued operations of $97
million were down 14% from 1998, primarily due to the strike at General Motors.
Sales increased for Cast Products but this was offset by a sales decrease for
Custom Products. The Cast Products increase was due to significant rail car
volume improvement. Net earnings for the first quarter decreased to a loss of
$1.3 million in fiscal 1999 from the previous year's $1.8 million of income due
to the decrease at Custom Products noted above.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended August 31, 1998, total assets increased
slightly to $1.9 billion, primarily reflecting the Company's increased
investment in property, plant and equipment and a $32 million increase in
inventory offset by a $41 decrease in accounts receivable. Capital investments
totaled $76 million for the three months, including $27 million for the Heiser
acquisition. The most significant projects were the Decatur, Alabama, steel
processing plant, and the rebuild of the Monroe, Ohio, facility. Accounts
receivable decreased in line with the Company's normal sales decline from the
fourth quarter of the previous year to the first quarter of the new fiscal year.
Inventory increased mostly due to the higher levels needed to support the Delta
and Decatur startups.
Current liabilities increased by $112 million during the quarter to
$522 million, primarily due to a $121 million increase in notes payable.
Accordingly, the current ratio at August 31, 1998 was 1.2 to 1 versus 1.6 to 1
at May 31, 1998.
The Company uses short-term uncommitted lines of credit extended by
various commercial banks to finance its business operations. Maturities on these
borrowings typically range from one to ninety days. To ensure liquidity, the
Company maintains a revolving credit facility with a group of commercial banks.
During October 1998, the Company increased the amount of the revolving credit
facility to $300 million from $190 million. The $110 million increase in
commitments was extended by the existing bank group and expires in September
1999. Previously existing commitments totalling $190 million continue to expire
in May 2003. At August 31, 1998, there were no outstanding borrowings under the
revolving credit facility.
In March 1997, Debt Exchangeable for Common Stock (DECS), payable in
Rouge stock, was issued by the Company. In the opinion of the Company, it is
appropriate to examine the Company's debt without the DECS, since the Company
may satisfy the DECS with currently owned Rouge stock. The DECS value as of
August 31, 1998 was $46.5 million due to a decrease in the value of the Rouge
common stock.
At August 31, 1998, the Company's total debt (excluding the DECS) was
$631 million compared to $502 million (excluding the DECS) at the end of fiscal
1998. As a
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result, total debt to committed capital increased to 47% (excluding the DECS)
versus fiscal year end's 39% (excluding the DECS). Debt was incurred primarily
to finance the Company's capital investments in property, plant and equipment
and the Heiser acquisition, and to repurchase stock. During the quarter, the
Company repurchased approximately 4.2 million shares of stock for $59 million
and the Board of Directors increased the repurchase authorization by 10 million
additional shares.
Cash provided by operating activities of $27 million was down from $71
million in fiscal 1998, primarily due to increased working capital requirements.
On December 9, 1997, the Company issued $150 million of 6.7% notes due
2009 off of the $450 million "shelf" registration established in May 1996,
substantially depleting the shelf. As there were no plans to issue any of the
remainder of this "shelf" registration, it was deregistered by post effective
amendment in June 1998.
The Company's immediate borrowing capacity, in addition to cash
generated from operations, should be more than sufficient to fund expected
normal operating costs, dividends, debt payments and capital expenditures for
existing businesses. While there are no specific needs at this time, the Company
regularly considers long-term debt issuance an alternative depending on
financial market conditions.
ENVIRONMENTAL
The Company believes environmental issues will not have a material
effect on capital expenditures, consolidated financial position, future results
or operations.
IMPACT OF YEAR 2000
The Company is currently conducting a detailed assessment of all
information technology (IT) and non-information technology (non-IT) hardware and
software with regard to year 2000 issues. Non-IT components include embedded
technology in the manufacturing plants in equipment-related hardware and
software, as well as communication systems.
The Company is not materially reliant on third party systems (e.g.
electronic data interchange) to conduct business. In addition, the Company has
initiated communications with significant vendors and customers to confirm their
plans to become year 2000 ready and assess any possible risk to or effects on
the Company's operations. The vendor and customer responses are being evaluated
and incorporated into the current detailed assessment.
Over the last two years, the Company has utilized both internal and
external resources to modify, replace, and test mainframe software to make it
year 2000 ready. These year 2000 projects are at varying stages of completion.
Some systems have been or are currently being replaced with year 2000 ready
systems for business reasons and some mainframe code updates have been or are
currently being
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implemented. A comprehensive review of these projects is also being performed as
part of the detailed assessment in progress. In fiscal 1998, approximately $1
million was expended to remediate year 2000 issues. This amount excludes the
cost of year 2000 ready hardware and software recently implemented by the
Company.
Since this assessment is in progress, the estimated total cost to
remediate all year 2000 issues is not readily determinable. Preliminary
estimates to update mainframe codes were approximately $2 million. This figure
will be revised as a result of the current assessment. The assessment is
expected to be completed in November 1998. Year 2000 projects to date have
inspected approximately 50% of the software and hardware potentially not ready
for the year 2000 (i.e., those systems not recently replaced with year 2000
ready systems.)
In summary, while the Company continues its efforts to evaluate and
remediate year 2000 issues, the final assessment is not complete. The Company
expects no material impact to its results from operations or financial condition
as a result of year 2000 issues. The scope of contingency planning will hinge
upon the results of the current assessment.
EURO-CURRENCY
The European Union's new common currency is scheduled to be introduced
on January 1, 1999. The Company expects no material impact to its results from
operations or financial condition as a result of this change, due to the
Company's limited overseas operations.
SAFE HARBOR STATEMENT
The Company wishes to take advantage of the Safe Harbor provisions
included in the Private Securities Litigation Reform Act of 1995 (the "Act").
Statements by the Company relating to future revenues and growth, stock
appreciation, plant start-ups, capabilities, the impact of year 2000 and other
statements which are not historical information constitute "forward looking
statements" within the meaning of the Act. All forward looking statements are
subject to risks and uncertainties which could cause actual results to differ
from those projected. Factors that could cause actual results to differ
materially include, but are not limited to, the following: general economic
conditions; conditions in the Company's major markets; competitive factors and
pricing pressures; product demand and changes in product mix; changes in pricing
or availability of raw material, particularly steel; delays in construction or
equipment supply; year 2000 issues; and other risks described from time to time
in the Company's filings with the Securities and Exchange Commission.
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PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
The information provided under Item 5 of this report is incorporated
herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Registrant's Annual Meeting of Shareholders was held on September
24, 1998. In connection with the meeting, proxies were solicited. Following are
the voting results on proposals considered and voted upon.
1. All nominees for the election to the Class of Directors whose term
expires in 2001 were elected by the shareholders who were present or represented
by proxy.
VOTES FOR
THE ELECTION AUTHORITY TO
OF DIRECTOR VOTE WITHHELD
----------- -------------
John P. McConnell 81,045,644 978,767
Robert B. McCurry 80,913,729 1,110,682
Gerald B. Mitchell 81,039,134 985,277
Mary Schiavo 80,997,394 1,027,017
2. The proposal which provided, among other things, for the change of
the Company's state of incorporation from Delaware to Ohio through a merger of
the Company into Worthington Industries, Inc., an Ohio corporation and a
wholly-owned subsidiary of the Company, and for related changes to the Company's
organizational documents was approved by the following vote:
FOR: 69,529,770 AGAINST: 2,338,033
ABSTAIN: 279,775 BROKER NON-VOTES: 9,876,834
3. The selection of Ernst & Young LLP as auditors of the Company for
the fiscal year ending May 31, 1999 was ratified by the following vote:
FOR: 81,710,478 AGAINST: 115,034 ABSTAIN: 198,899
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ITEM 5. OTHER INFORMATION
On October 13, 1998, Worthington Industries, Inc., a Delaware
corporation("Worthington Delaware"), was merged (the "Merger") with and into
Worthington Industries, Inc., an Ohio corporation and a wholly-owned subsidiary
of Worthington Delaware ("Worthington Ohio"). Each share of common stock, par
value $0.01 per share (the "Worthington Delaware Shares"), of Worthington
Delaware was converted into one common share, without par value (the
"Worthington Ohio Common Shares"), of Worthington Ohio. By virtue of the Merger,
Worthington Ohio has succeeded to all the business, properties, assets and
liabilities of Worthington Delaware and the directors, officers and employees of
Worthington Delaware have become directors, officers and employees of
Worthington Ohio. Pursuant to Rule 12g-3(a) under the Securities Exchange Act of
1934 (the "Exchange Act"), the Worthington Ohio Common Shares are deemed to be
registered under the Exchange Act.
In addition, Worthington Ohio assumed all of the obligations of
Worthington Delaware under the Indenture, dated as of May 15, 1996, as
supplemented, of Worthington Delaware to PNC Bank, National Association
(formerly known as PNC Bank, Ohio, National Association), and the debt
securities issued thereunder.
The following paragraphs summarize the material attributes of the
Worthington Ohio Common Shares. The statements with respect to the Worthington
Ohio Common Shares are brief summaries of the provisions of the Amended Articles
of Incorporation (the "Articles") of Worthington Ohio and the Code of
Regulations (the "Regulations") of Worthington Ohio, which are filed as exhibits
hereto. The following statements are qualified in their entirety by reference to
the Articles and the Regulations.
GENERAL
The Articles authorize 150,000,000 Worthington Ohio Common Shares,
500,000 Class A Preferred Shares, without par value, and 500,000 Class B
Preferred Shares, without par value (collectively, the "Preferred Shares"). As
of October 13, 1998, the effective date of the Merger, 92,469,609 Worthington
Ohio Common Shares were issued and outstanding and there were no Preferred
Shares issued. The Articles authorize the Board of Directors of Worthington Ohio
to issue the Preferred Shares in one or more series and to establish the
designations, preferences and rights of each such series. Until changed by the
Worthington Ohio shareholders, each Class A Preferred Share will have one vote
and each Class B Preferred Share will have ten votes on each matter submitted to
holders of the Preferred Shares.
The Worthington Ohio Common Shares are designated Nasdaq National
Market securities.
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VOTING RIGHTS
Quorum for Meetings of Shareholders
The Regulations provide that the holders of one-third of the voting
power of Worthington Ohio must be present in person or by proxy to constitute a
quorum at a meeting of shareholders called by the Board of Directors. Otherwise,
the holders of a majority of the voting power of Worthington Ohio must be
present in order to constitute a quorum.
General Voting Rights
Each Worthington Ohio Common Share entitles the holder thereof to one
vote for the election of directors and for all other matters submitted to the
shareholders of Worthington Ohio for their consideration.
The Regulations provide that all elections of directors will be
determined by a plurality of the votes cast. Except as otherwise required by
law, the Articles or the Regulations, any other matter submitted to the
shareholders for their vote will be decided by the vote of the holders of a
majority of the votes entitled to be cast by the holders of all then outstanding
voting shares, present in person or by proxy, and entitled to vote with respect
to such matter.
Special Vote Requirements
The Articles require the affirmative vote of the holders of 75% of the
outstanding shares of Worthington Ohio entitled to vote generally in the
election of directors (the "Voting Stock") to adopt amendments to the provisions
of the Articles addressing the classification of the Board of Directors, the
fixing of the number of directors, the advance notification of shareholder
nominations, the removal of directors and the filing of vacancies, the calling
of special meetings of shareholders, the requirement that shareholders take
actions at a meeting, the vote required for approval of business combinations
with 15% shareholders (must also include the affirmative vote of the holders of
a majority of the outstanding Voting Stock excluding the 15% shareholder in
question), the factors to be considered by the directors in evaluating
significant corporate transactions and the required vote for the amendment of
the Articles and the Regulations. Other amendments must be approved by the
affirmative vote of the holders of a majority of the outstanding Voting Stock.
