<PAGE> 1
As filed with the Securities and Exchange Commission on February 16, 1999
Registration No.------------------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------
JO-ANN STORES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Ohio 34-0720629
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5555 Darrow Road
Hudson, Ohio 44236
(Address of Principal Executive Offices)
--------------------
1998 Incentive Compensation Plan
(Full Title of the Plan)
--------------------
TH&F Statutory Agent Corp.
10 West Broad Street
Columbus, Ohio 43215
(614) 469-3200
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed
Proposed maximum
maximum aggregate
Title of securities to offering price offering Amount of
be registered Amount to be registered per share(1) price (1) registration fee (1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Shares, 1,800,000 $14.84 $26,712,000 $7,426
without par value (2)
Class B Common Shares, 2,300,000 $12.63 $29,049,000 $8,076
without par value
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(c) and 457(h) under the Securities
Act of 1933, as amended (the "Securities Act"), solely for purposes of
calculating the registration fee. The fee with respect to the shares
registered herein is based on the average of the high and low sale prices
on February 12, 1999 of the Registrant's Class A and Class B Common Shares
as reported on the New York Stock Exchange.
<PAGE> 2
(2) Each Class A Common Share includes an associated right to purchase one
Class A Common Share (the "Right"). Until the occurrence of certain
prescribed events, none of which has occurred, the Right is not
exercisable, is evidenced by the certificate representing the Class A
Common Share, and will be transferred along with and only with the Class A
Common Share.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of this
registration statement on Form S-8 (the "Registration Statement") will be sent
or given to Plan participants as specified by Rule 428(b)(1) under the
Securities Act. Such documents and the documents incorporated by reference
herein pursuant to Item 3 of Part II hereof, taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are on file with the Securities and
Exchange Commission (the "Commission"), are incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended
January 31, 1998;
2. The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended (i) May 2, 1998, (ii) August 1, 1998, and (iii) October 31, 1998;
3. The Registrant's Quarterly Report on Form 10-Q/A filed on February
1, 1999; and
4. The Registrant's Current Reports on Form 8-K filed on (i) February
12, 1998, (ii) March 24, 1998, and (iii) May 6, 1998.
5. The descriptions of the Registrant's Class A Common Shares and Class
B Common Shares and rights to purchase Class A Common Shares under certain
circumstances are contained in the Registrant's Registration Statements filed
with the Commission pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or report filed
for the purpose of updating that description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment,
which indicates that all of the securities offered hereby have been sold or
which deregisters all such securities remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be part hereof
from the date of filing such documents.
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<PAGE> 4
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article V of the Registrant's Amended Regulations provides as follows:
INDEMNIFICATION
SECTION 1. THIRD PARTY ACTIONS. The Registrant shall indemnify
any person 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 (other than an action or suit by or
in the right of the Registrant), by reason of the fact that he is or was a
director, officer, employee, or agent of the Registrant, or is or was serving at
the request of the Registrant as a director, trustee, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. 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, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Registrant or that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. DERIVATIVE ACTIONS. The Registrant shall indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right of the
Registrant to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee, or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, trustee, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Registrant, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which that person shall have been finally adjudged to be liable for negligence
or misconduct in the performance of
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<PAGE> 5
his duty to the Registrant unless and only to the extent that the Court of
Common Pleas or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, that person is fairly and reasonably
entitled to indemnity for such expenses as the Court of Common Pleas or the
other court shall deem proper.
SECTION 3. RIGHTS AFTER SUCCESSFUL DEFENSE. To the extent that
a director, trustee, officer, employee, or agent has been successful on the
merits or otherwise in defense of any action, suit, or proceeding referred to in
Section 1 or Section 2, or in defense of any claim, issue, or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
SECTION 4. OTHER DETERMINATION OF RIGHTS. Except in a
situation governed by Section 3, any indemnification under Section 1 or Section
2 (unless ordered by a court) shall be made by the Registrant only as authorized
in the specific case upon a determination that indemnification of the director,
trustee, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or Section 2.
The determination shall be made (a) by a majority vote, at a meeting of
directors, of those directors who constitute a quorum and 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 even if obtainable) and a majority of
disinterested directors so directs, in a written opinion by independent legal
counsel (compensated by the Registrant) or (c) by the affirmative vote in person
or by proxy of the holders of record of a majority of the shares held by persons
who were not and are not parties to or threatened with any such action, suit, or
proceeding and entitled to vote in the election of directors, without regard to
voting power which may thereafter exist upon a default, failure, or other
contingency or (d) by the Court of Common Pleas or the court in which such
action, suit, or proceeding was brought.
SECTION 5. ADVANCES OF EXPENSES. Expenses (including
attorneys' fees) incurred in defending any action, suit, or proceeding referred
to in Section 1 or Section 2 may be paid by the Registrant in advance of final
disposition of the action, suit, or proceeding, as authorized by the Board of
Directors in the specific case, upon receipt of an undertaking by or on behalf
of the director, trustee, officer, employee, or agent to repay the amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
Registrant.
SECTION 6. PURCHASE OF INSURANCE. The Registrant may purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Registrant, or is or was serving at the
request of the Registrant as a director, trustee, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against any liability asserted against him and incurred by him in any capacity,
or arising out of his status as such, whether or not the Registrant would have
the power to
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<PAGE> 6
indemnify him against liability under the provisions of this Article or of the
Ohio General Corporation Law.
SECTION 7. MERGERS. In the case of a merger into this
Registrant of a constituent corporation which, if its separate existence had
continued, would have been required to indemnify directors, trustees, officers,
employees, or agents in specified situations, any person who served as a
director, officer, employee, or agent of the constituent corporation, or served
at the request of the constituent corporation as a director, trustee, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise, shall be entitled to indemnification by this Registrant (as
the surviving corporation) to the same extent he would have been entitled to
indemnification by the constituent corporation if its separate existence had
continued.
SECTION 8. NON-EXCLUSIVITY; HEIRS. The indemnification
provided by this Article shall not be deemed exclusive of any other rights to
which a person seeking indemnification may be entitled as a matter of law or
under the Articles of Incorporation, these Regulations, any agreement, vote of
shareholders or disinterested directors, any insurance purchased by the
Registrant, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding an office, and shall continue as to a
person who has ceased to be a director, trustee, officer, employee, or agent and
shall inure to the benefits of the heirs, executors, and administrators of such
a person.
The Registrant maintains liability insurance for all of its directors
and officers ("D&O Insurance"). The D&O Insurance also insures the Registrant
against amounts payable to indemnify directors and officers, subject to policy
limits and retention amounts.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit
Index on page 8, and are incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
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<PAGE> 7
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such
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<PAGE> 8
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Hudson, State of Ohio, on February 16, 1999.
JO-ANN STORES, INC.
