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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 13, 1997.
REGISTRATION NO. 333-12735
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
POST-EFFECTIVE AMENDMENT NO. 1 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SIGNATURE INNS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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Indiana 7011 35-1426996
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
250 East 96th Street, Suite 450, Indianapolis, Indiana 46240
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE
OF BUSINESS)
John D. Bontreger, 250 East 96th Street, Suite 450, Indianapolis, Indiana 46240
(317) 581-1111
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER
THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
==========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF OFFERING PRICE PER AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C>
$1.70 Cumulative Convertible Preferred
Stock, Series A...................... $20.00 $46,000,000 $15,703.45(1)
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Common Stock(2)............................
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Non-Cumulative Preferred Stock, Series One
Purchase Rights(2).......................
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(1) Estimated solely for the purpose of computing the registration fee. The
registration fee was calculated and paid at the time of the original filing
of this Registration Statement based on an assumed offering of 3,795,000
shares of Common Stock at a maximum offering price of $13.00 per share.
(2) Such indeterminate number of shares as are issuable on conversion of the
Preferred Stock, including such additional shares as may be issuable as a
result of adjustments to the conversion price. Additionally, certain
Non-Cumulative Preferred Stock, Series One Purchase Rights (the "Rights")
will be evidenced by the certificates for the shares of Common Stock and
trade automatically with the Common Stock. Any value attributable to the
Rights will be reflected in the market price of the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 9(a),
MAY DETERMINE.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of the Company provide that the Company shall
indemnify any person who has 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 by or in
the right of the Company) by reason of the fact that he is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, 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 by him in connection with such 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 Company, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful, except that no indemnification shall be made in relation
to matters as to which he shall be adjudged in such action, suit or proceeding
to be liable for negligence or misconduct in the performance of duty to the
Company. The termination of any action, suit or proceeding by judgment, order,
settlement, 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 Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
The Company 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 Company 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 Company, or is or was serving at the request of the Company as a director,
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
such 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 Company, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Company.
Any such director, officer, employee or agent who has been wholly
successful, on the merits or otherwise, with respect to any claim, suit or
proceeding of the character described herein shall be entitled to
indemnification as of right. Except as provided in the preceding sentence, any
indemnification hereunder shall be made at the discretion of the Company, but
only if the Board of Directors, acting by a quorum consisting of directors who
are not parties to or who have been wholly successful with respect to such
claim, action, suit or proceeding, shall find that the director, officer,
employee or agent has met the standards of conduct set forth in the first
sentence of this section. The directors may request independent legal counsel
(who may be regular counsel of the Company) to deliver to it their written
opinion as to whether such director, officer, employee or agent has met such
standards.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
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ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses to be borne by the Company in connection with the
Offering are as follows:
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Registration Fee-Securities and Exchange Commission.............................. $ 16,000
NASD Fee......................................................................... 5,000
NASDAQ Filing Fees............................................................... 40,000
Printing......................................................................... 220,000
Legal Fees and Expenses.......................................................... 400,000
Accounting Fees and Expenses..................................................... 120,000
Directors and Officers Insurance Premium......................................... 192,000
Blue Sky Expenses and Fees....................................................... 8,000
Mailing, Postage, Certificates and Transfer Agent Fees........................... 20,000
Miscellaneous Expenses........................................................... 79,000
----------
Total Expenses................................................................. $1,100,000
==========
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ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The information set forth under the heading "Certain Transactions" in the
Prospectus included in Part I of this Registration Statement is incorporated
herein by reference. The management purchase transactions described therein were
consummated in reliance on the exemption from registration set forth in Section
4(2) of the Securities Act of 1933, as amended.
ITEM 27. EXHIBITS
The exhibits to this Registration Statement required under Item 601 of
Regulation S-B are attached hereto together with an index of exhibits, listing
the exhibits in the same order as called for under Item 601(b) of Regulation
S-B.
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company 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 Company 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 indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Company hereby undertakes that
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this Registration Statement as of that
time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
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SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe it meets all of the
requirements for filing on Form SB-2 and has duly caused this Post-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Indianapolis, Indiana on
the 13th day of February, 1997.
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SIGNATURE INNS, INC.