The Articles require the affirmative vote of the holders of 75% of the
outstanding Voting Stock to approve an amendment, alteration, change or repeal
of the Regulations unless it has been approved by three-fourths of the
authorized number of directors, in which case the required affirmative vote is a
majority of the outstanding Voting Stock.
Articles SEVENTH of the Articles (the "Supermajority Voting
Provisions") provides that Business Combinations (as defined below) between
Worthington Ohio, or a subsidiary thereof, and a Substantial Shareholder (as
defined below) require the affirmative vote of the holders of not less than 75%
of the Voting Stock; provided that such affirmative vote must include the
affirmative vote of a majority of all then
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<PAGE> 17
outstanding shares of Voting Stock not beneficially owned by the Substantial
Shareholder. Three-fourths of the authorized number of directors may, in all
such cases, determine not to require such supermajority vote, but only if a
majority of the directors in office and acting upon such matter are "Continuing
Directors" (as defined). Such determination may be made either before or after
any Substantial Shareholder in question achieves such status.
A "Substantial Shareholder" generally is defined as the "beneficial
owner" (as defined) of 15% or more of the outstanding shares of Voting Stock. A
Substantial Shareholder does not include Worthington Ohio, any subsidiary
thereof, any employee benefit plan thereof, the trustees of any such plan or any
affiliate of Worthington Ohio owning in excess of 10% of the outstanding
Worthington Delaware Shares on August 3, 1998.
A "Business Combination" subject to the Supermajority Voting Provisions
includes: a merger or consolidation involving Worthington Ohio, or any
subsidiary thereof, and a Substantial Shareholder; a sale, lease or other
disposition of a "substantial part" of the assets of Worthington Ohio or any
subsidiary thereof (that is, assets constituting in excess of 10% of the book
value of the total consolidated assets of Worthington Ohio) to a Substantial
Shareholder; an issuance of equity securities of Worthington Ohio to a
Substantial Shareholder for consideration aggregating $25,000,000 or more; a
liquidation or dissolution of Worthington Ohio (if as of the record date for the
determination of shareholders entitled to vote with respect thereto, any person
is a Substantial Shareholder); and a reclassification or recapitalization of
securities (including any reverse stock split) of Worthington Ohio or any
subsidiary thereof or a reorganization, in any case having the effect, directly
or indirectly, of increasing the percentage interest of a Substantial
Shareholder in any class of equity securities of Worthington Ohio or such
subsidiary.
A "Continuing Director" is defined as any individual serving as a
director of Worthington Ohio on October 13, 1998, or any individual elected or
appointed prior to the time the Substantial Shareholder in question acquires
such status, or an individual designated as a Continuing Director (prior to his
or her initial election or appointment) by three-fourths of the authorized
number of directors, but only if a majority thereof then consists of Continuing
Directors.
Worthington Ohio has opted out of Section 1701.831 of the Ohio Revised
Code (the "Ohio Control Share Acquisition Statute") and Chapter 1704 of the Ohio
Revised Code (the "Merger Moratorium Statute").
NOMINATION PROCEDURE; NUMBER OF DIRECTORS; CLASSIFIED BOARD
The Regulations provide that a shareholder nomination for election to
the Board of Directors must be made in writing and must be received at the
principal executive offices of Worthington Ohio not less than 14 days nor more
than 50 days prior to any meeting of shareholders called for the election of
directors; however, if less than 21
17
<PAGE> 18
days' notice of the meeting is given to the shareholders, such nomination must
be so received not later than the close of business on the seventh day following
the day on which the notice of the meeting was mailed. The notification must
contain the following information to the extent known to the notifying
shareholder: (a) the name, age, business address and residence address of each
proposed nominee; (b) the principal occupation of each proposed nominee; (c) the
number of shares of Worthington Ohio beneficially owned by the proposed nominee
and by the notifying shareholder; (d) the name and address of the notifying
shareholder; and (e) any other information required to be disclosed with respect
to a nominee for election as a director in proxy solicitations pursuant to
Regulation 14A under the Exchange Act or any successor statute, rule or
provision. Nominations which the chairman of the meeting determines are not made
in accordance with the Regulations would be disregarded.
Subject to the rights of any holders of Preferred Shares, the number of
directors may be determined by the affirmative vote of shareholders holding 75%
of the outstanding voting power or by the affirmative vote of a majority of the
whole authorized number of directors. The number of directors may not be fewer
than three or more than eighteen.
The Board of Directors of Worthington Ohio is divided into three
classes. The election of each class of directors constitutes a separate
election. Directors serve for terms of three years and until their respective
successors are duly elected and qualified, or until their earlier resignation,
removal from office or death. As a result of the classification of the
Worthington Ohio Board, a minimum of two annual meetings of shareholders will be
necessary for a majority of the Board members to stand for election.
ADVANCE NOTIFICATION OF SHAREHOLDER PROPOSALS
The Regulations provide that a shareholder must give advance notice of
any proposal relating to business to be conducted at a meeting. To be timely, a
shareholder's notice must be received at the principal executive offices of
Worthington Ohio not less than 30 days prior to the meeting; however, if less
than 40 days' notice of the meeting is given or made to the shareholders, such
notice must be received no later than the close of business on the tenth day
following the day on which the notice of the meeting was mailed. The
shareholder's notice must set forth in writing as to each matter the shareholder
proposes to bring before the meeting: (1) a brief description of the business to
be brought before the meeting and the reasons for conducting such business at
the meeting; (2) the name and address, as they appear on Worthington Ohio's
books, of the shareholder of record proposing such business; (3) the class and
number of shares of Worthington Ohio that are beneficially owned by such
shareholder; and (4) any material interest of the shareholder in such proposal.
A shareholder will also be required to comply with all applicable requirements
of the Exchange Act and the rules and regulations thereunder governing
shareholder proposals. The determination as to whether the notice provisions
have been met will be made by the chairman of the
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<PAGE> 19
meeting. This provision applies only to new business and not to other reports of
officers, directors or committees of the Board of Directors.
REMOVAL OF DIRECTORS AND FILLING OF VACANCIES
Subject to the rights of holders of Preferred Shares, a director may be
removed from office, with or without cause, by the affirmative vote of the
holders of 75% of the outstanding Voting Stock or for cause, by the affirmative
vote of three-fourths of the directors then in office. Subject to the rights of
holders of Preferred Shares, vacancies in the Board of Directors and any
newly-created directorships resulting from any increase in the number of
directors may be filled by the affirmative vote of a majority of the directors
then in office.
PRE-EMPTIVE RIGHTS
Shareholders of Worthington Ohio do not have pre-emptive rights.
REPURCHASES
Worthington Ohio has the right to repurchase, if and when any
shareholder desires to sell, or on the happening of any event is required to
sell, shares previously issued. However, Worthington Ohio may not repurchase
shares if immediately thereafter its assets would be less than its liabilities
plus its stated capital, if any, or if Worthington Ohio is insolvent or would be
rendered insolvent by such a purchase.
DIVIDEND RIGHTS
Worthington Ohio may pay dividends in an amount which does not exceed
the combination of the surplus of Worthington Ohio and the difference between
(a) the reduction in surplus that results from the immediate recognition of the
transition obligation under Statement of Financial Accounting Standards No. 106
("SFAS No. 106") issued by the Financial Accounting Standards Board and (b) the
aggregate amount of the transition obligation that would have been recognized as
of the date of the declaration of a dividend or distribution if Worthington Ohio
had elected to amortize its recognition of the transition obligation under SFAS
No. 106. No dividend may be paid to the holders of Common Shares in violation of
the rights of holders of Preferred Shares or when Worthington Ohio is insolvent
or there is reasonable ground to believe that by such payment it would be
rendered insolvent. Worthington Ohio must notify its shareholders if a dividend
is paid out of capital surplus.
LIQUIDATION RIGHTS
In the event of any dissolution, liquidation or winding up of the
affairs of Worthington Ohio, the holders of Worthington Ohio Common Shares will
be entitled, after payment or provision for payment in full of the debts and
other liabilities of Worthington Ohio and the amounts to which the holders of
Preferred Shares would be entitled, to share ratably in the remaining assets of
Worthington Ohio available for distribution to its shareholders to the exclusion
of the Preferred Shares (unless otherwise provided by the Board of Directors in
any resolution providing for the issue of a series of Class A Preferred Shares
or of Class B Preferred Shares).
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<PAGE> 20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
A. Exhibits.
Exhibit 2 Agreement of Merger, dated as of August
20, 1998, between Worthington Industries,
Inc., the Delaware corporation and
Worthington Industries, Inc., the Ohio
corporation
Exhibit 3(a) Amended Articles of Incorporation
Exhibit 3(b) Code of Regulations
Exhibit 27 Financial Data Schedule
B. Reports on Form 8-K. There were no reports on Form 8-K during
the three months ended August 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORTHINGTON INDUSTRIES, INC.
Date: October 14, 1998 By:/s/ JOHN P. MCCONNELL
---------------- -----------------------
John P. McConnell
Chairman & CEO
By:/s/ MICHAEL R. SAYRE
-----------------------
Michael R. Sayre
Controller
20
<PAGE> 1
Exhibit 2
AGREEMENT OF MERGER
<PAGE> 2
AGREEMENT OF MERGER
AGREEMENT OF MERGER ("Merger Agreement"), dated as of August 20, 1998, by
and between WORTHINGTON INDUSTRIES, INC., a Delaware corporation ("WII
DELAWARE"), and WORTHINGTON INDUSTRIES, INC., an Ohio corporation ("WII OHIO").
WII DELAWARE and WII OHIO are hereinafter sometimes collectively referred to as
the "Constituent Corporations."
WITNESSETH:
WHEREAS, the authorized capital stock of WII OHIO consists of 150,000,000
Common Shares, each without par value, 1,000 of which are issued and outstanding
and owned by WII DELAWARE; 500,000 Class A Preferred Shares, each without par
value, none of which have been issued; and 500,000 Class B Preferred Shares,
each without par value, none of which have been issued; and
WHEREAS, WII DELAWARE, as the sole shareholder of WII OHIO, desires to
effect a merger of WII DELAWARE with and into WII OHIO pursuant to the
provisions of the General Corporation Law of the State of Delaware (the "DGCL")
and the General Corporation Law of the State of Ohio (the "OGCL"); and
WHEREAS, the respective Boards of Directors of WII DELAWARE and WII OHIO
have determined that it is advisable and in the best interest of each of such
corporations that WII DELAWARE merge with and into WII OHIO upon the terms and
subject to the conditions herein provided; and
WHEREAS, the Board of Directors of WII OHIO has, by resolution duly
adopted, approved this Merger Agreement and directed that it be executed by the
undersigned officers; and
WHEREAS, the Board of Directors of WII DELAWARE has, by resolution duly
adopted, approved this Merger Agreement and directed that it be executed by the
undersigned officers and that it be submitted to a vote of the stockholders of
WII DELAWARE;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties agree that WII DELAWARE shall be merged with and into WII OHIO and
that the terms and conditions of the merger, the mode of carrying the merger
into effect, the manner of converting the shares of the Constituent Corporations
and certain other provisions relating thereto shall be as hereinafter set forth.
ARTICLE I
THE MERGER
SECTION 1.01. SURVIVING CORPORATION. Subject to the terms and provisions of
this Merger Agreement, and in accordance with the DGCL and the OGCL, at the
Effective Time (as defined in Section 1.07 hereof), WII DELAWARE shall be merged
with and into WII OHIO (the "Merger"). WII OHIO shall be the surviving
corporation (hereinafter sometimes called the "Surviving Corporation") of the
Merger and shall continue its corporate existence under the laws of the State of
Ohio. At the Effective Time, the separate corporate existence of WII DELAWARE
shall cease.
SECTION 1.02. EFFECTS OF THE MERGER. At the Effective Time, the Merger
shall have the effects provided for herein and in Section 1701.82 of the OGCL
and Section 259 of the DGCL.