By: /s/ Alan Rosskamm
-----------------
Alan Rosskamm, Chairman,
President and Chief Executive
Officer
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<PAGE> 9
Pursuant to the requirements of the Securities Act, this Registration Statement
has been signed by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Alan Rosskamm Chairman of the Board and Director February 16, 1999
- ------------------------------------- (Principal Executive Officer)
Alan Rosskamm
/s/ Brian P. Carney Executive Vice President and Chief February 16, 1999
- ------------------------------------- Financial Officer (Principal Financial
Brian P. Carney and Accounting Officer)
/s/ Betty Rosskamm Director February 16, 1999
- -------------------------------------
Betty Rosskamm
/s/ Alma Zimmerman Director February 16, 1999
- -------------------------------------
Alma Zimmerman
/s/ Scott Cowen Director February 16, 1999
- -------------------------------------
Scott Cowen
/s/ Ira Gumberg Director February 16, 1999
- -------------------------------------
Ira Gumberg
/s/ Frank Newman Director February 16, 1999
- -------------------------------------
Frank Newman
/s/ Gregg Searle Director February 16, 1999
- -------------------------------------
Gregg Searle
/s/ Debra Walker Director February 16, 1999
- -------------------------------------
Debra Walker
</TABLE>
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<PAGE> 10
JO-ANN STORES, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
4(a) Amended Articles of Incorporation of Jo-Ann Stores, Inc.
4(b) Amended Regulations of Jo-Ann Stores, Inc. filed as an Exhibit to Form
8-K filed on December 1, 1993 and incorporated herein by reference.
4(c) Form of Second Amendment of Rights Agreement, dated
August 2, 1995, between the Registrant and Society
National Bank, as successor by merger to Ameritrust
Company, as Rights Agent, filed as Exhibit 4 to Form
10-Q for the quarter ended July 29, 1995 filed on
September 11, 1995 and incorporated herein by
reference.
5 Opinion of Thompson Hine & Flory LLP as to the legality of the securities
being registered.
23(a) Consent of Independent Auditors.
23(b) Consent of Thompson Hine & Flory LLP (included as part of Exhibit 5)
</TABLE>
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<PAGE> 1
EXHIBIT 4(a)
1998
AMENDED ARTICLES OF INCORPORATION
OF
JO-ANN STORES, INC.
FIRST: The name of the Corporation is JO-ANN STORES, INC.
SECOND: The place in the State of Ohio where its principle
office is located is the Village of Hudson, County of Summit.
THIRD: The purposes for which, and for any of which, it is
formed are:
a) To carry on the business of dealing in fabrics and in connection
therewith to buy and sell, at wholesale or retail, import, export,
manufacture, weave, produce, repair, adapt, prepare, use and otherwise
deal in, rubber, cotton, wool, silk, flax, glass, synthetic and all
other fibrous materials, goods and fabrics, and in goods and fabrics
into which rubber, cotton, wool, silk, flax, glass, synthetic or any
fibrous material enters as a component part.
b) To develop, manufacture, repair, treat, finish, buy, sell, and
generally deal in, in every manner, materials, articles and products of
every kind and description, and to do all things necessary or
incidental thereto, including owning, holding and dealing in, in every
manner, all real and personal property necessary or incidental to the
foregoing purposes.
c) In general to carry on any other lawful business whatsoever in
connection with the business of the Corporation or which is calculated,
directly or indirectly, to promote the interests of the Corporation or
to enhance the value of its properties, and to have and exercise all
rights, powers and privileges which are now or may hereafter be
conferred upon corporations by the laws of Ohio.
The Corporation reserves the right at any time and from time
to time to change substantially its purposes in any manner now or hereafter
permitted by statute.
FOURTH: The authorized number of shares of the Corporation is
155,000,000, consisting of 5,000,000 shares of Serial Preferred Stock without
par value ("Serial Preferred Shares"), 75,000,000 Class A Common Shares without
par value ("Class A Shares") and 75,000,000 Class B Common Shares without par
value ("Class B Shares" and together with the Class A Shares, the "Common
Stock"). The shares of each class shall have the express terms set forth in this
Article Fourth.
DIVISION A: EXPRESS TERMS OF SERIAL PREFERRED SHARES
1. The Serial Preferred Shares may be issued from time to time
in one or more series. Each Serial Preferred Share of any one series shall be
identical with each other share of the same series in all respects, except as to
the date from which dividends thereon shall be cumulative by reason of different
dates of issuance; and all Serial Preferred Shares of all series shall rank
equally and shall be identical, except in respect of the terms that may be fixed
by the Board of Directors as hereinafter provided. Subject to the provisions of
Sections 2 through 7 of this Division A, which provisions shall apply to all
Serial Preferred Shares of all series, the Board of Directors is hereby
authorized to cause
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<PAGE> 2
Serial Preferred Shares to be issued in one or more series and with respect to
each such series, prior to the issuance thereof, to fix:
(a) The designation of the series, which may be by
distinguishing number, letter or title.
(b) The number of shares of the series, which number the Board
of Directors may increase or decrease, except where otherwise provided in the
creation of the series.
(c) The dividend rate of the series.
(d) The dates on which dividends, if declared, shall be
payable and the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for
shares of the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) Whether the shares of the series shall be convertible into
Class A Shares and/or Class B Shares and, if so, the conversion rate or rates or
price or prices and the adjustments thereof, if any, and all other terms and
conditions upon which conversions may be made.
(h) The amounts payable on shares of the series in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation.
(i) Restrictions (in addition to those set forth in Sections
6(b) and 6(c) of this Division A) on the issuance of shares of the same series
or of any other class or series.
The Board of Directors is authorized to adopt from time to time amendments to
the Articles of Incorporation or Amended Articles of Incorporation of the
Corporation fixing, with respect to each such series, the matters specified in
clauses (a) through (i) of this Section 1.
2. The holders of Serial Preferred Shares of each series, in
preference to the holders of Common Stock and any other class of shares ranking
junior to the Serial Preferred Shares, shall be entitled to receive, out of any
funds legally available and when and as declared by the Board of Directors, cash
dividends at the rate (and no more) for such series fixed in accordance with the
provisions of Section 1 of this Division A, payable quarterly on the dates fixed
for such series. Such dividends shall be cumulative, in the case of shares of
each particular series, from and after the date or dates fixed with respect to
such series. No dividends may be paid upon or declared and set apart for any of
the Serial Preferred Shares for any quarterly dividend period unless at the same
time a like proportionate dividend for the same quarterly dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be declared and paid or a sum sufficient for payment thereof set apart for
the Serial Preferred Shares of all series.
3. So long as any Serial Preferred Shares are outstanding, no
dividend (except a dividend payable in Class A Shares or Class B Shares or in
other shares of the Corporation ranking junior to the Serial Preferred Shares)
shall be paid or declared or any distribution be made (except as aforesaid)
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<PAGE> 3
in respect of the Class A Shares or Class B Shares or in respect of other shares
of the Corporation ranking junior to the Serial Preferred Shares, nor shall any
Class A Shares or Class B Shares or any other shares of the Corporation ranking
junior to the Serial Preferred Shares be purchased, retired or otherwise
acquired by the Corporation (except out of the proceeds of the sale of Class A
Shares or Class B Shares or other shares of the Corporation ranking junior to
the Serial Preferred Shares received by the Corporation subsequent to January
28, 1984).