By: /s/ JOHN D. BONTREGER
------------------------------
John D. Bontreger, President,
Chief Executive Officer and
Chairman of the Board
ATTEST:
/s/ DAVID R. MILLER
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David R. Miller, Secretary
Date: February 13, 1997
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
Registration Statement has been signed below by the following persons on behalf
of the Company and in the capacities indicated on February 13, 1997.
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/s/ JOHN D. BONTREGER
---------------------------------
John D. Bontreger, President,
Chief Executive Officer and
Chairman of the Board
/s/ MARK D. CARNEY
---------------------------------
Mark D. Carney, Vice President
Finance, Chief Financial Officer
and Director
/s/ BO L. HAGOOD
---------------------------------
Bo L. Hagood, Vice President
Hotel Operations and Director
/s/ DAVID R. MILLER
---------------------------------
David R. Miller, Secretary and Director
/s/ MARTIN D. BREW
---------------------------------
Martin D. Brew, Treasurer and
Controller
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/s/ WILLIAM S. WATSON
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William S. Watson, Director
/s/ RICHARD L. RUSSELL
------------------------------
Richard L. Russell, Director
/s/ STEPHEN M. HUSE
------------------------------
Stephen M. Huse, Director
/s/ RICHARD E. SHANK
------------------------------
Richard E. Shank, Director
/s/ GEORGE A. MORTON
------------------------------
George A. Morton, Director
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INDEX TO EXHIBITS
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EXHIBIT
NO.
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1. Form of Underwriting Agreement
*3.1 Amended and Restated Articles of Incorporation of Signature Inns, Inc.
*3.2 Code of By-Laws of Signature Inns, Inc.
4.1 Specimen Common Stock Certificate
4.2 Specimen Preferred Stock Certificate
4.3 Form of Rights Agreement adopted by the Board of Directors of Signature Inns, Inc.
5. Legality Opinion of Johnson Smith Pence Densborn Wright and Heath.
8. Tax Opinion of Johnson Smith Pence Densborn Wright and Heath
10.1 Form of Contract for Purchase of Real Estate to be used in connection with the
Purchase Transactions.
10.2 Employment Agreement between the Company and John D. Bontreger.
10.3 Employment Agreement between the Company and Mark D. Carney.
10.4 Employment Agreement between the Company and Bo L. Hagood.
10.5 Employment Agreement between the Company and David R. Miller.
10.6 Employment Agreement between the Company and Martin D. Brew.
10.7 The Company's 1996 Equity Incentive Plan.
21. Subsidiaries of the Company.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 The consent of Johnson Smith Pence Densborn Wright & Heath is included in its
opinion filed as Exhibit 5 hereto.
27. Financial Data Schedule.
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* This amended exhibit is filed herewith. All other exhibits have been
previously filed.
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Exhibit 3.1
AMENDED AND RESTATED
--------------------
ARTICLES OF INCORPORATION
-------------------------
OF
--
SIGNATURE INNS, INC.
--------------------
Signature Inns, Inc., an Indiana corporation, (hereinafter referred to
as the "Corporation"), acting pursuant to the provisions of the Indiana Business
Corporation Law of 1986, as amended (hereinafter referred to as the "Act"),
hereby amends and restates its Articles of Incorporation, as follows:
ARTICLE I
---------
Name
----
The name of the Corporation is Signature Inns, Inc.
ARTICLE II
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Purposes
--------
The purposes for which the Corporation is formed are:
SECTION 1. To administer, implement and manage a franchise program for
the licensing of others (including affiliated limited partnerships) to use the
Corporation's trade names, trademarks, service marks and proprietary information
in connection with the construction and operation of hotels and motels; and to
build, own, manage and operate hotels and motels under the Corporation's
distinctive trade names, trademarks, service marks and proprietary information,
or under other trade names, trademarks, service marks and proprietary
information.
SECTION 2. To acquire by purchase, exchange, lease, hire or otherwise,
and to hold, own, improve, develop, subdivide, plat, manage, operate, license,
lease as lessee, let as lessor, sell, convey, or mortgage, either alone or in
conjunction with others, real estate of every kind, character and description,
and wheresoever situated, and any interest therein.
SECTION 3. To purchase, construct, fabricate, assemble, process, sell,
trade, distribute and otherwise deal in industrial, commercial, residential,
hotel or motel buildings, and buildings, and structures of every kind and
character, and all kinds of furnishings, fixtures, appliances, equipment,
accessories and other products and materials of every description.