SECTION 1.03. ARTICLES OF INCORPORATION. As of the Effective Time, the
Articles of Incorporation of WII OHIO, as in effect immediately prior to the
Effective Time, shall be amended and replaced in their entirety by the Amended
Articles of Incorporation attached hereto as Annex I, which Amended Articles of
Incorporation shall become, at the Effective Time, the articles of incorporation
of the Surviving Corporation until thereafter duly amended in accordance with
the provisions thereof and applicable law.
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<PAGE> 3
SECTION 1.04. REGULATIONS. As of the Effective Time, the Regulations of WII
OHIO, as in effect immediately prior to the Effective Time, shall be the
regulations of the Surviving Corporation until thereafter duly amended in
accordance with the provisions thereof, the articles of incorporation of the
Surviving Corporation and applicable law.
SECTION 1.05. DIRECTORS OF THE SURVIVING CORPORATION. At and after the
Effective Time and until changed in the manner provided in the regulations or
the articles of incorporation of the Surviving Corporation or as otherwise
provided by law, the number of directors of the Surviving Corporation shall be
the number of directors of WII DELAWARE immediately prior to the Effective Time.
At the Effective Time, each person who is a director of WII DELAWARE immediately
prior to the Effective Time shall become a director of the Surviving Corporation
and each such person shall serve as a director of the Surviving Corporation for
the balance of the term for which such person was elected a director of WII
DELAWARE and until his or her successor is duly elected and qualified in the
manner provided in the regulations or the articles of incorporation of the
Surviving Corporation or as otherwise provided by law or until his or her
earlier death, resignation or removal in the manner provided in the regulations
or the articles of incorporation of the Surviving Corporation or as otherwise
provided by law.
SECTION 1.06. OFFICERS OF THE SURVIVING CORPORATION. At the Effective Time,
each person who is an officer of WII DELAWARE immediately prior to the Effective
Time shall become an officer of the Surviving Corporation with each such person
to hold the same office in the Surviving Corporation, in accordance with the
regulations thereof, as he or she held in WII DELAWARE immediately prior to the
Effective Time.
SECTION 1.07. EFFECTIVE TIME. The Merger shall become effective in
accordance with the provisions of Section 1701.81 of the OGCL and Sections 252,
253 and 103 of the DGCL, upon the later to occur of (a) completion of the filing
of a certificate of merger with the Secretary of State of the State of Ohio, and
(b) completion of the filing of a certificate of merger with the Secretary of
State of the State of Delaware. The date and time when the Merger shall become
effective is herein referred to as the "Effective Time."
SECTION 1.08. CUMULATIVE VOTING. At and after the Effective Time, no holder
of shares of WII OHIO shall be entitled to vote cumulatively in the election of
directors.
SECTION 1.09. ADDITIONAL ACTIONS. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable
(a) to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of WII DELAWARE
acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purposes of this Merger Agreement, WII DELAWARE and
its proper officers and directors shall be deemed to have granted hereby to the
Surviving Corporation an irrevocable power of attorney to execute and deliver
all such proper deeds, assignments and assurances in law and to do all acts
necessary and proper to vest, perfect or confirm title to and the possession of
such property or rights in the Surviving Corporation and otherwise to carry out
the purposes of this Merger Agreement; and the proper officers and directors of
the Surviving Corporation are hereby fully authorized in the name of WII
DELAWARE or otherwise to take any and all such action.
ARTICLE II
MANNER, BASIS AND EFFECT OF CONVERTING SHARES
SECTION 2.01. CONVERSION OF SHARES. At the Effective Time:
(a) Each share of Common Stock, par value $0.01 per share (the "WII
Delaware Shares"), of WII Delaware issued and outstanding immediately prior
to the Effective Time shall, by virtue of the Merger and without any action
on the part of the holder thereof, be
3
<PAGE> 4
converted into one fully paid and nonassessable Common Share, without par
value (the "WII Ohio Common Shares"), of WII OHIO; and
(b) Each WII Delaware Share held in the treasury of WII DELAWARE
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of WII DELAWARE, be converted into one fully
paid and nonassessable WII Ohio Common Share and shall be held in the
treasury of the Surviving Corporation; and
(c) Each WII Ohio Common Share, issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be canceled and retired and shall
cease to exist, and shall not be converted into shares of the Surviving
Corporation or the right to receive cash or any other property.
SECTION 2.02. EFFECT OF CONVERSION. At and after the Effective Time, each
share certificate which immediately prior to the Effective Time represented
outstanding WII Delaware Shares (a "Delaware Certificate") shall be deemed for
all purposes to evidence ownership of, and to represent, the number of WII Ohio
Common Shares into which the WII Delaware Shares represented by such Delaware
Certificate immediately prior to the Effective Time have been converted pursuant
to Section 2.01 hereof. The registered holder of any Delaware Certificate
outstanding immediately prior to the Effective Time, as such holder appears in
the books and records of WII DELAWARE or its transfer agent immediately prior to
the Effective Time, shall, until such Delaware Certificate is surrendered for
transfer or exchange, have and be entitled to exercise any voting and other
rights with respect to and to receive any dividends or other distributions on
the WII Ohio Common Shares into which the WII Delaware Shares represented by any
such Delaware Certificate have been converted pursuant to Section 2.01 hereof.
SECTION 2.03. EXCHANGE OF CERTIFICATES. Each holder of a Delaware
Certificate shall, upon the surrender of such Delaware Certificate to WII Ohio
or its transfer agent for cancellation after the Effective Time, be entitled to
receive from WII OHIO or its transfer agent a certificate (an "Ohio
Certificate") representing the number of WII Ohio Common Shares into which the
WII Delaware Shares represented by such Delaware Certificate have been converted
pursuant to Section 2.01 hereof. If any such Ohio Certificate is to be issued in
a name other than that in which the Delaware Certificate surrendered for
exchange is registered, it shall be a condition of such exchange that the
Delaware Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such exchange shall
either pay any transfer or other taxes required by reason of the issuance of the
Ohio Certificate in a name other than that of the registered holder of the
Delaware Certificate surrendered, or establish to the satisfaction of WII OHIO
or its transfer agent that such tax has been paid or is not applicable.
SECTION 2.04. STOCK PLANS.
(a) Each option to purchase WII Delaware Shares granted under the
Worthington Industries, Inc. Amended 1980 Stock Option Plan, as amended (the
"1980 Plan"), the Worthington Industries, Inc. 1990 Stock Option Plan (the "1990
Plan") or the Worthington Industries, Inc. 1997 Long-Term Incentive Plan (the
"1997 Plan") which is outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder of any
such option, be converted into and become an option to purchase the same number
of WII Ohio Common Shares as the number of WII Delaware Shares which were
subject to such option immediately prior to the Effective Time at the same
option price per share and upon the same terms and subject to the same
conditions as are in effect at the Effective Time. The Surviving Corporation
shall reserve for purposes of the 1980 Plan, the 1990 Plan and the 1997 Plan a
number of WII Ohio Common Shares equal to the number of WII Delaware Shares
reserved by WII DELAWARE for issuance under the 1980 Plan, the 1990 Plan and the
1997 Plan as of the Effective Time. As of the Effective Time, WII OHIO hereby
assumes the 1980 Plan, the 1990 Plan and the 1997 Plan and all obligations of
WII DELAWARE under the 1980 Plan, the 1990 Plan and the 1997 Plan including the
outstanding options and other awards granted pursuant thereto.
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<PAGE> 5
(b) The Worthington Industries, Inc. Deferred Profit Sharing Plan (the
"Profit Sharing Plan") shall become an identical plan of the Surviving
Corporation at the Effective Time, automatically and without further act of
either of the Constituent Corporations or any participant thereunder, and each
person who is a participant under the Profit Sharing Plan shall thereafter
continue to participate thereunder upon identical terms and conditions;
provided, however, that at and after the Effective Time, each right to acquire
WII Delaware Shares shall thereafter be a right to acquire WII Ohio Common
Shares.
SECTION 2.05. INDENTURE. As of the Effective Time, WII OHIO hereby assumes
all of the obligations of WII DELAWARE under the Indenture, dated as of May 15,
1996, as supplemented, of WII DELAWARE to PNC Bank, Ohio, National Association,
as Trustee, and the Notes issued thereunder.
SECTION 2.06. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN. As of the
Effective Time, WII OHIO hereby assumes all of the obligations of WII DELAWARE
under the Worthington Industries, Inc. Dividend Reinvestment and Stock Purchase
Plan.
ARTICLE III
APPROVAL; AMENDMENT; TERMINATION; MISCELLANEOUS
SECTION 3.01. APPROVAL. This Merger Agreement shall be submitted for
approval by the stockholders of WII DELAWARE at a meeting of such stockholders.
SECTION 3.02. AMENDMENT. Subject to applicable law, this Merger Agreement
may be amended, modified or supplemented by written agreement of the Constituent
Corporations, after authorization of such action by the Boards of Directors of
the Constituent Corporations, at any time prior to the filing of certificates of
merger, as contemplated by Section 1.07 of this Merger Agreement, with the
Secretary of State of the State of Delaware and with the Secretary of State of
the State of Ohio, except that after the approval contemplated by Section 3.01
hereof, there shall be no amendments that would (a) alter or change the amount
or kind of shares or other property to be received by the holders of any class
or series of shares of either of the Constituent Corporations in the Merger, (b)
alter or change any term of the Amended Articles of Incorporation or Regulations
of WII OHIO, or (c) alter or change any of the terms and conditions of this
Merger Agreement if such alteration or change would adversely affect the holders
of any class or series of shares of either of the Constituent Corporations.
SECTION 3.03. ABANDONMENT. At any time prior to the filing of certificates
of merger, as contemplated by Section 1.07 of this Merger Agreement, with the
Secretary of State of the State of Delaware and with the Secretary of State of
the State of Ohio, this Merger Agreement may be terminated and the Merger may be
abandoned by the Board of Directors of either WII OHIO or WII DELAWARE, or both,
notwithstanding approval of this Merger Agreement by the stockholders of WII
DELAWARE.
SECTION 3.04. COUNTERPARTS. This Merger Agreement may be executed in one or
more counterparts, each of which shall be deemed to be a duplicate original, but
all of which, taken together, shall be deemed to constitute a single instrument.
SECTION 3.05. DESIGNATED AGENT IN DELAWARE. The Surviving Corporation
agrees that it may be served with process in the State of Delaware in any
proceeding for enforcement of any obligation of WII DELAWARE, as well as for
enforcement of any obligation of the Surviving Corporation arising from the
Merger, and the Surviving Corporation irrevocably appoints the Secretary of
State of the State of Delaware as its agent to accept service of process in any
such suit or other
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<PAGE> 6
proceeding; a copy of such process shall be mailed by the Secretary of State of
the State of Delaware to:
Dale T. Brinkman, Esq.
1205 Dearborn Drive
Columbus, OH 43085-4769
IN WITNESS WHEREOF, WII DELAWARE and WII OHIO have caused this Merger
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
<TABLE>
<S> <C>
WORTHINGTON INDUSTRIES, INC.,
Attest: an Ohio corporation
By: /s/ Dale T. Brinkman By: /s/ Donal H. Malenick
------------------------------------------------ --------------------------------------------------
Dale T. Brinkman,
Assistant Secretary Its: President
--------------------------------------------------
WORTHINGTON INDUSTRIES, INC.,
Attest: a Delaware corporation
By: /s/ Dale T. Brinkman By: /s/ Donal H. Malenick
------------------------------------------------ --------------------------------------------------
Dale T. Brinkman,
Assistant Secretary Its: President
--------------------------------------------------
</TABLE>
6
<PAGE> 1
Exhibit 3a
AMENDED ARTICLES OF INCORPORATION OF
WORTHINGTON INDUSTRIES, INC.
<PAGE> 2
AMENDED ARTICLES OF INCORPORATION
OF
WORTHINGTON INDUSTRIES, INC.
FIRST: The name of the Corporation shall be Worthington Industries,
Inc.
SECOND: The place in Ohio where the principal office of the
Corporation is to be located is in the City of Columbus, County of
Franklin.