(a) unless all accrued and unpaid dividends on the Serial
Preferred Shares of all series, including the full dividends for the current
quarterly dividend period, shall have been declared and paid or a sum sufficient
for payment thereof set apart, and
(b) unless redemption of Serial Preferred Shares of any series
shall have been effected from, and any required payment shall have been made
into, any sinking fund provided for shares of such series in accordance with the
provisions of Section 1 of this Division A.
4. (a) Subject to the express terms of each series and to the
provisions of Section 6(b)(iii) of this Division A, the Corporation (i) may from
time to time redeem all or any part of the Serial Preferred Shares of any series
at the time outstanding at the option of the Board of Directors at the
applicable redemption price for such series fixed in accordance with the
provisions of Section 1 of this Division A, or (ii) shall from time to time make
such redemptions of the Serial Preferred Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of such series at the
applicable sinking fund redemption price fixed in accordance with the provisions
of Section 1 of this Division A, together, in each case, with accrued and unpaid
dividends to the redemption date.
(b) Notice of every redemption shall be mailed by first
class mail, postage prepaid, to the holders of record of the Serial Preferred
Shares to be redeemed, at their respective addresses then appearing on the books
of the Corporation, not less than 30 or more than 60 days prior to the date
fixed for redemption. At any time before or after notice has been given as above
provided, the Corporation may deposit the aggregate redemption price of the
Serial Preferred Shares to be redeemed, together with accrued and unpaid
dividends thereon to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and surplus of more than
$50,000,000, named in such notice, directed to be paid to the respective holders
of the Serial Preferred Shares to be redeemed, in amounts equal to the
redemption price of all Serial Preferred Shares so to be redeemed, together with
accrued and unpaid dividends thereon to the redemption date, upon surrender of
the share certificate or certificates held by such holders, and upon the giving
of such notice and the making of such deposit such holders shall cease to be
shareholders with respect to such shares, and after such notice shall have been
given and such deposit shall have been made such holders shall have no claim
against the Corporation or privileges with respect to such shares except only to
receive such money from such bank or trust company without interest or the right
to exercise, before the redemption date, any unexpired rights of conversion. In
case less than all of the outstanding Serial Preferred Shares of any series are
to be redeemed, the Corporation shall select by lot the shares so to be redeemed
in such manner as shall be prescribed by its Board of Directors. If the holders
of Serial Preferred Shares that shall have been called for redemption shall not,
within six years after such deposit, claim the amount deposited for the
redemption of their shares, any such bank or trust company shall, upon demand,
pay over to the Corporation such unclaimed amounts and thereupon such bank or
trust company and the Corporation shall be relieved of all responsibility in
respect thereof and to such holders.
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<PAGE> 4
(c) Any Serial Preferred Shares that are redeemed by the Corporation
pursuant to the provisions of this Section 4 of this Division A and any Serial
Preferred Shares that are purchased and delivered in satisfaction of any sinking
fund requirements provided for shares of such series and any Serial Preferred
Shares that are converted in accordance with their express terms shall be
canceled and not reissued. Any Serial Preferred Shares otherwise acquired by the
Corporation shall be restored to the status of authorized and unissued Serial
Preferred Shares without serial designation.
5. (a) The holders of Serial Preferred Shares of any series shall, in case
of liquidation, dissolution or winding up of the affairs of the Corporation, be
entitled to receive in full, out of the assets of the Corporation, including its
capital, before any amount shall be paid or distributed among the holders of
Class A Shares or Class B Shares or any other shares ranking junior to the
Serial Preferred Shares, the amounts fixed with respect to shares of any such
series in accordance with Section 1 of this Division A, plus in any such event
an amount equal to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation, dissolution or winding
up of the affairs of the Corporation. In case the net assets of the Corporation
legally available therefor are insufficient to permit the payment upon all
outstanding Serial Preferred Shares of all series of the full preferential
amount to which the holders thereof are respectively entitled, then such net
assets shall be distributed ratably upon outstanding Serial Preferred Shares of
all series in proportion to the full preferential amount to which the holder of
each such share is entitled. After payment to holders of Serial Preferred Shares
of the full preferential amounts as aforesaid, holders of Serial Preferred
Shares as such shall have no right or claim to any of the remaining assets of
the Corporation.
(b) The merger or consolidation of the Corporation into or with any other
corporation, or the merger of any other corporation into it, or the sale, lease
or conveyance of all or substantially all of the property or business of the
Corporation shall not be deemed to be a dissolution, liquidation or winding up
of the Corporation for the purposes of this Section 5 of this Division A.
6. (a) The holders of Serial Preferred Shares of all series shall be
entitled to one vote for each such share upon all matters presented to
shareholders; and, except as otherwise provided herein or required by law, the
holders of Serial Preferred Shares of all series and the holders of Class A
Shares shall vote together as one class on all matters. If, and as often as, the
Corporation shall be in default in the payment of the equivalent of six
quarterly dividends (whether or not consecutive) on any series of Serial
Preferred Shares at any time outstanding, whether or not earned or declared, the
holders of Serial Preferred Shares of all series voting separately as a class
and in addition to all other rights to vote for Directors shall thereafter be
entitled to elect, as herein provided, two members of the Board of Directors of
the Corporation; provided, however, that the special class voting rights
provided for herein, when the same shall have become vested, shall remain so
vested until all accrued and unpaid dividends on the Serial Preferred Shares of
all series then outstanding shall have been paid, whereupon the holders of
Serial Preferred Shares shall be divested of their special class voting rights
in respect of subsequent elections of Directors, subject to the revesting of
such special class voting rights in the event hereinabove specified in this
Section 6(a). In the event of default entitling the holders of Serial Preferred
Shares to elect two Directors as above specified, a special meeting of the
shareholders for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called by, the
holders of record of at least 10% of the Serial Preferred Shares of all series
at the time outstanding, and notice thereof shall be given in the same manner as
that required for the annual meeting of shareholders; provided, however, that
the Corporation shall not be required to call such special meeting if the annual
meeting of shareholders shall be held within 90 days after the date of receipt
of the
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foregoing written request from the holders of Serial Preferred Shares. At
any meeting at which the holders of Serial Preferred Shares shall be entitled to
elect Directors, the holders of not less than one-third of the outstanding
Serial Preferred Shares of all series, present in person or by proxy, shall be
sufficient to constitute a quorum and the vote of the holders of a majority of
such shares so present at any such meeting at which there shall be a quorum
shall be sufficient to elect the members of the Board of Directors that the
holders of Serial Preferred Shares are entitled to elect as herein before
provided. The two Directors who may be elected by the holders of Serial
Preferred Shares pursuant to the foregoing provisions shall be in addition to
any other Directors then in office or proposed to be elected otherwise than
pursuant to such provisions, and nothing in such provisions shall prevent any
change otherwise permitted in the total number of Directors of the Corporation
or required the resignation of any Directors elected otherwise than pursuant to
such provisions.