<PAGE> 2
SECTION 4. To engage in a general investment business, including the
investment in, and the acquisition, holding and disposal of, and the dealing
with, property of every kind and character, real, personal or mixed, tangible
and intangible, and irrespective of location.
SECTION 5. To acquire by purchase, exchange, lease, hire or otherwise,
and to hold, mortgage, pledge, hypothecate, exchange, sell, deal with and
dispose of, alone or in syndicates or otherwise in conjunction with others,
stocks, bonds, notes, evidences of debt or ownership, contracts, options,
commodities, securities, and other personal property, tangible or intangible, of
every kind, character and description, wheresoever situated, and any interest
therein.
SECTION 6. To purchase, take, receive, subscribe for or otherwise
acquire, and to own, hold, vote, use, employ, sell, mortgage, lend, pledge or
otherwise dispose of, and to otherwise use and deal in and with, shares or other
interests in, or obligations of, other individuals, domestic or foreign
corporations, associations or partnerships, for whatever purpose or purposes
formed or operating, and direct or indirect obligations of any government,
state, territory, governmental district or any municipality or of any
instrumentality thereof.
SECTION 7. To acquire by purchase, exchange, lease, hire or otherwise,
all or any part of the goodwill, rights, property and business of any person,
entity, partnership, association, or corporation; to pay for the same in cash,
stock, bonds, or other obligations of the Corporation, or otherwise; to hold,
utilize, deal with in any manner, and dispose of the whole, or any part, of the
rights and property so acquired, and to assume in connection therewith any
liabilities of such person, entity, partnership, association, or corporation;
and to conduct in any lawful manner the whole, or any part, of the business thus
acquired.
SECTION 8. To make any guaranty, or act as surety with respect to any
obligation, stock, dividend, security, indebtedness, interest, contract or other
undertaking.
SECTION 9. To enter into any lawful arrangement for sharing profits,
union of interest, reciprocal association, partnership, joint venture, syndicate
or cooperative association with any corporation, association, partnership,
individual or other legal entity or group, for the carrying on of any business
which the Corporation is authorized to carry on, or any business or transaction
deemed necessary, convenient, expedient, or incidental to the carrying out of
any of the purposes or powers of the Corporation.
SECTION 10. To borrow or raise monies for any of the purposes of the
Corporation, and, from time to time, without limitation as to amount, to draw,
make, accept, endorse, execute and issue promissory notes, drafts, bills and
exchange, warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment thereof,
and the interest thereon, by mortgage on, or pledge, conveyance or assignment in
trust of, the whole or any part of the assets of the Corporation, real, personal
or mixed, including contract rights, whether at the time owned or thereafter
acquired, and to sell, pledge or otherwise dispose of such securities or other
obligation of the Corporation for its corporate purposes.
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SECTION 11. To acquire by purchase, exchange or otherwise, and to hold,
sell, transfer, reissue or cancel the shares of its own capital stock, or any
securities or other obligations of the Corporation, in the manner and to the
extent now or hereafter permitted by the laws of the State of Indiana, except
that the Corporation shall not use its funds or other assets for the purchase of
its own shares of stock if the capital of the Corporation is or would thereby
become impaired, and except that shares of its own capital stock beneficially
owned by the Corporation shall not be voted directly or indirectly by the
Corporation.
SECTION 12. To enter into, make, perform and carry out, or cancel and
rescind, contracts and other obligations for any lawful purposes pertaining to
the business of the Corporation.
SECTION 13. To act in any state or nation, in which the Corporation may
lawfully act, as principal or as agent or representative for any individual,
association, corporation, or legal entity, respecting business which the
Corporation is authorized to transact.
SECTION 14. In general, to carry on all other business which is or may
be appropriately, expediently or conveniently carried on as a part of, or in
connection with, any of the foregoing purposes of the Corporation; to have the
capacity to act possessed by natural persons; and, subject to any limitations or
restrictions imposed by law or by these Articles of Incorporation to have and
exercise all of the general rights, privileges and powers permitted to be had
and exercised by the provisions of the Act.
SECTION 15. To perform all lawful acts permitted by the Act, as
amended, and any future Acts amendatory thereof or supplemental thereto.