THIRD: The purpose for which the Corporation is formed is to engage in
any lawful act or activity for which corporations may be formed under
Sections 1701.01 to 1701.98 of the Ohio Revised Code.
FOURTH: I. Capital Stock. The total number of shares which the
Corporation shall have authority to issue is One Hundred Fifty-one Million
(151,000,000) shares, of which One Hundred Fifty Million (150,000,000),
each without par value, shall be of a class designated "Common Shares,"
Five Hundred Thousand (500,000), each without par value, shall be of a
class designated "Class A Preferred Shares" and Five Hundred Thousand
(500,000), each without par value, shall be of a class designated "Class B
Preferred Shares." The Class A Preferred Shares and the Class B Preferred
Shares are sometimes collectively referred to herein as the "Preferred
Shares."
II. Preferred Shares. The Board of Directors is authorized to provide
for the issuance from time to time in one or more series of any number of
authorized and unissued Class A Preferred Shares and Class B Preferred
Shares. Subject to the provisions of this ARTICLE FOURTH and the
limitations prescribed by law, the board of directors is expressly
authorized to adopt amendments to these Amended Articles of Incorporation
in respect of any unissued or treasury Class A Preferred Shares and Class B
Preferred Shares and thereby establish or change the number of shares to be
included in each such series and to fix the designation and relative
rights, preferences, qualifications and limitations or restrictions of the
shares of each such series. The authority of the board of directors with
respect to each series shall include, but not be limited to, determination
of the following:
A. The distinctive designation of such series and the number of
shares which shall constitute such series;
B. The rate of dividends payable on shares of such series, the
conditions upon which such dividends shall be payable (including whether
they shall be payable in preference to, or in another relation to, the
dividends payable on any other class or classes or series of shares) and
the date from which dividends shall be cumulative in the event the board
of directors determines that dividends shall be cumulative;
C. Whether such series shall have conversion privileges and, if so,
the terms and conditions of such conversion, including, but not limited
to, provision for adjustment of the conversion rate upon such events and
in such manner as the board of directors shall determine;
D. Whether or not the shares of such series shall be redeemable
and, if so, the terms and conditions of such redemption, including the
date or dates upon or after which they shall be redeemable, and the
amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
E. Whether such series shall have a sinking fund for the redemption
or purchase of shares of that series and, if so, the terms and amounts
of such sinking fund;
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<PAGE> 3
F. The rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment in
respect of shares of that series; and
G. Any other relative rights, preferences and limitations of such
series which shall not be inconsistent with this ARTICLE FOURTH.
Subject to the provisions of any applicable law, the holders of
outstanding Class A Preferred Shares and the holders of outstanding Class B
Preferred Shares shall possess voting power for the election of directors
and for all other purposes, each holder of record of Class A Preferred
Shares being entitled to one vote for each Class A Preferred Share standing
in the name of such shareholder on the books of the Corporation and each
holder of record of Class B Preferred Shares being entitled to ten votes
for each Class B Preferred Share standing in the name of such shareholder
on the books of the Corporation.
III. Common Shares. The board of directors of the Corporation is
authorized, subject to limitations prescribed by law and the provisions of
this ARTICLE FOURTH, to provide for the issuance from time to time of any
number of authorized and unissued Common Shares, and shall determine the
terms under which and the consideration for which the Corporation shall
issue its Common Shares.
A. Subject to the provisions of any applicable law, at every
meeting of the shareholders, each holder of Common Shares shall be
entitled to one vote, in person or by proxy, for each Common Share
standing in the name of such shareholder on the books of the
Corporation, on each matter on which the Common Shares are entitled to
vote.
B. Subject to the rights of holders of the Preferred Shares, the
holders of the Common Shares shall be entitled to receive, when and as
declared by the board of directors, out of the assets of the Corporation
which are by law available therefor, dividends payable in cash, in
property, or in shares and the holders of the Preferred Shares shall not
be entitled to participate in any such dividends (unless otherwise
provided by the board of directors in any resolution providing for the
issue of a series of Class A Preferred Shares or of Class B Preferred
Shares).
C. In the event of any dissolution, liquidation or winding up of
the affairs of the Corporation, either voluntarily or involuntarily, the
holders of the Common Shares shall be entitled, after payment or
provision for payment in full of the debts and other liabilities of the
Corporation and the amounts to which the holders of the Preferred Shares
shall be entitled, to share ratably in the remaining assets of the
Corporation available for distribution to its shareholders to the
exclusion of the Preferred Shares (unless otherwise provided by the
board of directors in any resolution providing for the issue of a series
of Class A Preferred Shares or of Class B Preferred Shares). Neither the
merger or consolidation of the Corporation, nor the sale, lease or
conveyance of all or part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the affairs of the Corporation
within the meaning of this Subparagraph III(C).
IV. No Pre-emptive Rights. No holder of shares of this Corporation of
any class shall have, as such, as a matter of right, the pre-emptive right
to subscribe for or purchase any part of any new or additional issue of
shares of any class whatsoever, or of securities or other obligations
convertible into or exchangeable for any shares of any class whatsoever or
which by warrants or otherwise entitle the holders thereof to subscribe for
or purchase any shares of any class whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration or by way of
dividend.
FIFTH: The directors of the Corporation shall have the power to cause
the Corporation from time to time and at any time to purchase, hold, sell,
transfer or otherwise deal with (A) shares of any class or series issued by
it, (B) any security or other obligation of the
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Corporation which may confer upon the holder thereof the right to convert
the same into shares of any class or series authorized by the articles of
the Corporation, and (C) any security or other obligation which may confer
upon the holder thereof the right to purchase shares of any class or series
authorized by the articles of the Corporation. The Corporation shall have
the right to repurchase, if and when any shareholder desires to sell, or on
the happening of any event is required to sell, shares of any class or
series issued by the Corporation. The authority granted in this ARTICLE
FIFTH of these Amended Articles of Incorporation shall not limit the
plenary authority of the directors to purchase, hold, sell, transfer or
otherwise deal with shares of any class or series, securities or other
obligations issued by the Corporation or authorized by its articles.
SIXTH: All of the authority of the Corporation shall be exercised by
or under the direction of the board of directors except as otherwise
provided in these Amended Articles of Incorporation or the Regulations of
the Corporation or required by law. For the management of the business and
for the conduct of the affairs of the Corporation, and in further creation,
definition, limitation and regulation of the power of the Corporation and
of its directors and of its shareholders, it is further provided as
follows:
I. Elections of directors need not be by written ballot unless the
Regulations of the Corporation shall so provide.
II. Subject to the rights of the holders of any class or series of
shares of the Corporation having a preference over the Common Shares as to
dividends or upon liquidation to elect additional directors under specific
circumstances, the number of directors of the Corporation shall be fixed
from time to time by or in accordance with the provisions of the
Regulations of the Corporation. The directors, other than those who may be
elected by the holders of any class or series of shares of capital stock
having preference over the Common Shares as to dividends or upon
liquidation, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as shall be provided in the manner specified in the Regulations
of the Corporation, one class to hold office initially for a term expiring
at the annual meeting of shareholders to be held in 1999, another class to
hold office initially for a term expiring at the annual meeting of
shareholders to be held in 2000, and another class to hold office initially
for a term expiring at the annual meeting of shareholders to be held in
2001, with the members of each class to hold office until their successors
are duly elected and qualified. At each annual meeting of the shareholders
of the Corporation, the successors to the class of directors whose term
expires at that meeting shall be elected to hold office for a term expiring
at the annual meeting of shareholders held in the third year following the
year of their election.
III. Advance notice of nominations for the election of directors,
other than by the board of directors or a committee thereof, shall be given
in the manner provided in the Regulations of the Corporation.
IV. Subject to the rights of the holders of any class or series of
shares of capital stock of the Corporation having a preference over the
Common Shares as to dividends or upon liquidation to elect directors under
specified circumstances, newly created directorships resulting from any
increase in the number of directors and any vacancies on the board of
directors resulting from death, resignation, disqualification, removal or
other cause may be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the
board of directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class
of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified. No reduction in the number of directors constituting the board
of directors shall shorten the term of any incumbent director.
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V. Subject to the rights of the holders of any class or series of
shares of capital stock of the Corporation having a preference over the
Common Shares as to dividends or upon liquidation to elect directors under
specified circumstances, (i) any director, or the entire board of
directors, may be removed from office, with or without cause, but only by
the affirmative vote of the holders of record of outstanding shares
representing at least 75% of the votes entitled to be cast by the holders
of all then outstanding shares of Voting Stock (as defined in ARTICLE
SEVENTH hereof), voting together as a single class, and entitled to vote in
respect thereof, and (ii) any director may be removed from office, but only
for cause, by the affirmative vote of three-fourths (3/4) of the directors
then in office.
VI. Any action required or permitted to be taken by the shareholders
of the Corporation must be effected at a duly called annual or special
meeting of such shareholders and may not be effected by any consent in
writing by such shareholders.
SEVENTH: I. Capitalized terms used herein are defined in Paragraph IV
of this ARTICLE SEVENTH.
II. In addition to any affirmative vote required by law or under any
other provision of these Amended Articles of Incorporation or the
Regulations of the Corporation or otherwise, and except as otherwise
expressly provided in this Article SEVENTH:
A. any merger or consolidation of this Corporation or any
Subsidiary with or into (i) any Substantial Shareholder or (ii) any
other corporation (whether or not itself a Substantial Shareholder)
which, after such merger or consolidation, would be an Affiliate of a
Substantial Shareholder, or
B. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions) to
or with any Substantial Shareholder of any Substantial Part of the
assets of this Corporation or of any Subsidiary, or
C. the issuance or transfer by this Corporation or by any
Subsidiary (in one transaction or a series of related transactions) of
any Equity Securities of this Corporation or any Subsidiary to any
Substantial Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate fair market
value of $25,000,000 or more, or
D. the adoption of any plan or proposal for the liquidation or
dissolution of this Corporation if, as of the record date for the
determination of shareholders entitled to notice thereof and to vote
thereon, any person shall be a Substantial Shareholder, or
E. any reclassification of securities (including any reverse stock
split) or recapitalization of this Corporation, or any reorganization,
merger or consolidation of this Corporation with any of its Subsidiaries
or any similar transaction (whether or not with or into or otherwise
involving a Substantial Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
securities of any class of Equity Securities of this Corporation or any
Subsidiary which is directly or indirectly Beneficially Owned by any
Substantial Shareholder,
shall (except as otherwise expressly provided in these Amended Articles of
Incorporation) require the affirmative vote of the holders of not less than
75% of the votes entitled to be cast by all holders of all then outstanding
shares of Voting Stock; provided that such affirmative vote must include
the affirmative vote of the holders of shares of Voting Stock entitled to
cast a majority of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock not beneficially owned by the
Substantial Shareholder in question. Each such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that
some lesser percentage may be specified, by law or in any agreement with
The Nasdaq Stock Market or any national securities exchange or otherwise.
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III. The provisions of this ARTICLE SEVENTH shall not be applicable
to any Business Combination, the terms of which shall be approved, either
in advance of or subsequent to a Substantial Shareholder having become a
Substantial Shareholder, by three-fourths (3/4) of the Whole Board, but
only if a majority of the members of the board of directors in office and
acting upon such matter shall be Continuing Directors.
IV. For the purpose of this ARTICLE SEVENTH:
A. A "Person" shall mean any individual, firm, corporation or other
entity.
B. The term "Business Combination" as used in this ARTICLE SEVENTH
shall mean any transaction which is described in any one or more of
Subparagraphs (A) through (E) of Paragraph II of this ARTICLE SEVENTH.