(b) The affirmative vote or consent of the holders of at least
two-thirds of the then outstanding Serial Preferred Shares of all series, given
in person or by proxy, either in writing or at a meeting called for the purpose
at which the holders of Serial Preferred Shares of all series shall vote
separately as a class, shall be necessary to effect any one or more of the
following (but, insofar as the holders of Serial Preferred Shares are concerned,
such action may be effected with such vote or consent):
(i) Any amendment, alteration or repeal of any of the provisions
of the Articles of Incorporation or of the Regulations of the
Corporation that affects adversely the voting powers, rights or
preferences of the holders of Serial Preferred Shares; provided,
however, that for the purpose of this clause (i) only, neither the
amendment of the Articles of Incorporation of the Corporation to
authorize, or to increase the authorized or outstanding number of,
Serial Preferred Shares or of any shares of any class ranking on a
parity with or junior to the Serial Preferred Shares, nor the increase
by the shareholders or Board of Directors pursuant to the Regulations
of the number of Directors of the corporation shall be deemed to
affect adversely the voting powers, rights or preferences of the
holders of Serial Preferred Shares; and provided further that, if such
amendment, alteration or repeal affects adversely the rights or
preferences of one or more but not all then outstanding series of
Serial Preferred Shares, only the affirmative vote or consent of the
holders of at least two-thirds of the number of the then outstanding
shares of the series so affected shall be required;
(ii) The authorization, or the increase in the authorized number,
of shares of any class ranking prior to the Serial Preferred Shares;
or
(iii) The purchase or redemption (whether for sinking fund
purposes or otherwise) of less than all the then outstanding Serial
Preferred Shares except in accordance with a purchase offer made to
all holders of record of Serial Preferred Shares, unless all dividends
on all Serial Preferred Shares then outstanding for all previous
quarterly dividend periods shall have been declared and paid or funds
therefore set apart and all accrued sinking fund obligations
applicable to all Serial Preferred Shares shall have been complied
with.
(c) The affirmative vote or consent of the holders of at least a
majority of the then outstanding Serial Preferred Shares of all series, given in
person or by proxy, either in writing or at a meeting called for the purpose at
which the holders of Serial Preferred Shares of all series shall vote separately
as a class, shall be necessary (but insofar as the holders of Serial Preferred
Shares are concerned, such action may be effected with such affirmative vote or
consent) to authorize any shares
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ranking on a parity with the Serial Preferred Shares or an increase in the
authorized number of Serial Preferred Shares.
7. For the purposes of this Division A:
(a) Whenever reference is made to shares "ranking
prior to the Serial Preferred Shares," such reference shall
mean and include all shares of the Corporation in respect of
which the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation are given preference over the
rights of the holders of Serial Preferred Shares.
(b) Whenever reference is made to shares "on a parity
with the Serial Preferred Shares," such reference shall mean
and include all shares of the Corporation in respect of which
the rights of the holders thereof as to the payment of
dividends and as to distributions in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation rank on an equality with the rights
of the holders of Serial Preferred Shares.
(c) Whenever reference is made to shares "ranking
junior to the Serial Preferred Shares," such reference shall
mean and include all shares of the Corporation other than
those defined under clauses (a) and (b) of this Section 7 as
shares "ranking prior to" or "on a parity with" the Serial
Preferred Shares.
DIVISION B: EXPRESS TERMS OF CLASS A SHARES AND CLASS B SHARES.
1. GENERAL. The Class A Shares and Class B Shares shall be subject to
the express terms of the Serial Preferred Shares and any series thereof. The
powers, preferences and rights of the Class A Shares and Class B Shares and the
qualifications, limitations and restrictions thereof, shall in all respects be
identical, except as otherwise required by law or as expressly provided in these
Amended Articles of Incorporation.
2. VOTING.
a. Each shareholder of the Corporation shall be entitled to
one vote for each Class A Share standing in such shareholder's name on
the books of the Corporation on all matters presented to shareholders
for their vote, consent, waiver, release or other action.
b. The holders of Class B Shares shall not be entitled to
vote on any matter submitted to shareholders for their vote, consent,
waiver, release or other action except as otherwise required by law.
3. DIVIDENDS AND DISTRIBUTIONS. Dividends and distributions may be
declared and paid to the holders of Class A Shares and Class B Shares in cash,
property, or other securities of the Corporation (including shares of any class
whether or not shares of such class are already outstanding) out of funds
legally available therefore. Each Class A Share and each Class B Share shall
have identical
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rights with respect to dividends and distributions subject to the following:
a. subject to Section 4 of Division B of Article Fourth, at
the discretion of the Board of Directors, a dividend or distribution
in cash or property on a Class B Share may be greater (but not less)
than any dividend or distributions in cash or property on a Class A
Share;
b. a dividend or distribution in shares of the Corporation
on Class A Shares may be paid or made in Class A Shares or Class B
Shares; and
c. a dividend or distribution in shares of the Corporation
on Class B Shares may be paid or made only in Class B Shares.
4. MERGER, CONSOLIDATION, COMBINATION OR DISSOLUTION OF THE
CORPORATION. In the event of merger, consolidation or combination of the
Corporation with another entity (whether or not the Corporation is the surviving
entity) or in the event of dissolution of the Corporation, holders of Class B
Shares shall be entitled to receive in respect of each Class B Share the same
indebtedness, other securities, cash, rights, or any other property, or any
combination of shares, evidences of indebtedness, securities, cash, rights or
any other property, as holders of Class A Shares shall be entitled to receive in
respect to each share, except that any common stock that holders of Class B
Shares shall be entitled to receive in any such event may have terms
substantially similar to those of the Class B Shares as set forth in this
Division B of Article Fourth.
5. SPLITS OR COMBINATIONS OF SHARES. If the Corporation shall in any
manner split, subdivide or combine the outstanding Class A Shares or Class B
Shares, the outstanding shares of the other such class shall be proportionately
split, subdivided or combined in the same manner and on the same basis as the
outstanding shares of the class that has been split, subdivided or combined.
6. CHANGE IN NUMBER OF AUTHORIZED CLASS B SHARES. The number of
authorized Class B Shares may be increased or decreased (but not below the
number then outstanding) by the affirmative vote of the holders of a majority of
the aggregate number of outstanding Class A Shares entitled to vote in the
election of Directors as a single class.