SECTION 16. It is the intention that the purposes specified in the
foregoing clauses of this Article II shall, except where otherwise expressed in
said Article II, be in no wise limited or restricted by reference to or
inference from the terms of any clause of this or any other article in this
certificate, but that the purpose specified in each of the clauses of this
Article shall be regarded as independent purposes. It is also the intention that
the foregoing clauses shall be construed both as purposes and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers which the Corporation may have under the
present or future laws of the State of Indiana.
ARTICLE III
-----------
Period Of Existence
-------------------
The period during which the Corporation shall continue is perpetual.
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ARTICLE IV
Resident Agent And Principal Office
SECTION 1. RESIDENT AGENT. The name and address of the Corporation's
Resident Agent for service of process is John D. Bontreger, 250 East 96th
Street, Suite 450, Indianapolis, Indiana 46240.
SECTION 2. PRINCIPAL OFFICE. The post office address of the principal
office of the Corporation is 250 East 96th Street, Suite 450, Indianapolis,
Indiana 46240.
ARTICLE V
---------
Authorized Shares
-----------------
Section 1. Number and Classes of Shares:
---------- -----------------------------
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 18,513,514 shares, of which
13,513,514 shares shall be Common Stock and of which 5,000,000 shares shall be
Preferred Stock.
A. The number of authorized shares which the Corporation designates as
having par value is none.
B. The number of authorized shares which the Corporation designates as
without par value is 18,513,514.
ARTICLE VI
----------
Terms of Authorized Shares
--------------------------
SECTION 1. DESIGNATION. The authorized shares of the Corporation shall
be of two classes and kinds; Common Stock and Preferred Stock, and further
sub-classifications, series, designations, voting powers, preferences and
relative participating, optional or other special rights, and qualifications,
limitations or restrictions of each of the above classes of stock and other
general provisions relating thereto shall be as follows:
(a) COMMON STOCK. The Common Stock of the Corporation shall be
voting stock without par value and shall otherwise be issued subject to
the terms applicable to Common Stock of the Corporation as set forth in
this Article VI.
(b) PREFERRED STOCK. The Preferred Stock of the Corporation
shall be subdivided into such sub-classifications and series and shall
have such designations, preferences, conversion rights, cumulative,
relative, participating, optional or other rights, including voting
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rights, qualifications, limitations or restrictions thereof as shall be
determined by the Board of Directors.
(I) SUB-CLASSIFICATIONS OF PREFERRED STOCK. The
Preferred Stock of the Corporation shall be comprised
of two sub-classifications, Cumulative Preferred
Stock and Non-Cumulative Preferred Stock, each of
which shall have such attributes, designations,
preferences, conversion rights, cumulative, relative,
participating, optional or other rights, including,
without limitation, voting rights, qualifications,
limitations, or restrictions as shall be determined
by the Board of Directors.
(II) Cumulative Preferred Stock.
--------------------------
(i) SERIES. The Cumulative Preferred Stock
may be issued from time to time in one or more
series. All shares of Cumulative Preferred Stock
shall be of equal rank and shall be identical, except
in respect of the matters that may be fixed by the
Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other
shares of such series. Subject to the provisions of
Sections 1(b)(II)(ii) through 1(B)(II)(vi), both
inclusive, which provisions shall apply to all
Cumulative Preferred Stock, the Board of Directors
hereby is authorized to cause such shares to be
issued in one or more series and with respect to each
such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent
provided in clause (B) of this Section) the
following:
(A) The designation of the series,
which may be by distinguishing number,
letter or title;
(B) The authorized number of shares
of the series, which number the Board of
Directors may (except where otherwise
provided in the creation of the series)
increase or decrease from time to time
before or after the issuance thereof (but
not below the number of shares thereof then
outstanding);
(C) The dividend rate or rates of
the series, including the means by which
such rates may be established (the "Annual
Dividend Rate");
(D) The date or dates from which
dividends shall accrue and be cumulative,
the initial dividend payment date (the
"Initial Dividend Date") and the dates on
which and the period or periods for which
dividends, if declared, shall be payable
(the "Dividend Payment
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Dates"), including the means by which such
dates and periods may be established;
(E) The redemption rights and price
or prices, if any, for shares of the series;
(F) The terms and amount of the
sinking fund, if any, for the purchase or
redemption of shares of the series;
(G) 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
(the "Liquidation Preference");
(H) Whether the shares of the series
shall be convertible into Common Stock or
shares of any other class and, if so, the
conversion rate or rates or price or prices,
any adjustments thereof and all other terms
and conditions upon which such conversion
may be made;
(I) Restrictions (in addition to
those set forth in Section 1(b)(II)(i)(B))
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 Amended and Restated Articles of
Incorporation fixing, with respect to each such series, the
matters described in clauses (A) through (I) of this Section
1(b)(II)(i) and is authorized to take such actions with
respect thereto as may be required by law in order to effect
such amendments.