C. "Substantial Shareholder" shall mean any Person who or which, as
of the record date for the determination of shareholders entitled to
notice of and to vote on any Business Combination, or immediately prior
to the consummation of any such Business Combination:
(1) is the Beneficial Owner, directly or indirectly, of more
than fifteen percent (15%) of the shares of Voting Stock (determined
solely on the basis of the total number of shares of Voting Stock so
Beneficially Owned (and without giving effect to the number or
percentage of votes entitled to be cast in respect of such shares) in
relation to the total number of shares of Voting Stock then issued
and outstanding), or
(2) is an Affiliate of this Corporation and at any time within
three years prior thereto was the Beneficial Owner, directly or
indirectly, of more than fifteen percent (15%) of the then
outstanding Voting Stock (determined as aforesaid), or
(3) is an assignee of or has otherwise succeeded to any shares
of this Corporation which were at any time within three years prior
thereto Beneficially Owned by any Substantial Shareholder, and 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, as amended.
Notwithstanding the foregoing, a Substantial Shareholder shall not
include (i) this Corporation or any Subsidiary, (ii) any profit-sharing,
employee stock ownership or other employee benefit plan of this Corporation
or any Subsidiary or any trustee of or fiduciary with respect to any such
plan when acting in such capacity, or (iii) Persons who, on August 3, 1998
are Affiliates of this Corporation owning in excess of ten percent (10%) of
the outstanding shares of Common Stock of its parent corporation,
Worthington Industries, Inc., a Delaware corporation, and the respective
successors, executors, legal representatives, heirs and legal assigns
(provided that any such legal assign is such an Affiliate immediately prior
to assignment, transfer or other disposition to such assign) of such
Person.
D. "Beneficial Ownership" shall be determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (or any successor rule or statutory provision)
or, if said Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to said Rule
13d-3 as in effect on August 3, 1998; provided, however, that a Person
shall, in any event, also be deemed to be the "Beneficial Owner" of any
shares of Voting Stock:
(1) which such Person or any of its Affiliates or Associates
beneficially own, directly or indirectly, or
(2) which such Person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of
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time), pursuant to any agreement, arrangement or understanding (but
shall not be deemed to be the beneficial owner of any shares of
Voting Stock solely by reason of an agreement, arrangement or
understanding with this Corporation to effect a Business Combination)
or upon the exercise of conversion rights, exchange rights, warrants,
or options, or otherwise, or (ii) sole or shared voting or investment
power with respect thereto pursuant to any agreement, arrangement,
understanding, relationship or otherwise (but shall not be deemed to
be the beneficial owner of any shares of Voting Stock solely by
reason of a revocable proxy granted for a particular meeting of
shareholders, pursuant to a public solicitation of proxies for such
meeting, with respect to shares of which neither such Person nor any
such Affiliate or Associate is otherwise deemed the beneficial
owner), or
(3) which are beneficially owned, directly or indirectly, by any
other Person with which such first mentioned Person or any of its
Affiliates or Associates acts as a partnership, limited partnership,
syndicate or other group pursuant to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of this Corporation; and
provided further, however, that (i) no director or officer of this
Corporation, nor any Associate or Affiliate of any such director or
officer, shall, solely by reason of any or all such directors and
officers acting in their capacities as such, be deemed, for any
purposes hereof, to beneficially own any shares of Voting Stock
beneficially owned by any other such director or officer (or any
Associate or Affiliate thereof), and (ii) no employee stock ownership
or similar plan of this Corporation or any Subsidiary nor any trustee
with respect thereto, nor any Associate or Affiliate of any such
trustee, shall, solely by reason of such capacity of such trustee, be
deemed for any purposes hereof, to beneficially own any shares of
Voting Stock held under any such plan.
E. For purposes of computing the percentage Beneficial Ownership of
shares of Voting Stock of a Person in order to determine whether such
Person is a Substantial Shareholder, the outstanding shares of Voting
Stock shall include shares deemed owned by such Person through
application of Subparagraph (D) of this Paragraph IV but shall not
include any other shares of Voting Stock which may be issuable by this
Corporation pursuant to any agreement, or upon the exercise of
conversion rights, warrants or options, or otherwise. For all other
purposes, the outstanding shares of Voting Stock shall include only
shares of Voting Stock then outstanding and shall not include any shares
of Voting Stock which may be issuable by this Corporation pursuant to
any agreement, or upon the exercise of conversion rights, warrants or
options, or otherwise.
F. "Continuing Director" shall mean a Person who was a member of
the board of directors of the Corporation as of the effective date of
the merger of Worthington Industries, Inc., a Delaware corporation, with
and into this Corporation, or thereafter elected by the shareholders or
appointed by the board of directors of this Corporation prior to the
date of which the Substantial Shareholder in question became a
Substantial Shareholder, or a Person designated (before his initial
election or appointment as a director) as a Continuing Director by
three-fourths (3/4) of the Whole Board, but only if a majority of the
Whole Board shall then consist of Continuing Directors.
G. "Whole Board" shall mean the total number of directors which
this Corporation would have if there were no vacancies.
H. An "Affiliate" of a specified Person is 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.
The term "Associate" used to indicate a relationship with any Person
shall mean (i) any corporation or organization (other than this
Corporation or a Subsidiary) of which such Person is an officer or
partner or is, directly or indirectly, the
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beneficial owner of ten percent (10%) or more of any class of Equity
Securities, (ii) 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 (iii) any relative or
spouse of such Person, or any relative of such spouse, who has the same
home as such Person, or is an officer or director of any corporation
controlling or controlled by such Person.
I. "Subsidiary" shall mean any corporation of which a majority of
any class of Equity Security is owned, directly or indirectly, by this
Corporation; provided, however, that for the purposes of the definition
of Substantial Shareholder set forth in Subparagraph (C) of this
Paragraph IV, the term "Subsidiary" shall mean only a corporation of
which a majority of each class of Equity Security is owned, directly or
indirectly, by this Corporation.
J. "Substantial Part" shall mean assets having a book value
(determined in accordance with generally accepted accounting principles)
in excess of ten percent (10%) of the book value (determined in
accordance with generally accepted accounting principles) of the total
consolidated assets of this Corporation, at the end of its most recent
fiscal year ending prior to the time the determination is made.
K. "Voting Stock" shall mean any shares of capital stock of this
Corporation entitled to vote generally in the election of directors.
L. "Equity Security" shall have the meaning given to such term
under Rule 3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, as in effect on August 3,
1998.
V. A majority of the Continuing Directors then in office shall have
the power to determine for the purposes of this ARTICLE SEVENTH, on the
basis of information known to them (i) the number of shares of Voting Stock
Beneficially Owned by any Person, (ii) whether a Person is an Affiliate or
Associate of another, (iii) whether the assets subject to any Business
Combination constitute a Substantial Part of the assets of the corporation
in question, and/or (iv) any other factual matter relating to the
applicability or effect of this ARTICLE SEVENTH.
VI. A majority of the Continuing Directors then in office shall have
the right to demand that any Person who is reasonably believed to be a
Substantial Shareholder (or holder of record shares of Voting Stock
Beneficially Owned by any Substantial Shareholder) supply this Corporation
with complete information as to (i) the record owner(s) of all shares
Beneficially Owned by such Person who is reasonably believed to be a
Substantial Shareholder, (ii) the number of, and class or series of, shares
Beneficially Owned by such Person who it is reasonably believed is a
Substantial Shareholder and held of record by each such record owner and
the number(s) of the share certificate(s) evidencing such shares, and (iii)
any other factual matter relating to the applicability or effect of this
ARTICLE SEVENTH, as may be reasonably requested of such Person, and such
Person shall furnish such information within 10 days after receipt of such
demand.
VII. Any determinations made by the board of directors, or by the
Continuing Directors, as the case may be, pursuant to this ARTICLE SEVENTH
in good faith and on the basis of such information and assistance as was
then reasonably available for such purpose shall be conclusive and binding
upon this Corporation and its shareholders, including any Substantial
Shareholder.
VIII. Nothing contained in this ARTICLE SEVENTH shall be construed to
relieve any Substantial Shareholder from any fiduciary obligation imposed
by law.
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EIGHTH: The board of directors of the Corporation, when evaluating any
offer of another party to (1) make a tender or exchange offer for any
Equity Security of the Corporation, (2) merge or consolidate the
Corporation with another corporation, or (3) purchase or otherwise acquire
all or substantially all of the properties and assets of the Corporation,
shall in connection with the exercise of its judgment in determining what
is in the best interests of the Corporation and its shareholders, give due
consideration to all relevant factors, including without limitation the
social and economic effects on the employees, customers, suppliers and
other constituents of the Corporation and its subsidiaries and on the
communities in which the Corporation and its subsidiaries operate or are
located and any other factors which the board of directors may consider
under Ohio law.
NINTH: I. Notwithstanding any other provisions of these Articles of
Incorporation or the Regulations of the Corporation (and notwithstanding
the fact that a lesser percentage may be specified by law or in any
agreement with The Nasdaq Stock Market or any national securities exchange
or in any other provision of these Amended Articles of Incorporation or the
Regulations of the Corporation), the affirmative vote of the holders of at
least 75% of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock (as that term is defined in ARTICLE
SEVENTH hereof), shall be required to amend, alter, change or repeal, or
adopt any provisions inconsistent with, ARTICLE SIXTH, EIGHTH, NINTH or
TENTH of these Amended Articles of Incorporation, and the affirmative vote
of the holders of at least 75% of the votes entitled to be cast by the
holders of all then outstanding shares of Voting Stock, including the
holders of at least a majority of the votes entitled to be cast by the
holders of all then outstanding shares of Voting Stock of the Corporation
not beneficially owned by a Substantial Shareholder (as that term is
defined in ARTICLE SEVENTH), shall be required to amend, alter, change or
repeal, or adopt any provision inconsistent with, ARTICLE SEVENTH of these
Amended Articles of Incorporation.
II. Except as otherwise provided in these Amended Articles of
Incorporation, including without limitation Paragraph I of this ARTICLE
NINTH, the shareholders of the Corporation may, by the affirmative vote of
the holders of at least a majority of the votes entitled to be cast by the
holders of all then outstanding shares of the Voting Stock, amend, alter,
change or repeal any provision contained in these Amended Articles of
Incorporation.
TENTH: Notwithstanding any other provisions of these Amended Articles
of Incorporation or the Regulations of the Corporation (and notwithstanding
the fact that a lesser percentage may be specified by law or in any
agreement with The Nasdaq Stock Market or any national securities exchange
or any other provision of these Amended Articles of Incorporation or the
Regulations of the Corporation), the affirmative vote of the holders of at
least 75% of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock (as that term is defined in ARTICLE
SEVENTH hereof), shall be required to amend, alter, change or repeal, or
adopt any provisions inconsistent with, the Regulations of the Corporation;
provided, however, that if such amendment, alteration, change or repeal has
been approved by three-fourths (3/4) of the Whole Board (as defined in
ARTICLE SEVENTH hereof), the shareholders may, by the affirmative vote of
the holders of at least a majority of the votes entitled to be cast by the
holders of all then outstanding shares of Voting Stock, approve such
amendment, alteration, change or repeal. Any amendment to these Amended
Articles of Incorporation which shall contravene the Regulations in
existence on the record date of the meeting of shareholders at which such
amendment is to be voted upon by the shareholders, shall require the
affirmative vote of the holders of at least 75% of the votes entitled to be
cast by the holders of all then outstanding shares of Voting Stock;
provided, however, that if such amendment has been approved by
three-fourths (3/4) of the Whole Board, the shareholders may approve such
amendment to these Amended Articles of Incorporation by the affirmative
vote of the holders of at least a majority of the votes entitled to be cast
by the holders of all then outstanding shares of Voting Stock.
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ELEVENTH: Chapter 1704 of the Ohio Revised Code shall not apply to the
Corporation.
TWELFTH: Notwithstanding any provision of the Ohio Revised Code
requiring for any purpose the vote, consent, waiver or release of the
holders of shares of the Corporation entitling them to exercise two-thirds
or any other proportion of the voting power of the Corporation or of any
class or classes of shares thereof, such action may be taken by the vote,
consent, waiver or release of the holders of shares entitling them to
exercise not less than a majority of the voting power of the Corporation or
of such class or classes, unless expressly provided otherwise by statute or
in these Amended Articles of Incorporation.