7. CLASS B PROTECTION PROVISIONS. a. If, after the Effective Time, a
Person or group, each as defined in Section 7(k) of Division B of this Article
Fourth, acquires beneficial ownership of shares represented 15% or more of the
number of then outstanding Class A Shares and such Person or group (a
"Significant Shareholder") does not then beneficially own an equal or greater
percentage of all then outstanding shares of the Class B Shares, all of which
Class B Shares must have been acquired by such Significant Shareholder after the
Effective Time, such Significant Shareholder must, within a ninety (90) day
period beginning the day after becoming a Significant Shareholder, make a public
cash tender offer in compliance with all applicable laws and regulations to
acquire additional Class B Shares as provided in this Section 7 of Division B of
Article Fourth (a "Class B Protection Transaction").
b. In each Class B Protection Transaction, the Significant Shareholder
must make a public tender offer to acquire that number of additional Class B
Shares determined by (i) multiplying the
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percentage of the number of outstanding Class A Shares beneficially owned
and acquired after the Effective Time by such a Significant Shareholder by the
total number of Class B Shares outstanding on the date such Person or group
became a Significant Shareholder, and (ii) subtracting therefrom the number of
Class B Shares beneficially owned by such Significant Shareholder on the date
such Person or group became a Significant Shareholder which were acquired after
the Effective Time (as adjusted for stock splits, stock dividends and similar
recapitalizations). The Significant Shareholder must acquire all shares validly
tendered; or if the number of Class B Shares tendered to the Significant
Shareholder exceeds the number of shares required to be acquired pursuant to
this Section 7(b), the number of Class B Shares acquired from each tendering
holder shall be pro rata based on the percentage that the number of shares
tendered by such shareholder bears to the total number of shares tendered by all
tendering holders.
c. The offer price for any Class B Shares required to be purchased by
the Significant Shareholder pursuant to Section 7 of Division B of this Article
Fourth shall be the greatest of (i) the highest price per share paid by the
Significant Shareholder for any Class A Shares or Class B Shares during the six
month period ending on the date such Person or group became a Significant
Shareholder (or such shorter period if the date such Person or group became a
Significant Shareholder is not more than six months following the Effective
Time), (ii) the highest reported sale price of Class A Shares or Class B Shares
on the New York Stock Exchange (or such other securities exchange or quotation
system as is then the principal trading market for such shares) during the 30
day period preceding such Person or group becoming a Significant Shareholder,
and (iii) the highest reported sale price of Class A Shares or Class B Shares on
the New York Stock Exchange (or such other securities exchange or quotation
system as is then the principle trading market for such shares) on the business
day preceding the date the Significant Shareholder makes the tender offer
required by this Section 7 of Division B of this Article Fourth. For purposes of
Section 7(d) of Division B of this Article Fourth, the applicable date for each
calculation required by clauses (i) and (ii) of the preceding sentence shall be
the date on which the Significant Shareholder becomes required to engage in the
Class B Protection Transaction for which such calculation is required. In the
event that the Significant Shareholder has acquired Class A Shares or Class B
Shares in the six month period ending on the date such Person or group becomes a
Significant Shareholder for consideration other than cash, the value of such
consideration per share of Class A Shares shall be as determined in good faith
by the Board of Directors.
d. A Class B Protection Transaction shall also be required to be
effected by any Significant Shareholder each time that the Significant
Shareholder acquires after the Effective Time beneficial ownership of additional
Class A Shares in an amount equal to or greater than the next higher integral
multiple of 5% in excess of 15% (e.g., 20%, 25%, 30%, etc.) of the number of
outstanding Class A Shares if such Significant Shareholder does not then own an
equal or greater percentage of the Class B Shares (all of which Class B Shares
must have been acquired by such Significant Shareholder after the Effective
Time). Such Significant Shareholder shall be required to make a public cash
tender offer to acquire that number of Class B Shares prescribed by the formula
set forth in Section 7(b) of Division B of this Article Fourth, and must acquire
all shares validly tendered or a pro rata portion hereof, as specified in such
Section 7(b), at the price determined pursuant to Section 7(c) of Division B of
this Article Fourth, even if a previous Class B Protection Transaction resulted
in fewer Class B Shares being tendered than required in the previous offer.
e. If any Significant Shareholder fails to make an offer required by
this Section 7 of Division B of this Article Fourth, or to purchase shares
validly tendered and not withdrawn (after
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proration, if any), such Significant Shareholder shall not be entitled to vote
any Class A Shares beneficially owned by such Significant Shareholder and
acquired by such Significant Shareholder after the Effective Time unless and
until such requirements are complied with or unless and until all Class A Shares
causing such offer requirement to be effective are no longer beneficially owned
by such Significant Shareholder. To the extent that the voting power of any
Class A Shares is so suspended, such shares shall not be included in the
determination of aggregate voting shares for any purpose under these Amended
Articles of Incorporation or the Ohio Revised Code. The requirement to engage in
a Class B Protection Transaction is satisfied by the making of the requisite
offer and purchasing validly tendered shares pursuant to this Section 7 of
Division B of this Article Fourth, even if the number of shares tendered is less
than the number of shares included in the required offer.
f. The Class B Protection Transaction requirement shall not apply
to any increase in percentage beneficial ownership of Class A Shares resulting
solely from a change in the aggregate amount of Class A Shares outstanding,
provided that any acquisition after such change which resulted in any Person or
group beneficially owning fifteen percent (15%) or more of the number of
outstanding Class A Shares (or an additional 5% or more of the number of shares
of the Class A Shares after the last acquisition which triggered the requirement
for a Class B Protection Transaction) shall be subject to any Class B Protection
Transaction requirement that would be imposed pursuant to this Section 7 of
Division B of this Article Fourth.
g. In connection with Sections 7(a) through 7(d) of Division B of
this Article Fourth, the following Class A Shares shall be excluded for the
purpose of determining the Class A Shares beneficially owned by such Person or
group but not for the purposes of determining shares outstanding:
(i) shares beneficially owned by such Person or group at the
Effective Time;
(ii) shares acquired by will or by the laws of descent and
distribution, or by gift that is made in good faith and not for
the purpose of circumventing this Section 7 of Division B of
Article Fourth or by foreclosure of a bona fide loan;
(iii) shares acquired upon issuance or sale by the
Corporation;
(iv) shares acquired by operation of law (including a merger
or consolidation effected for the purpose of recapitalizing such
Person or reincorporating such Person in another jurisdiction but
excluding a merger or consolidation effected for the purpose of
acquiring another Person);
(v) shares acquired in exchange for Class B Shares by a
holder of Class B Shares (or by a parent, lineal descendant or
donee of such holder of Class B Shares who received such Class B
Shares from such holder) if the Class B Shares so exchanged were
acquired by such holder directly from the Corporation as a result
of a stock split effected by these Amended Articles of
Incorporation at the Effective Time or any subsequent stock split
or as a dividend on Class A Shares; and
(vi) shares acquired by a plan of the Corporation qualified
under Section 401(a) of the Internal Revenue Code of 1986, as
amended, or any successor provision thereto, or acquired by
reasons of a distribution from such a plan.