(ii) Dividends.
---------
(A) The holders of Cumulative
Preferred Stock of each series, in
preference to the holders of Common Stock
and of any other class of shares ranking
junior to the Cumulative Preferred Stock,
including, without limitation, the
Non-Cumulative Preferred Stock, shall be
entitled to receive out of any funds legally
available for Cumulative Preferred Stock,
when and as declared by the Board of
Directors, dividends in cash at the rate or
rates for such series fixed in accordance
with the provisions of Section
1(b)(II)(i)(C) and no more, payable on the
dates fixed for such series. Such dividends
shall accrue and 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
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dividends shall be paid upon or declared or
set apart for any series of the Cumulative
Preferred Stock for any dividend period
unless at the same time (1) a like
proportionate dividend for the dividend
periods terminating on the same or any
earlier date, ratably in proportion to the
respective dividend rates fixed therefor,
shall have been paid upon or declared or set
apart for all series of the Cumulative
Preferred Stock then issued and outstanding
and entitled to receive such dividend.
(B) So long as any series of
Cumulative Preferred Stock shall be
outstanding, no dividend, except a dividend
payable in Common Stock or other shares
ranking junior to the Cumulative Preferred
Stock, shall be paid or declared or any
distribution made, except as aforesaid, in
respect of the Common Stock or any other
shares ranking junior to the Cumulative
Preferred Stock, nor shall any Common Stock
or any other shares ranking junior to the
Cumulative Preferred Stock be purchased,
retired or otherwise acquired by the
Corporation, except out of the proceeds of
the sale of Common Stock or other shares of
the Corporation ranking junior to the
Cumulative Preferred Stock received by the
Corporation subsequent to the date of first
issuance of Cumulative Preferred Stock of
any series, unless:
(1) All accrued and unpaid
dividends on all outstanding series
of Cumulative Preferred Stock,
including the full dividends for all
current dividend periods, shall have
been declared and paid or a sum
sufficient for payment thereof set
apart; and
(2) There shall be no
arrearages with respect to the
redemption of Cumulative Preferred
Stock of any series.
(iii) Liquidation Rights.
------------------
(A) In the event of any voluntary or
involuntary liquidation, dissolution or
winding up of the affairs of the
Corporation, the holders of Cumulative
Preferred Stock of any series shall be
entitled to receive in full out of the
assets of the Corporation, before any amount
shall be paid or distributed among the
holders of Common Stock or any other shares
ranking junior to the Cumulative Preferred
Stock, the amounts fixed with respect to the
shares of such series in accordance with
Section 1(b)(II)(i)(G), plus 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
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Corporation. In the event the net assets of
the Corporation legally available therefor
are insufficient to permit the payment upon
all outstanding shares of Cumulative
Preferred Stock of the full preferential
amount to which they are respectively
entitled, then such net assets shall be
distributed ratably upon all outstanding
Cumulative Preferred Stock in proportion to
the full preferential amount to which each
such share is entitled.
(B) After payment to the holders of
Cumulative Preferred Stock of the full
preferential amounts as aforesaid, the
holders of Cumulative Preferred Stock, as
such, shall have no right or claim to any of
the remaining assets of the Corporation.
(C) The merger or consolidation of
the Corporation into or with any other
corporation, the merger of any other
corporation into it, or the sale, lease or
conveyance of all or substantially all the
assets of the Corporation, shall not be
deemed to be a dissolution, liquidation or
winding up for the purposes of this Section.
(iv) Voting Rights.
-------------
(A) LIMITATION. The holders of
Cumulative Preferred Stock shall have no
voting rights, except as provided in Section
1(b)(II)(iv)(B) or as required by law.
(B) Election of Directors.