THIRTEENTH: Shareholders of the Corporation shall not have the right
to vote cumulatively in the election of directors.
FOURTEENTH: These Amended Articles of Incorporation take the place of
and supersede the existing Articles of Incorporation.
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Exhibit 3b
REGULATIONS
OF
WORTHINGTON INDUSTRIES, INC.
<PAGE> 2
CODE OF REGULATIONS
OF
WORTHINGTON INDUSTRIES, INC.
ARTICLE ONE
MEETINGS OF SHAREHOLDERS
Section 1.01. ANNUAL MEETINGS. The annual meeting of the shareholders for
the election of directors, for the consideration of reports to be laid before
such meeting and for the transaction of such other business as may properly come
before such meeting, shall be held on such date, at such time and at such place
as may be fixed from time to time by the directors.
Section 1.02. CALLING OF MEETINGS. Meetings of the shareholders may be
called only by the chairman of the board, the president, or, in case of the
president's absence, death or disability, the vice president authorized to
exercise the authority of the president; the secretary; the directors by action
at a meeting, or a majority of the directors acting without a meeting; or the
holders of at least fifty percent (50%) of all shares outstanding and entitled
to vote thereat.
Section 1.03. PLACE OF MEETINGS. Meetings of shareholders shall be held at
such place as the person or persons calling the meetings shall decide, unless
the board of directors decides that a meeting shall be held at some other place
and causes the notice thereof to so state.
Section 1.04. NOTICE OF MEETINGS. (A) Written notice stating the time,
place and purposes of a meeting of the shareholders shall be given either by
personal delivery or by mail not less than seven nor more than sixty days before
the date of the meeting, (1) to each shareholder of record entitled to vote at
the meeting, (2) by or at the direction of the president or the secretary. If
mailed, such notice shall be addressed to the shareholder at his address as it
appears on the records of the Corporation. Notice of adjournment of a meeting
need not be given if the time and place to which it is adjourned are fixed and
announced at such meeting. In the event of a transfer of shares after the record
date for determining the shareholders who are entitled to receive notice of a
meeting of shareholders, it shall not be necessary to give notice to the
transferee. Nothing herein contained shall prevent the setting of a record date
in the manner provided by law, the Articles or the Regulations for the
determination of shareholders who are entitled to receive notice of or to vote
at any meeting of shareholders or for any purpose required or permitted by law.
(B) Following receipt by the president or the secretary of a request in
writing, specifying the purpose or purposes for which the persons properly
making such request have called a meeting of the shareholders, delivered either
in person or by registered mail to such officer by any persons entitled to call
a meeting of shareholders, such officer shall cause to be given to the
shareholders entitled thereto notice of a meeting to be held on a date not less
than seven nor more than sixty days after the receipt of such request, as such
officer may fix. If such notice is not given within fifteen days after the
receipt of such request by the president or the secretary, then, and only then,
the persons properly calling the meeting may fix the time of meeting and give
notice thereof in accordance with the provisions of the Regulations.
Section 1.05. WAIVER OF NOTICE. Notice of the time, place and purpose or
purposes of any meeting of shareholders may be waived in writing, either before
or after the holding of such meeting, by any shareholder, which writing shall be
filed with or entered upon the records of such meeting. The attendance of any
shareholder, in person or by proxy, at any such meeting without protesting the
lack of proper notice, prior to or at the commencement of the meeting, shall be
deemed to be a waiver by such shareholder of notice of such meeting.
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Section 1.06. QUORUM. A meeting of the shareholders duly called shall not
be organized for the transaction of business unless a quorum is present. Except
as otherwise expressly provided by law, the Articles or the Regulations, (A) at
any meeting called by the board of directors, the presence in person or by proxy
of holders of record of voting shares entitling them to exercise at least
one-third of the voting power of the Corporation shall constitute a quorum for
such meeting and (B) at any meeting called other than by the Board of Directors,
the presence in person or proxy of holders of record of voting shares of the
Corporation entitling them to exercise at least a majority of the voting power
of the Corporation shall constitute a quorum for such meeting. The shareholders
present at a duly organized meeting can continue to do business until
adjournment, notwithstanding the withdrawal of enough shareholders to leave less
than a quorum. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, or the chairman of the board, the
president, or the officer of the Corporation acting as chairman of the meeting,
may adjourn such meeting from time to time to such time (not more than 30 days
after the previously adjourned meeting) and place as they (or he) may determine,
without notice other than by announcement at the meeting of the time and place
of the adjourned meeting, and if a quorum is present at such adjourned meeting,
any business may be transacted as if the meeting had been held as originally
called.
Section 1.07. VOTES REQUIRED. At all elections of directors, the candidates
receiving the greatest number of votes shall be elected. Except as otherwise
required by law, the Articles or the Regulations, any other matter submitted to
the shareholders for their vote shall be decided by the vote of the holders of a
majority of the votes entitled to be cast by the holders of all then outstanding
voting shares, present in person or by proxy, and entitled to vote with respect
to such matter provided a quorum is present.
Section 1.08. NOTICE AND ORDER OF BUSINESS; PROCEDURE. (A) At any meeting
of the shareholders, only such business shall be conducted as shall have been
brought before the meeting (1) by or at the direction of the board of directors
or (2) by any shareholder of the Corporation who is a shareholder of record at
the time of giving of the notice provided for in this Subsection 1.08(A), who
shall be entitled to vote at such meeting and who complies with the notice
procedures set forth in this Subsection 1.08(A). For business to be properly
brought before a shareholder meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the secretary of the Corporation. To
be timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than 30 days prior
to the meeting; provided, however, that in the event that less than 40 days'
notice or prior public disclosure of the date of the meeting is given or made to
shareholders, notice by the shareholder to be timely must be received no later
than the close of business on the tenth day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was made.
A shareholder's notice to the secretary shall set forth as to each matter the
shareholder proposes to bring before the meeting (1) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (2) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (3) the class
and number of shares of the Corporation which are beneficially owned by the
shareholder and (4) any material interest of the shareholder in such business.
Notwithstanding anything in the Regulations to the contrary, no business shall
be conducted at a shareholder meeting except in accordance with the procedures
set forth in this Subsection 1.08(A). The chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of the
Regulations, and if he shall so determine, he shall so declare to the meeting
and any business not properly brought before the meeting shall not be
transacted. Notwithstanding the foregoing provisions of this Subsection 1.08(A),
a shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, and the rules and regulations thereunder, with
respect to the matters set forth in this Subsection 1.08(A).
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(B) The order of business at any meeting of shareholders and all matters
relating to the manner of conducting the meeting shall be determined by the
officer of the Corporation acting as chairman of such meeting unless otherwise
determined by a vote of the holders of a majority of the voting shares of the
Corporation then outstanding, present in person or by proxy, and entitled to
vote at such meeting. Meetings shall be conducted in a manner designed to
accomplish the business of the meeting in a prompt and orderly fashion and to be
fair and equitable to all shareholders, but it shall not be necessary to follow
any manual of parliamentary procedure.
Section 1.09. SHAREHOLDERS ENTITLED TO VOTE. Each shareholder of record on
the books of the Corporation on the record date for determining the shareholders
who are entitled to vote at a meeting of shareholders shall be entitled at such
meeting to vote each share of the Corporation standing in his name on the books
of the Corporation on such record date. The directors may fix a record date for
the determination of the shareholders who are entitled to receive notice of and
to vote at a meeting of shareholders, which record date shall not be a date
earlier than the date on which the record date is fixed and which record date
may be a maximum of sixty days preceding the date of the meeting of
shareholders. The record date for the purpose of determining the shareholders
who are entitled to receive notice of and vote at a meeting of the shareholders
shall continue to be the record date for all adjournments of such meeting,
unless the directors or the persons who fixed the original record date fix
another date. Anything contained in these Regulations or elsewhere to the
contrary, unless otherwise authorized by law, the Corporation may not directly
or indirectly vote any shares issued by it and such shares shall not be
considered as outstanding for the purpose of computing the voting power of the
Corporation or of shares of any class.
Section 1.10. PROXIES. At meetings of the shareholders, any shareholder of
record entitled to vote thereat may be represented and may vote by a proxy or
proxies appointed by an instrument in writing signed by such shareholder, but
such instrument shall be filed with the secretary of the meeting before the
person holding such proxy shall be allowed to vote thereunder. No proxy shall be
valid after the expiration of eleven months after the date of its execution,
unless the shareholder executing it shall have specified therein the length of
time it is to continue in force.
Section 1.11. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the directors may appoint inspectors of election to act at such
meeting or any adjournment thereof; if inspectors are not so appointed, the
officer of the Corporation acting as chairman of any such meeting may make such
appointment. In case any person appointed as inspector fails to appear or act,
the vacancy may be filled only by appointment made by the directors in advance
of such meeting or, if not so filled, at the meeting by the officer of the
Corporation acting as chairman of such meeting. No other person or persons may
appoint or require the appointment of inspectors of election.
Section 1.12. ORGANIZATION. At each meeting of the shareholders, the
chairman of the board, or in the absence of the chairman of the board, the
president, or, in the absence of the president, any vice president or, in the
absence of the chairman, the president or a vice president, a chairman chosen by
a majority of the voting shares of the Corporation then outstanding, present in
person or by proxy, and entitled to vote at such meeting, shall act as chairman
of the meeting, and the secretary of the Corporation, or, if the secretary of
the Corporation shall not be present, the assistant secretary, or if the
secretary and the assistant secretary shall not be present, a person whom the
chairman of the meeting shall appoint, shall act as secretary of the meeting.
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ARTICLE TWO
DIRECTORS
Section 2.01. AUTHORITY AND QUALIFICATIONS. Except where the law, the
Articles or the Regulations otherwise provide, all authority of the Corporation
shall be vested in and exercised by its directors. Directors need not be
shareholders of the Corporation.
Section 2.02. NUMBER OF DIRECTORS AND TERM OF OFFICE.
(A) The number of directors of the Corporation may be determined at a
meeting of the shareholders called for the purpose of electing directors at
which a quorum is present, by the affirmative vote of the holders of shares
entitling them to exercise not less than 75% of the voting power of the
Corporation on such proposal; or by resolution adopted by the affirmative vote
of a majority of the Whole Board of Directors. As used in the Regulations, the
term "Whole Board of Directors" shall mean the total number of directors which
the Corporation would have if there were no vacancies. Notwithstanding the
foregoing, the number of directors shall in no event be fewer than three or more
than eighteen.
(B) The board of directors shall be divided into three classes as nearly
equal in number as the then fixed number of directors permits, with the term of
office of one class expiring each year. The election of each class of directors
shall be a separate election. At the first meeting of shareholders, directors of
one class shall be elected to hold office for a term expiring at the 1999 annual
meeting, directors of another class shall be elected to hold office for a term
expiring at the 2000 annual meeting and directors of another class shall be
elected to hold office for a term expiring at the 2001 annual meeting. At the
1999 annual meeting of shareholders and each succeeding annual meeting,
successors to the class of directors whose term then expires shall be elected to
hold office for a three-year term. A director shall hold office until the annual
meeting for the year in which his term expires and until his successor is duly
elected and qualified, or until his earlier resignation, removal from office or
death. In the event of any increase in the number of directors of the
Corporation, the additional directors shall be similarly classified in such a
manner that each class of directors shall be as equal in number as possible. In
the event of any decrease in the number of directors of the Corporation, such
decrease shall be effected in such a manner that each class of directors shall
be as equal in number as possible.
(C) The directors may fix or change the number of directors and may fill
any director's office that is created by an increase in the number of directors.
(D) No reduction in the number of directors shall of itself have the effect
of shortening the term of any incumbent director.
Section 2.03. NOMINATION AND ELECTION.