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h. In connection with Sections 7(a) through 7(b) of this Division B of
Article Fourth, for purposes of calculating the number of shares of Class B
Shares beneficially owned by any Persons or group:
(i) Class B Shares acquired by gift shall be deemed to be
beneficially owned by such Person or member of a group if such gift
was made in good faith or not for the purpose of circumventing the
operations of this Section 7 of Division B of this Article Fourth; and
(ii) only Class B Shares owned of record by such Person or member
of a group or held by others as nominees of such Person or member of a
group and identified as such to the Corporation shall be deemed to be
beneficially owned by such Person or group (provided that Class B
Shares with respect to which such Person or member of a group has sole
investment and voting power shall be deemed to be beneficially owned
thereby).
i. All calculations with respect to percentage beneficial ownership of
either issued and outstanding Class A Shares or Class B Shares will be based
upon the number of issued and outstanding shares reflected in either the
records of or a certification from the Corporation's stock transfer agent or
reported by the Corporation on the last to be filed of (i) the Corporation's
most recent Annual Report on Form 10-K, (ii) its most recent Quarterly Report on
Form 10-Q, (iii) its most recent Current Report on Form 8-K, and (iv) its most
recent definitive proxy statement filed with the Securities and Exchange
Commission.
j. For purposes of this Section 7 of Division B of this Article
Fourth, the term "Person" means any individual, partnership, corporation,
association, trust, or other entity (other than the Corporation). Subject to
Sections 7(g) and 7(h) of Division B of this Article Fourth, "beneficial
ownership" shall be determined pursuant to Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or any successor
regulation and the formation or existence of a "group" shall be determined
pursuant to Rule 13d-5(b) under the 1934 Act or any successor regulation,
subject to the following qualifications:
(i) relationships by blood or marriage between or among any
Persons will not constitute any of such Persons as a member of a group
with such other Person, absent affirmative attributes of concerted
action; and
(ii) any Person acting in his official capacity as a
director or officer of the Corporation shall not be deemed to
beneficially own shares where such ownership exists solely by virtue
of such Person's status as a trustee (or similar position) with
respect to shares held by plans or trusts for the general benefit of
employees or former employees of the Corporation, and actions taken
or agreed to be taken by a Person in such Person's official capacity
as an officer or director of the Corporation will not cause such
Person to become a member of a group with any other Person.
8. CHANGE OF CLASS B SHARES. Each Class B Share (whether or not then
issued) shall be changed automatically into one Class A Share upon the earlier
to occur of (i) at the time the number of outstanding Class A Shares is less
than 10% of the aggregate number of outstanding Class A Shares and
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Class B Shares; or (ii) upon resolution of the Board of Directors, if as a
result of the existence of the Class B Shares, either the Class A Shares or
Class B Shares or both are excluded from trading on the New York Stock Exchange,
the American Stock Exchange and all other principal national securities
exchanges then in use and are also excluded from quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") -
National Market System and other comparable quotation systems then in use. Upon
such change, the total number of Class A Shares the Corporation shall have
authority to issue, shall be 150,000,000 and the total number of Class B Shares
shall be zero (0) and all references to Class B Shares shall be of no further
force or effect. In making the determination in subparagraphs (i) or (ii), the
Board of Directors may conclusively rely on information and documentation
available to it, including but not limited to, information or certification from
its stock transfer agent, filings made with the Securities and Exchange
Commission, any stock exchange, the National Association of Securities Dealers,
Inc., or any other national quotation system. At the time set forth in (i) or
(ii) above, the Class B Shares shall be deemed changed automatically into shares
of Class A Shares and stock certificates formerly representing Class B Shares
shall thereupon and thereafter be deemed to represent a like number of Class A
Shares. The determination of the Board of Directors that either (i) or (ii) has
occurred shall be conclusive and binding and the change of each Class B Share
into one Class A Share shall remain effective regardless of whether (i) or (ii)
has occurred in fact.
FIFTH: A Director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise, nor shall any transaction
contract or other act of the Corporation be void or voidable or in any way
affected or invalidate by reason of the fact that any Director or officer, or
any firm in which such Director or officer is a member, or any corporation of
which such Director or officer is a shareholder, Director or officer, is in any
way interested in such transaction, contract or other act, provided the fact
that such officer, Director, firm or corporation is so interested shall be
disclosed or shall be known to the Board of Directors of such members thereof as
shall be present at any meeting of the Board of Directors at which action upon
any such transaction, contract or other act shall be taken; nor shall any such
Director or officer be accountable or responsible to the Corporation for or in
respect of any such transaction, contract or other act of the Corporation or for
any gains or profits realized by him by reason of the fact that he or any firm
of which he is a member of any corporation of which he is a shareholder,
Director or officer is interested in such transaction, contract or other act;
any such Director may be counted in determining the existence of a quorum at any
meeting of the Board of Directors of the Corporation which shall authorize or
take action in respect of any such transaction, contract or other act, and may
vote there at to authorize, ratify or approve any such transaction, contract or
other act with like force and effect as if he or any firm of which he is a
member or any corporation of which he is a shareholder, Director or officer were
not interested in such transaction, contract or other act.
SIXTH: No holder or any class of shares of the Corporation
shall have any pre-emptive or preferential rights to subscribe to or purchase
any shares of any class of stock of the Corporation, whether now or hereafter
authorized and whether unissued or in the treasury, or any obligations
convertible into shares of any class of stock of the Corporation, at any time
issued or sold, or any rights to subscribe to or purchase any thereof.
SEVENTH: The Board of Directors is hereby authorized to fix
and determine and to vary the amount of working capital of the Corporation, to
determine whether any, and, if any, what part of its surplus, however created or
arising, shall be used or disposed of or declared in dividends, or paid to
shareholders, and, without action by the shareholders, to use and apply such
surplus, or any part thereof,
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at any time, or from time to time, in the purchase or acquisition of shares of
any one class or combination of classes of shares, voting trust certificates for
shares, bonds, debentures, notes, scrip, warrants, obligations, evidences of
indebtedness of the Corporation or any other securities of the Corporation, to
such extent or amount and in such manner and upon such price and other terms as
the Board of Directors shall deem expedient without regard to the differences
among the classes of shares or other securities in price and other terms under
which shares may be purchased or in the relative number of shares that may be
available for purchase. The Board of Directors hereby is authorized to fix at
any time and from time to time the amount of consideration for which the
Corporation may issue its shares or any other securities, whether or not greater
consideration could be received upon the issue or sale of the same number of
shares of another class.
EIGHTH: Any and every statute of the State of Ohio hereafter
enacted whereby the rights, powers or privileges of corporations or of the
shareholders of corporations organized under the laws of the State of Ohio are
increased or diminished or in any way affected, or whereby effect is given to
the action taken by any number, less than all, of the shareholders of any such
corporation, shall apply to the Corporation and shall be binding not only upon
the Corporation but upon every shareholder of the Corporation to the same extent
as if such statute had been in force at the date of the filing of these Articles
of Incorporation in the office of the Secretary of State.