---------------------
(1) If, and so often as,
the Corporation shall fail to
declare and pay dividends on any
series of Cumulative Preferred Stock
at the time outstanding at the rate
specified for such series for six
(6) Dividend Payment Dates (whether
or not consecutive) the holders of
the Cumulative Preferred Stock,
voting separately as a class, shall
be entitled to elect, as herein
provided, two members of the Board
of Directors of the Corporation and
the holders of Common Stock, voting
separately as a class, shall elect
the remaining directors; provided,
however, that the holders of the
Cumulative Preferred Stock shall
exercise such special voting rights
only at the next annual meeting of
shareholders or any special meeting
of shareholders held in lieu thereof
after the sixth such paymant date at
which directors are elected and at
which the holders of not less than
one-third of the shares of
Cumulative Preferred Stock then
outstanding are present in person or
by
8
<PAGE> 9
proxy; and provided further that the
special class voting rights provided
for in this Section
1(b)(II)(iv)(B)(1) shall remain
vested in the holders of Cumulative
Preferred Stock until all accrued
and unpaid dividends on the
Cumulative Preferred Stock then
outstanding shall have been declared
and paid, whereupon the holders of
Cumulative Preferred Stock shall be
divested of their special voting
rights in respect of subsequent
elections of directors, subject to
the revesting of such special class
voting rights in the event above
specified in this Section
1(b)(II)(iv)(B)(1). The directors
elected by the holders of the
Cumulative Preferred Stock shall not
be removable by vote of directors,
and shall be removable by vote of
the holders of the Cumulative
Preferred Stock, voting separately
as a class, only for cause.
(2) At any meeting at which
the holders of shares of Cumulative
Preferred Stock shall be entitled to
elect directors, the holders of
one-third of the Cumulative
Preferred Stock at the time
outstanding, present in person or by
proxy, shall be sufficient to
constitute a quorum, and the vote of
holders of a majority of such shares
so present at any such meeting at
which there shall be such a quorum
shall be sufficient to elect the two
members of the Board of Directors
which the holders of Cumulative
Preferred Stock are entitled to
elect as herein provided. Nothing in
this Section 1(b)(II)(iv)(B)(2)
shall prevent any change otherwise
permitted in the total number of or
classifications of directors of the
Corporation nor require the
resignation of any director elected
other than pursuant to this Section
1(b)(II)(iv)(B)(2). Notwithstanding
any classification of the other
directors of the Corporation, any
directors elected by the holders of
Cumulative Preferred Stock shall be
elected annually for terms expiring
at the next succeeding annual
meeting of shareholders, subject to
earlier termination pursuant to the
provisions of subparagraph
1(b)(II)(iv)(B)(3) below.
(3) Upon any divesting of
the special class of voting rights
of the holders of the Cumulative
Preferred Stock in respect of
elections of directors as provided
in this Section 1(b)(II)(iv)(B), the
terms of office of all directors
then in office elected by such
holders shall terminate immediately.
If the office of any director
elected by such holders, voting as a
class, becomes vacant by reason of
death, resignation, removal
9
<PAGE> 10
from office or otherwise, the
remaining director elected by such
holders may elect a successor who
shall hold office for the unexpired
term in respect of which such
vacancy occurred.
(C) REQUIRED CONSENT. The
affirmative vote or consent of the holders
of two-thirds of the shares of Cumulative
Preferred Stock at the time outstanding,
voting or consenting separately as a class,
given in person or by proxy either in
writing or at a meeting called for the
purpose, shall be necessary to effect any
one or more of the following:
(1) Any amendment,
alteration or repeal, whether by
merger, consolidation or otherwise,
of any of the provisions of the
Amended and Restated Articles of
Incorporation or of the By-Laws of
the Corporation which affects
adversely the preferences or voting
or other rights of the holders of
Cumulative Preferred Stock;
provided, however, that the
amendment of the Amended and
Restated Articles of Incorporation
or the By-Laws so as to: (a)
authorize, create or change the
authorized or outstanding number of
shares of Cumulative Preferred Stock
or of any shares ranking on a parity
with or junior to the Cumulative
Preferred Stock or (b) change the
number or classification of
directors shall not be deemed to
affect adversely the preferences or
voting or other rights of the
holders of Cumulative Preferred
Stock;
(2) The authorization,
creation or increase in the
authorized number of any shares, or
of any security convertible into
shares, in either case ranking
senior to the Cumulative Preferred
Stock; or
(3) The purchase or
redemption of less than all of the
Cumulative Preferred Stock then
outstanding except in accordance
with a stock purchase offer made to
all holders of record of Cumulative
Preferred Stock, unless all
dividends on all Cumulative
Preferred Stock then outstanding for
all previous Dividend Payment Dates
and for the dividend period ending
on the next Dividend Payment Date
shall have been declared and paid or
provision made for payment thereof.