(A) Only persons who are nominated in accordance with the procedures set
forth in the Regulations shall be eligible to serve as directors of the
Corporation. Nominations of persons for election to the board of directors of
the Corporation may be made at a meeting of shareholders (1) by or at the
direction of the board of directors (or a committee thereof) or (2) by any
shareholder of the Corporation who is a shareholder of record at the time of
giving of notice provided for in this Subsection 2.03(A), who shall be entitled
to vote for the election of directors at the meeting and who complies with the
notice procedures set forth in this Section 2.03(A). Such nominations, other
than those made by or at the direction of the board of directors (or a committee
thereof), shall be made pursuant to timely notice in writing to the secretary of
the Corporation. To be timely, a shareholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than 14 days nor more than 50 days prior to the meeting; provided, however,
that if less than 21 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to be timely
must be so received not later than the close of business on the seventh day
following the day on
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which such notice of the date of the meeting or such public disclosure was made.
Such shareholder's nomination shall set forth (1) as to each person whom the
shareholder proposes to nominate for election or re-election as a director, (i)
the name, age, business address and, if known, residence address of the proposed
nominee; (ii) the principal occupation or employment of the proposed nominee;
(iii) the number of shares of the Corporation which are beneficially owned by
the proposed nominee; and (iv) any other information relating to the proposed
nominee that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934 or any successor rule
or regulation (including such person's written consent to be named in the proxy
statement as a nominee and to serving as a director if elected); and (2) as to
the shareholder giving the notice (a) the name and address, as they appear on
the Corporation's books, of such shareholder and (b) the class and number of
shares of the Corporation which are beneficially owned by such shareholder. At
the request of the board of directors, any person nominated by the board of
directors for election as a director shall furnish to the secretary of the
Corporation that information required to be set forth in a shareholder's notice
of nomination which pertains to the nominee. No person shall be eligible to
serve as a director of the Corporation unless nominated in accordance with the
procedures set forth in the Regulations. The chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that a nomination was
not made in accordance with the procedures prescribed by the Regulations, and if
he shall so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded. Notwithstanding the foregoing provisions of
this Subsection 2.03(A), a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, and the rules and
regulations thereunder, with respect to the matters set forth in this Subsection
2.03(A).
(B) The election of directors shall be by ballot whenever requested by the
presiding officer of the meeting or by the holders of a majority of the voting
shares outstanding, entitled to vote at such meeting and present in person or by
proxy, but unless such request is made, the election shall be viva voce.
Section 2.04. RESIGNATION. Any director of the Corporation may resign at
any time by giving written notice to the chairman of the board, the president or
the secretary of the Corporation. Such resignation shall take effect at the time
specified therein, and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 2.05. REMOVAL. A director or directors may be removed from office
only in accordance with the provisions of the Articles. In case of any such
removal, a new director may be elected at the same meeting for the unexpired
term of each director removed. Failure to elect a director to fill the unexpired
term of any director removed shall be deemed to create a vacancy in the board.
Section 2.06. VACANCIES. The remaining directors, though less than a
majority of the Whole Board of Directors, may, by the vote of a majority of
their number, fill any vacancy in the board of directors for the unexpired term.
A vacancy in the board of directors exists within the meaning of this Section
2.05 in case the shareholders increase the authorized number of directors but
fail at the meeting at which such increase is authorized, or an adjournment
thereof, to elect the additional directors provided for, or in case the
shareholders fail at any time to elect the whole authorized number of directors.
Section 2.07. MEETINGS. Regular meetings of the board of directors may be
held at such intervals and at such time and place as shall from time to time be
determined by the board of directors. After such determination and notice
thereof has been once given to each person then a member of the board of
directors, regular meetings may be held at such intervals and time and place
without further notice being given. The directors shall hold such special
meetings as may from time to time be called, and such special meetings of
directors may be called only by the
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chairman of the board, the president or a majority of directors then in office.
All meetings of directors shall be held at the principal office of the
Corporation in the State of Ohio or at such other place within or without the
State of Ohio, as the directors may from time to time determine by a resolution.
Meetings of the directors may be held through any communications equipment if
all persons participating can hear each other and participation in a meeting
pursuant to this provision shall constitute presence at such meeting.
SECTION 2.08. NOTICE OF MEETINGS. Notice of the time and place of each
meeting of directors for which such notice is required by law, the Articles, the
Regulations or the By-Laws shall be given to each of the directors by at least
one of the following methods:
(A) In a writing mailed not less than three days before such meeting
and addressed to the residence or usual place of business of a director, as
such address appears on the records of the Corporation; or
(B) By telegraph, cable, radio, wireless, facsimilie transmission,
overnight delivery or a writing sent or delivered to the residence or usual
place of business of a director as the same appears on the records of the
Corporation, not later than the day before the date on which such meeting
is to be held; or
(C) Personally, by electronic mail or by telephone not later than the
day before the date on which such meeting is to be held.
Notice given to a director by any one of the methods specified in the
Regulations shall be sufficient, and the method of giving notice to all
directors need not be uniform. Notice of any meeting of directors may be given
only by the chairman of the board, the president or the secretary of the
Corporation. Any such notice need not specify the purpose or purposes of the
meeting. Notice of adjournment of a meeting of directors need not be given if
the time and place to which it is adjourned are fixed and announced at such
meeting.
SECTION 2.09. WAIVER OF NOTICE. Notice of any meeting of directors may be
waived in writing, either before or after the holding of such meeting, by any
director, which writing shall be filed with or entered upon the records of the
meeting. The attendance of any director at any meeting of directors without
protesting, prior to or at the commencement of the meeting, the lack of proper
notice, shall be deemed to be a waiver by him of notice of such meeting.
SECTION 2.10. QUORUM. A majority of the directors then in office shall be
necessary to constitute a quorum for a meeting of directors. The act of a
majority of the directors present at a meeting at which a quorum is present is
the act of the board, except as otherwise provided by law, the Articles or the
Regulations. At all meetings of the board of directors, each director shall have
one vote.
SECTION 2.11. EXECUTIVE COMMITTEE. The directors may create an executive
committee or any other committee of directors, to consist of not less than three
directors, and may authorize the delegation to such executive committee or other
committees of any of the authority of the directors, however conferred, other
than that of filling vacancies among the directors or in the executive committee
or in any other committee of the directors.
Such executive committee or any other committee of directors shall serve at
the pleasure of the directors, shall act only in the intervals between meetings
of the directors, and shall be subject to the control and direction of the
directors. Such executive committee or other committee of directors may act by a
majority of its members at a meeting or by a writing or writings signed by all
of its members.
Any act or authorization of any act by the executive committee or any other
committee within the authority delegated to it shall be as effective for all
purposes as the act or authorization of the directors. No notice of a meeting of
the executive committee or of any other committee of
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directors shall be required. A meeting of the executive committee or of any
other committee of directors may be called only by the chairman of the board,
the president or by a member of such executive or other committee of directors.
Meetings of the executive committee or of any other committee of directors may
be held through any communications equipment if all persons participating can
hear each other and participation in such a meeting shall constitute presence
thereat.
SECTION 2.12. COMPENSATION. Directors shall be entitled to receive as
compensation for services rendered and expenses incurred as directors, such
amounts as the directors, by the affirmative vote of a majority of those in
office, may determine.
SECTION 2.13. BY-LAWS. The directors may adopt, and amend from time to
time, By-Laws for their own government, which By-Laws shall not be inconsistent
with the law, the Articles or the Regulations.
SECTION 2.14. ACTION BY DIRECTORS WITHOUT A MEETING. Anything contained in
the Regulations to the contrary notwithstanding, any action which may be
authorized or taken at a meeting of the directors or of a committee of the
directors, as the case may be, may be authorized or taken without a meeting with
the affirmative vote or approval of, and in a writing or writings signed by, all
the directors, or all the members of such committee of the directors,
respectively, which writings shall be filed with or entered upon the records of
the Corporation.
ARTICLE THREE
OFFICERS
SECTION 3.01. OFFICERS. The officers of the Corporation to be elected by
the directors shall be a chairman of the board (who shall be a director), a
president, a secretary, a treasurer and, if desired, one or more vice presidents
and such other officers and assistant officers as the directors may from time to
time elect. Officers need not be shareholders of the Corporation, and may be
paid such compensation as the board of directors may determine. Any two or more
offices (other than the offices of president and vice president) may be held by
the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity if such instrument is required by law, the
Articles, the Regulations or the By-Laws to be executed, acknowledged or
verified by two or more officers.
SECTION 3.02. TENURE OF OFFICE. The officers of the Corporation shall hold
office at the pleasure of the directors. Any officer of the Corporation may be
removed, either with or without cause, at any time, by the affirmative vote of a
majority of all the directors then in office; such removal, however, shall be
without prejudice to the contract rights, if any, of the person so removed.
SECTION 3.03. DUTIES OF THE CHAIRMAN OF THE BOARD. The chairman of the
board, if there be one, shall preside at all meetings of the shareholders and of
the board of directors. He shall be the chief executive officer of the
Corporation, and except where by law the signature of the president is required,
the chairman of the board shall possess the same power as the president to sign
all contracts, certificates and other instruments of the Corporation which may
be authorized by the board of directors. During the absence or disability of the
president, the chairman of the board shall exercise all the powers and discharge
all the duties of the president. The chairman of the board shall also perform
such duties and may exercise such other powers as from time to time may be
assigned to him by the Regulations or by the board of directors.
SECTION 3.04. DUTIES OF THE PRESIDENT. The president shall, subject to the
control of the board of directors, and, if there be one, the chairman of the
board, have general supervision of the
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business of the Corporation and shall see that all orders and resolutions of the
board of directors are carried in to effect. He shall execute all bonds,
mortgages, contracts and other instruments of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and execute documents when so
authorized by the Resolutions, the board of directors, the chairman or the
president. In the absence or disability of the chairman of the board, or if
there be none, the president shall preside at all meetings of the shareholders
and the board of directors. If there be no chairman of the board, the president
shall be the chief executive officer of the Corporation. The president shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by the Regulations or by the board of directors.
SECTION 3.05. DUTIES OF THE VICE PRESIDENTS. The vice presidents shall
perform such duties as are conferred upon them by the Regulations or as may from
time to time be assigned to them by the board of directors, the chairman of the
board or the president. At the request of the chairman of the board, in the
absence or disability of the president, the vice president designated by the
board of directors shall perform all the duties of the president, and when so
acting, shall have all the powers of the president. The authority of the vice
president to sign in the name of the Corporation all certificates for shares and
authorize deeds, mortgages, leases, bonds, contracts, notes and other
instruments, shall be coordinated with like authority of the president.
SECTION 3.06. DUTIES OF THE SECRETARY. It shall be the duty of the
secretary, or of an assistant secretary, if any, in case of the absence or
inability to act of the secretary, to keep minutes of all the proceedings of the
shareholders and the directors and to make a proper record of the same; to
perform such other duties as may be required by law, the Articles or the
Regulations; to perform such other and further duties as may from time to time
be assigned to him by the directors; and to deliver all books, paper and
property of the Corporation in his possession to his successor, or to the
chairman of the board or the president.
SECTION 3.07. DUTIES OF THE TREASURER. The treasurer, or an assistant
treasurer, if any, in case of the absence or inability to act of the treasurer,
shall receive and safely keep in charge all money, bills, notes, choses in
action, securities and similar property belonging to the Corporation, and shall
do with or disburse the same as directed by the chairman of the board, the
president or the directors; shall keep an accurate account of the finances and
business of the Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, stated capital and shares, together with
such other accounts as may be required and hold the same open for inspection and
examination by the directors; shall give bond in such sum with such security as
the directors may require for the faithful performance of his duties; shall,
upon the expiration of his term of office, deliver all money and other property
of the Corporation in his possession or custody to his successor or to the
chairman of the board or the president; and shall perform such other duties as
from time to time may be assigned to him by the directors.