NINTH: Notwithstanding any provisions of the Ohio Revised Code
now or hereafter in force otherwise requiring for any purpose the vote, consent,
waiver or release of the holders of shares entitling them to exercise
two-thirds, or any other proportion of the voting power of the Corporation or of
any class or classes of shares thereof, such action, unless otherwise expressly
required by statute or by the Articles of Incorporation, may be taken by the
vote, consent, waiver or release of the holders of shares entitling them to
exercise a majority of the voting power of the Corporation or of such class or
classes.
TENTH: FAIR PRICE OR 80% VOTE PROVISION
1. VOTING REQUIREMENT. Unless both the fair price requirement set
forth in Section 2 and the other conditions set forth in Section 3 have been
satisfied, the affirmative vote of the holders of 80% of all outstanding shares
of the Corporation entitled to vote in elections of Directors, voting together
as a single class, shall be required for the authorization or approval of any of
the following transactions:
(a) MERGER OR CONSOLIDATION. The merger or consolidation of
the Corporation or any of its subsidiaries with or into an Interested
Party (as hereinafter defined).
(b) DISPOSITION OF ASSETS. The sale, lease, pledge, or other
disposition, in one transaction or in a series of transactions from
the Corporation or any of its subsidiaries to an Interested Party, or
from an Interested Party to the Corporation or any of its
subsidiaries, of assets having an aggregate fair market value (as
hereinafter defined) of $1,000,000 or more.
(c) ISSUANCE OR TRANSFER OF SECURITIES. The issuance, sale,
or other transfer, in one transaction or in a series of transactions,
by the Corporation or any of its subsidiaries to an Interested Party,
or by an Interested Party to the Corporation or any of its
subsidiaries, of securities for cash or other consideration having an
aggregate fair market value of $1,000,000 or more.
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(d) LIQUIDATION OF DISSOLUTION. The liquidation of
dissolution of the Corporation proposed by an Interested Party.
(e) RECLASSIFICATION OR RECAPITALIZATION. The
reclassification of securities, recapitalization of the Corporation or
other transaction that has the effect of increasing the proportionate
share of any class of outstanding securities of the Corporation or any
of its subsidiaries beneficially owned (as hereinafter defined) by an
Interested Party or of otherwise diluting the position of any
shareholder of the Corporation in comparison with the position of an
Interested Party.
(f) OTHER TRANSACTIONS. Any other transactions or series of
transactions that is similar in purpose or effect to those referred to
in clauses (a) through (e) of this Section 1.
This voting requirement shall apply even though no vote, or a lesser percentage
vote, may be required by law, by any other provision of these Articles of
Incorporation or otherwise. The term "business combination", as used in this
Article, means any of the transactions referred to in clauses (a) though (f) of
this Section 1.
2. FAIR PRICE REQUIREMENT. The fair price requirement will be
satisfied if the consideration to be received in the business combination by the
holders of shares of the Corporation's Common Stock and Serial Preferred Stock,
and by the Corporation or any of its subsidiaries, as the case may be, meets the
following tests:
(a) AMOUNT OF CONSIDERATION TO BE RECEIVED BY SHAREHOLDERS. If any
holder of the shares of the Corporation's Common Stock or Serial Preferred
Stock, other than an Interested Party, is to receive consideration in the
business combination for any of the shares, the aggregate amount of cash and
fair market value of any other consideration to be received per share may not be
less than the sum of --
(1) the greatest of (i) the highest per share price,
including commissions, paid by the Interested Party for any shares of
the same class or series during the two-year period ending on the date
of the most recent purchase by the Interested Party of any such
shares, (ii) the highest sales price reported for shares of the same
class or series traded on a national securities exchange or in the
over-the-counter market during the one-year period preceding the first
public announcement of the proposed business transaction or (iii) in
the case of Serial Preferred Stock, the amount of the per share
liquidation preference; plus
(2) interest on the per share price calculated at the rate
of ten percent (10%) per annum, compounded annually from the date the
Interested Party first became an Interested Party until the business
combination is consummated, less the per share amount of cash
dividends payable to holders of record on record dates in the interim,
up to the amount of such interest.
For purposes of this clause (a) per share amounts will be adjusted for any stock
dividend, stock split or similar transaction.
(b) FORM OF CONSIDERATION TO BE RECEIVED BY SHAREHOLDERS. The
consideration to be received by holders of shares of the Corporation's Common
Stock or Serial Preferred Stock must be in cash or in the same form as was
previously paid by the Interested Party for shares of the same class or
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series; if the Interested Party previously paid for such shares with different
forms of consideration, the consideration to be received by the holders of the
shares must be in cash or in the same form as was previously paid by the
Interested Party for the largest number of shares previously acquired by it. The
provisions of this clause (b) are not intended to diminish the aggregate amount
of cash and fair market value of any other consideration that any holder of
shares of the Corporation's Common Stock or Serial Preferred Stock is otherwise
entitled to receive upon the liquidation or dissolution of the Corporation,
under the terms of any contract with the Corporation or an Interested Party, or
otherwise.
(c) CONSIDERATION TO BE RECEIVED BY THE CORPORATION OR ANY OF ITS
SUBSIDIARIES. If the Corporation or any of its subsidiaries is to receive
consideration in the business combination, the consideration to be received must
be fair to the Corporation or its subsidiaries, as determined by the continuing
directors (as hereinafter defined).
3. OTHER CONDITIONS. The other conditions will be satisfied if, from
the time the Interested Party became an Interested Party until the completion of
the business combination, each of the following has at all times been and
continues to be true:
(a) CONTINUING DIRECTORS. The Corporation's Board of Directors has
included at least five continuing directors. The term "continuing
director," used in this Article, means an individual who (i) either was a
director of the Corporation at the time the Interested Party became an
Interested Party or was subsequently nominated or elected by the other
continuing directors and (ii) is not an affiliate or associate (as
hereinafter defined) of the Interested Party. All actions required or
permitted to be taken by the continuing directors under this Article shall
be taken by the unanimous written consent of all continuing directors or by
the vote of a majority of the continuing directors at a meeting convened
upon such notice as would be required for a meeting of the full Board of
Directors.
(b) NO ACQUISITION OF ADDITIONAL SHARES. The Interested Party has not
become the beneficial owner (as hereinafter defined) of any additional
shares of Common Stock or Serial Preferred Stock of the Corporation, except
(i) as part of the transaction that resulted in the Interested Party
becoming an Interested Party, (ii) upon conversion of securities previously
acquired by it or (iii) pursuant to a stock dividend or stock split.
(c) NO SPECIAL BENEFITS TO THE INTERESTED SHAREHOLDER. The Interested
Party has not received, directly or indirectly, the benefit (except
proportionately as a shareholder) of any loan, advance, guaranty, pledge,
or other financial assistance, tax credit or deduction or other benefit
from the Corporation or any of its subsidiaries.