(v) REDEMPTION PROCEDURES. Notice of any
proposed redemption of Cumulative Preferred Stock of
any series shall be given by the Corporation by
mailing a copy of such notice, at least thirty (30)
days, and not more than sixty (60) days, prior to the
date fixed for such redemption, to the holders of
10
<PAGE> 11
record of the Cumulative Preferred Stock to be
redeemed, at their respective addresses then
appearing upon the books of the corporation. In case
of the redemption of a part only of the Cumulative
Preferred Stock of any series at the time
outstanding, the shares to be redeemed shall be
selected by lot or pro rata, as the Board of
Directors may determine. The Board of Directors shall
have full power and authority, subject to the
limitations and provisions herein contained, to
prescribe the manner in which, and the terms and
conditions upon which, the shares of the Cumulative
Preferred Stock of any series shall be redeemed from
time to time. On or at any time before the redemption
date specified in such notice, the Corporation shall
deposit in trust, for the account of the holders of
the shares to be redeemed, funds necessary for such
redemption with a bank or trust company in good
standing, (1) organized under the laws of the United
States of America or the State of New York and doing
business in the Borough of Manhattan, City of New
York, or (2) organized under the laws of the United
States of America or of the State of Indiana and
doing business in the City of Indianapolis; and
designated in such notice of redemption. Upon mailing
of the notice of redemption as above provided, or
upon the making of such deposit, whichever is later,
all shares with respect to the redemption of which
such notice and deposit shall have been given and
made shall be deemed to be no longer outstanding for
any purpose, and all rights with respect to such
shares shall thereupon cease and terminate, except
only the right of the holders of the certificates for
such shares to receive, out of the funds so deposited
in trust, from and after the date of such deposit,
the amount payable upon the redemption thereof,
without interest; provided, however, that no right of
conversion (if any) belonging to such shares, if such
right of conversion is, by its terms, to exist for a
period beyond the date of the mailing of such notice
or the making of such deposit, shall be impaired by
the mailing of such notice or the making of such
deposit. At the expiration of seven (7) years after
the date fixed for such redemption, such trust shall
terminate. Any moneys then remaining on deposit with
such bank or trust company shall be deemed abandoned
property under Indiana law, and thereafter the
holders of the certificates for such shares shall
have no claims against such bank or trust company or
the Corporation, but only claims against the State of
Indiana pursuant to Indiana law . Subject to the
limitations of subparagraph 1(b)(II)(iv)(C)(3), the
Corporation may also purchase shares of its
outstanding Cumulative Preferred Stock of any series
at prices not exceeding the current redemption price
thereof. The Corporation shall not, however, purchase
any shares of Common Stock or any other shares
ranking junior to the Cumulative Preferred Stock
unless full dividends at the dividend rate or rates
therefor with respect to all past dividend periods
and the current dividend period in which such
purchase is to be made shall have been paid or
declared and set apart for payment on all shares of
Cumulative Preferred Stock then outstanding and not
then to be redeemed.
11
<PAGE> 12
(vi) General Provisions.
------------------
(A) ACCOUNTANTS' CERTIFICATE OF
ADJUSTMENT. In each case of an adjustment or
readjustment of a conversion price for
Common Stock issuable upon conversion of any
Cumulative Preferred Stock, the Corporation,
at its expense, shall cause independent
certified public accountants of recognized
standing selected by the Corporation (who
shall be the independent certified public
accountants then reviewing or auditing the
books of the Corporation) to compute such
adjustment or readjustment in accordance
herewith and prepare a certificate showing
such adjustment or readjustment, and shall
mail such certificate, by first-class mail,
postage prepaid, to each registered holder
of that Cumulative Preferred Stock, at the
holder's address as shown in the
Corporation's books. The certificate shall
set forth such adjustment or readjustment
and show in detail the facts upon which such
adjustment or readjustment is based.