ARTICLE FOUR
SHARES
SECTION 4.01. CERTIFICATES. Certificates evidencing ownership of shares of
the Corporation shall be issued to those entitled to them. Each certificate
evidencing shares of the Corporation shall bear a distinguishing number; the
signatures of the chairman of the board, the president or a vice president, and
of the secretary or an assistant secretary, or the treasurer or an assistant
treasurer (except that when any such certificate is countersigned by an
incorporated transfer agent or registrar, such signatures may be facsimile,
engraved, stamped or printed); and such recitals as may be required by law.
Certificates evidencing shares of the Corporation shall be of such tenor and
design as the directors may from time to time adopt and may bear such recitals
as are permitted by law.
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SECTION 4.02. TRANSFERS. Where a certificate evidencing a share or shares
of the Corporation is presented to the Corporation or its proper agents with a
request to register transfer, the transfer shall be registered as requested if:
(1) An appropriate person signs on each certificate so presented or
signs on a separate document an assignment or transfer of shares evidenced
by each such certificate, or signs a power to assign or transfer such
shares, or when the signature of an appropriate person is written without
more on the back of each such certificate; and
(2) Reasonable assurance is given that the endorsement of each
appropriate person is genuine and effective; the Corporation or its agents
may refuse to register a transfer of shares unless the signature of each
appropriate person is guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934 or any
successor rule or regulation; and
(3) All applicable laws relating to the collection of transfer or
other taxes have been complied with; and
(4) The Corporation or its agents are not otherwise required or
permitted to refuse to register such transfer.
SECTION 4.03. TRANSFER AGENTS AND REGISTRARS. The directors may appoint one
or more agents to transfer or to register shares of the Corporation, or both.
SECTION 4.04. LOST, WRONGFULLY TAKEN OR DESTROYED CERTIFICATES. Except as
otherwise provided by law, where the owner of a certificate evidencing shares of
the Corporation claims that such certificate has been lost, destroyed or
wrongfully taken, the directors must cause the Corporation to issue a new
certificate in place of the original certificate if the owner:
(1) So requests before the Corporation has notice that such original
certificate has been acquired by a bona fide purchaser; and
(2) Files with the Corporation, unless waived by the directors, an
indemnity bond, with surety or sureties satisfactory to the Corporation, in
such sums as the directors may, in their discretion, deem reasonably
sufficient as indemnity against any loss or liability that the Corporation
may incur by reason of the issuance of each such new certificate; and
(3) Satisfies any other reasonable requirements which may be imposed
by the directors, in their discretion.
ARTICLE FIVE
INDEMNIFICATION AND INSURANCE
SECTION 5.01. INDEMNIFICATION. The Corporation shall indemnify any officer
or director of the Corporation who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including, without
limitation, any action threatened or instituted by or in the right of the
Corporation), by reason of the fact that he is or was a director, officer,
employee, agent or volunteer of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, officer, employee, member,
manager, agent or volunteer of another corporation (domestic or foreign,
nonprofit or for profit), limited liability company, partnership, joint venture,
trust or other enterprise, against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and transcript costs),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if his act or omission
giving rise to any claim for indemnification under this Section 5.01 was not
occasioned by his intent to cause injury to the Corporation or by his reckless
disregard for the best interests of
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the Corporation, and in respect of any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful. It shall be presumed that
no act or omission of a person claiming indemnification under this Section 5.01
that gives rise to such claim was occasioned by an intent to cause injury to the
Corporation or by a reckless disregard for the best interests of the Corporation
and, in respect of any criminal matter, that such person had no reasonable cause
to believe his conduct was unlawful; the presumption recited in this Section
5.01 can be rebutted only by clear and convincing evidence, and the termination
of any action, suit or proceeding by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, rebut
such presumption.
SECTION 5.02. COURT-APPROVED INDEMNIFICATION. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding:
(A) the Corporation shall not indemnify any officer or director of the
Corporation who was a party to any completed action or suit instituted by
or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, agent
or volunteer of the Corporation, or is or was serving at the request of the
Corporation as a director, trustee, officer, employee, member, manager,
agent or volunteer of another corporation (domestic or foreign, nonprofit
or for profit), limited liability company, partnership, joint venture,
trust or other enterprise, in respect of any claim, issue or matter
asserted in such action or suit as to which he shall have been adjudged to
be liable for an act or omission occasioned by his deliberate intent to
cause injury to the Corporation or by his reckless disregard for the best
interests of the Corporation, unless and only to the extent that the Court
of Common Pleas of Franklin County, Ohio or the court in which such action
or suit was brought shall determine upon application that, despite such
adjudication of liability, and in view of all the circumstances of the
case, he is fairly and reasonably entitled to such indemnity as such Court
of Common Pleas or such other court shall deem proper; and
(B) the Corporation shall promptly make any such unpaid
indemnification as is determined by a court to be proper as contemplated by
this Section 5.02.
SECTION 5.03. INDEMNIFICATION FOR EXPENSES. Anything contained in the
Regulations or elsewhere to the contrary notwithstanding, to the extent that an
officer or director of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Section
5.01, or in defense of any claim, issue or matter therein, he shall be promptly
indemnified by the Corporation against expenses (including, without limitation,
attorneys' fees, filing fees, court reporters' fees and transcript costs)
actually and reasonably incurred by him in connection therewith.
SECTION 5.04. DETERMINATION REQUIRED. Any indemnification required under
Section 5.01 and not precluded under Section 5.02 shall be made by the
Corporation only upon a determination that such indemnification is proper in the
circumstances because the officer or director has met the applicable standard of
conduct set forth in Section 5.01. Such determination may be made only (A) by a
majority vote of a quorum consisting of directors of the Corporation who were
not and are not parties to, or threatened with, any such action, suit or
proceeding, or (B) if such a quorum is not obtainable or if a majority of a
quorum of disinterested directors so directs, in a written opinion by
independent legal counsel other than an attorney, or a firm having associated
with it an attorney, who has been retained by or who has performed services for
the Corporation, or any person to be indemnified, within the past five years, or
(C) by the shareholders, or (D) by the Court of Common Pleas of Franklin County,
Ohio or (if the Corporation is a party thereto) the court in which such action,
suit or proceeding was brought, if any; any such determination may be made by a
court under division (D) of this Section 5.04 at any time [including, without
limitation, any time before, during or after the time when any such
determination may be requested of, be under consideration by or have been denied
or disregarded by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the
11
<PAGE> 12
shareholders under division (C) of this Section 5.04]; and no failure for any
reason to make any such determination, and no decision for any reason to deny
any such determination, by the disinterested directors under division (A) or by
independent legal counsel under division (B) or by the shareholders under
division (C) of this Section 5.04 shall be evidence in rebuttal of the
presumption recited in Section 5.01. Any determination made by the disinterested
directors under division (A) or by independent legal counsel under division (B)
of this Section 5.04 to make indemnification in respect of any claim, issue or
matter asserted in an action or suit threatened or brought by or in the right of
the Corporation shall be promptly communicated to the person who threatened or
brought such action or suit, and within ten days after receipt of such
notification, such person shall have the right to petition the Court of Common
Pleas of Franklin County, Ohio or the court in which such action or suit was
brought, if any, to review the reasonableness of such determination.
SECTION 5.05. ADVANCES FOR EXPENSES. The provisions of Section
1701.13(E)(5)(a) of the Ohio Revised Code do not apply to the Corporation.
Expenses (including, without limitation, attorneys' fees, filing fees, court
reporters' fees and transcript costs) incurred in defending any action, suit or
proceeding referred to in Section 5.01 shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding to or on
behalf of the officer or director promptly as such expenses are incurred by him,
but only if such officer or director shall first agree, in writing, to repay all
amounts so paid in respect of any claim, issue or other matter asserted in such
action, suit or proceeding in defense of which he shall not have been successful
on the merits or otherwise if it is proved by clear and convincing evidence in a
court of competent jurisdiction that, in respect of any such claim, issue or
other matter, his relevant action or failure to act was occasioned by his
deliberate intent to cause injury to the Corporation or his reckless disregard
for the best interests of the Corporation, unless, and only to the extent that,
the Court of Common Pleas of Franklin County, Ohio or the court in which such
action or suit was brought shall determine upon application that, despite such
determination, and in view of all of the circumstances, he is fairly and
reasonably entitled to all or part of such indemnification.
SECTION 5.06. ARTICLE FIVE NOT EXCLUSIVE. The indemnification provided by
this Article FIVE shall not be exclusive of, and shall be in addition to, any
other rights to which any person seeking indemnification may be entitled under
the Articles, the Regulations, any agreement, a vote of disinterested directors,
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be an officer or director of the Corporation and shall inure
to the benefit of the heirs, executors, and administrators of such a person.
SECTION 5.07. INSURANCE. The Corporation may purchase and maintain
insurance, or furnish similar protection, including but not limited to trust
funds, letters of credit, or self-insurance, for or on behalf of any person who
is or was a director, officer, employee, agent or volunteer of the Corporation,
or is or was serving at the request of the Corporation as a director, trustee,
officer, employee, member, manager, agent or volunteer of another corporation
(domestic or foreign, nonprofit or for profit), limited liability company,
partnership, joint venture, trust or other enterprise, against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the obligation or
the power to indemnify him against such liability under the provisions of this
Article FIVE. Insurance may be purchased from or maintained with a person in
which the Corporation has a financial interest.
SECTION 5.08. CERTAIN DEFINITIONS. For purposes of this Article FIVE, and
as an example and not by way of limitation:
(A) A person claiming indemnification under this Article FIVE shall be
deemed to have been successful on the merits or otherwise in defense of any
action, suit or proceeding
12
<PAGE> 13
referred to in Section 5.01, or in defense of any claim, issue or other
matter therein, if such action, suit or proceeding shall be terminated as
to such person, with or without prejudice, without the entry of a judgment
or order against him, without a conviction of him, without the imposition
of a fine upon him and without his payment or agreement to pay any amount
in settlement thereof (whether or not any such termination is based upon a
judicial or other determination of the lack of merit of the claims made
against him or otherwise results in a vindication of him).
(B) References to an "other enterprise" shall include employee tax
benefit plans; references to a "fine" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan, its
participants or beneficiaries.
SECTION 5.09. VENUE. Any action, suit or proceeding to determine a claim
for, or for repayment to the Corporation of, indemnification under this Article
FIVE may be maintained by the person claiming such indemnification, or by the
Corporation, in the Court of Common Pleas of Franklin County, Ohio. The
Corporation and (by claiming or accepting such indemnification) each such person
consent to the exercise of jurisdiction over its or his person by the Court of
Common Pleas of Franklin County, Ohio in any such action, suit or proceeding.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01. AMENDMENTS. The Regulations may only be amended in accordance
with the provisions of the Articles.
SECTION 6.02. SECTION 1701.831 OF THE OHIO REVISED CODE NOT
APPLICABLE. Section 1701.831 of the Ohio Revised Code does not apply to control
share acquisitions of shares of the Corporation.
13
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
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<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> AUG-31-1998
<EXCHANGE-RATE> 1
<CASH> 11,196
<SECURITIES> 0
<RECEIVABLES> 273,128
<ALLOWANCES> 4,112
<INVENTORY> 320,601
<CURRENT-ASSETS> 641,571
<PP&E> 1,380,563
<DEPRECIATION> 394,938
<TOTAL-ASSETS> 1,881,088
<CURRENT-LIABILITIES> 521,799
<BONDS> 415,223
0
0
<COMMON> 926
<OTHER-SE> 723,063
<TOTAL-LIABILITY-AND-EQUITY> 1,881,088
<SALES> 409,280
<TOTAL-REVENUES> 409,280
<CGS> 347,602
<TOTAL-COSTS> 347,602
<OTHER-EXPENSES> 32,072
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,943
<INCOME-PRETAX> 28,080
<INCOME-TAX> 10,390
<INCOME-CONTINUING> 17,690
<DISCONTINUED> (1,316)
<EXTRAORDINARY> 0
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<NET-INCOME> 16,374
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