(d) PROXY STATEMENT. A proxy or information statement describing the
business combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations under it (or any
subsequent provisions replacing that Act and the rules and regulations under it)
has been mailed at least 30 days prior to the completion of the business
combination to the holders of all outstanding shares of the Corporation entitled
to vote in election of Directors, whether or not shareholder approval of the
business combination is required. If deemed advisable by the continuing
directors, the proxy or information statement shall contain a recommendation by
the continuing directors as to the advisability (or inadvisability) of the
business combination and/or an opinion by an investment banking firm, selected
by the continuing directors and retained at the expense
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of the Corporation, as to the fairness (or unfairness) of the business
combination to holders of shares of the Corporation's Common Stock or Serial
Preferred Stock other than the Interested Party.
(e) NO OMISSION OR REDUCTION OF DIVIDENDS. Except to the extent
approved by the continuing directors, there has been no (i) failure to pay in
full, when and as due, any dividends on the Corporation's Serial Preferred Stock
or (ii) failure to pay or reduction in the annual rate of dividends on the
shares of the Corporation's Common Stock, whether directly or indirectly through
a reclassification, recapitalization or otherwise.
(f) NO CHANGE IN BUSINESS OR CAPITAL STRUCTURE. Except to the extent
approved by the continuing directors, there has been no material change in (i)
the nature of the business conducted by the Corporation and its subsidiaries or
(ii) the capital structure of the Corporation, including but not limited to any
change in the number of outstanding shares of Common Stock, the number and
series of any outstanding shares of Serial Preferred Stock and the types and
aggregate principal amount of any outstanding debt securities, except for
changes resulting from the exercise of previously issued options, warrants or
other rights, the conversion of previously issued shares, the issuance of
previously authorized debt securities and the mandatory redemption of retirement
of debt securities in accordance with their terms.
4. DEFINITIONS: As used in this Article TENTH:
(a) "AFFILIATE"; "ASSOCIATE". The terms "affiliate" and "associate"
have the meanings ascribed to them in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on May 4,
1984.
(b) "BENEFICIAL OWNERSHIP". A person or entity is deemed to
"beneficially own" shares if, directly or indirectly through any contract,
understanding, arrangement, relationship or otherwise, that person or entity has
or shares (i) the power to vote or to dispose, or to direct the voting or
disposition, of the shares or (ii) the right to acquire the shares pursuant to
any contract or arrangement, upon the exercise of any option, warrant or right,
upon the conversion of any other shares, upon revocation of a trust or
otherwise. The person or entity is also deemed to "beneficially own" shares that
are beneficially owned by affiliates and associates of that person or entity.
(c) "BUSINESS COMBINATION". The term "business combination" has the
meaning ascribed to it in Section 1 of this Article.
(d) "CONTINUING DIRECTORS". The term "continuing directors" has the
meaning ascribed to it in clause (a) of Section 3 of this Article.
(e) "FAIR MARKET VALUE". The term "fair market value" means (i), in
the case of securities listed on a national securities exchange or on the
National Association of Securities Dealers, Inc.'s National Market, the highest
closing sales price reported during the 30-day period immediately preceding the
date in question for securities of the same class or series traded on such
exchange or market, or, if such securities are not listed on any exchange or
such National Market, the highest closing bid quotation with respect to such
securities during the 30-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automatic
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<PAGE> 16
Quotation System or any system then in use, or, if no quotations are available,
the value determined by the continuing directors, and (ii) in the case of other
securities and of consideration other than securities or cash, the value
determined by the continuing directors.
(f) "INTERESTED PARTY". The term "Interested Party" means any person
or entity that, together with its affiliates and associates, is at the time of,
or has been within the two-year period immediately prior to, the consummation of
a business combination the beneficial owner of shares having at least 20% of the
aggregate voting power of all outstanding shares of the Corporation entitled to
vote in elections of Directors. The term "Interested Party," for purposes of the
requirements and conditions of this Article, also includes the affiliates and
associates of the Interested Party. Notwithstanding the foregoing, the
Corporation and its subsidiaries, and any profit-sharing, employee stock
ownership, employee pension, or other employee benefit plan of the Corporation
or any subsidiary, are not deemed to be "Interested Parties".
5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED PARTY. Nothing
contained in this Article shall be construed to relieve any Interested Party
from any fiduciary obligations imposed by law.
6. AMENDMENT, REPEAL, ETC. Notwithstanding any other provision of
these Amended Articles of Incorporation or the Regulations of the Corporation
(and notwithstanding the fact that a lesser percentage may be required by law,
these Amended Articles of Incorporation or the Regulations of the Corporation),
the affirmative vote of the holders of 80% of the outstanding shares of the
Corporation entitled to vote in elections of Directors, voting together as a
single class, shall be required to amend or repeal, or adopt any provisions
inconsistent with, this Article Tenth.
ELEVENTH: These Amended Articles supersede the existing Articles of
Incorporation of the Corporation and any and all subsequent amendments thereto.
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[THOMPSON HINE & FLORY LLP LETTERHEAD]
EXHIBIT 5
February 16, 1999
Jo-Ann Stores, Inc.
5555 Darrow Road
Hudson, Ohio 44236
Re: Jo-Ann Stores, Inc. Registration Statement on
Form S-8 -- 1998 Incentive Compensation Plan
Ladies and Gentlemen:
Jo-Ann Stores, Inc. ("Jo-Ann Stores") is filing with the Securities and
Exchange Commission a Registration Statement on Form S-8 (the "Registration
Statement") for the registration, under the Securities Act of 1933, as amended,
of 1,800,000 Class A Common Shares, without par value per share, of Jo-Ann
Stores ("Class A Common Shares") and 2,300,000 Class B Common Shares, without
par value per share, of Jo-Ann Stores ("Class B Common Shares") to be issued
from time to time pursuant to the terms of the Jo-Ann Stores, Inc. 1998
Incentive Compensation Plan (the "Plan").
Item 601 of Regulation S-K and the instructions to Form S-8 require
that an opinion of counsel concerning the legality of the securities to be
registered be filed as an exhibit to a Form S-8 registration statement if the
securities are original issue shares. This opinion is provided in satisfaction
of that requirement as it relates to the Registration Statement.
In rendering this opinion, we have examined (a) the Amended Articles of
Incorporation and Amended Regulations of Jo-Ann Stores, (b) the Plan, and (c)
such records and documents as we have deemed advisable in order to render this
opinion. As a result of the foregoing, we are of the opinion that:
(1) Jo-Ann Stores is a corporation validly organized and
existing and in good standing under the laws of the State of Ohio.
(2) When issued, the Class A Common Shares and the Class B
Common Shares which are the subject of the Registration Statement will
be legally issued, fully paid, and non-assessable.
We hereby consent to the use and filing of this opinion in connection
with the Registration Statement.
Very truly yours,
/s/ Thompson Hine & Flory LLP
<PAGE> 1
Exhibit 23 (a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 15, 1998
included in Jo-Ann Stores, Inc.'s Form 10-K for the year ended January 31, 1998
and to all references to our Firm included in this registration statement.
Arthur Andersen LLP
Cleveland, Ohio
February 16, 1999