(B) FRACTIONAL SHARES. No fractional
share of Common Stock shall be issued upon
conversion of any Cumulative Preferred
Stock. In lieu of any fractional share to
which the holder would otherwise be
entitled, the Corporation shall pay cash
equal to the product of such fraction
multiplied by the fair market value of one
share of Common Stock on the date of
conversion, as reasonably determined in good
faith by the Board of Directors.
(C) RESERVATION OF SHARES ISSUABLE
UPON CONVERSION. The Corporation shall at
all times reserve and keep available out of
its authorized but unissued Common Stock:
(i) such number of shares of Common Stock as
may from time to time be required, at such
time, to be issued by the Corporation upon
exercise of all then-exercisable warrants
and options to purchase Common Stock or the
right to convert other convertible
securities into Common Stock, and (ii) such
number of shares of Common Stock as shall
from time to time be sufficient to effect
the conversion of all outstanding
convertible Cumulative Preferred Stock. As a
condition precedent to the taking of any
action which would cause an adjustment to
the conversion price for any series of
convertible Cumulative Preferred Stock, the
Corporation will take such corporate action
as may, in the opinion of its counsel, be
necessary to authorize such number of shares
of Common Stock as shall issuable pursuant
to such adjusted conversion price.
12
<PAGE> 13
(D) NOTICES. Any notice required by
the provisions of this Section 1(b)(II) to
be given to holders of record of Cumulative
Preferred Stock shall be deemed given when
personally delivered to such holder or five
business days after the same has been
deposited in the United States mail,
certified or registered mail, return receipt
requested, postage prepaid, and addressed to
that holder of record at its address
appearing on the books of the Corporation.
(E) PAYMENT OF TAXES. The
Corporation will pay all transfer taxes and
other similar governmental charges (but not
taxes measured by the revenue or income of
the holders of the Cumulative Preferred
Stock) that may be imposed in respect of the
issue or delivery of Common Stock upon
conversion of any convertible Cumulative
Preferred Stock.
(F) NO IMPAIRMENT. The Corporation
shall not amend these Articles of
Incorporation or participate in any
reorganization, recapitalization, transfer
of assets, consolidation, merger,
dissolution, issue or sale of securities or
any other voluntary action, for the purpose
of avoiding or seeking to avoid the
observance or performance of any of the
terms to be observed or performed hereunder
by the Corporation.
(G) STATUS OF CUMULATIVE PREFERRED
STOCK UPON REDEMPTION OR CONVERSION. Any
share of Cumulative Preferred Stock which is
(1) redeemed by the Corporation, (2)
converted in accordance with the express
terms thereof, or (3) otherwise acquired by
the Corporation, shall resume the status of
authorized but unissued Preferred Stock
without designation.
(vii) $1.70 CUMULATIVE CONVERTIBLE PREFERRED
STOCK, SERIES A. There is hereby created an initial
series of Cumulative Preferred Stock designated
"$1.70 Cumulative Convertible Preferred Stock, Series
A" (the "Series A Preferred Stock") which shall be
subject to the provisions of Sections 1(b)(II)(ii)
through 1(b)(II)(vi), both inclusive, applicable to
all Cumulative Preferred Stock and the following:
(A) The authorized number of shares
constituting the Series A Preferred Stock
shall be 2,300,000;
(B) The Annual Dividend Rate for the
Series A Preferred Stock shall be $1.70;
13
<PAGE> 14
(C) Dividends on the Series A
Preferred Stock shall accrue from their date
of issue, the Initial Dividend Date shall be
April 15, 1997, and the Dividend Payment
Dates shall be January 15, April 15, July 15
and October 15 of each year;
(D) All or any part of the Series A
Preferred Stock shall be redeemable by the
Corporation, at any time on or after
February 1, 2000, at the option of the Board
of Directors, at the redemption prices set
forth below:
<TABLE>
<CAPTION>
Period Redemption Premium Price
------------------------------------ ------------------ -------
<S> <C> <C>
February 1, 2000 to January 31, 2001 104.8572% $20.97
February 1, 2001 to January 31, 2002 103.6429% $20.72
February 1, 2002 to January 31, 2003 102.4286% $20.49
February 1, 2003 to January 31, 2004 101.2143% $20.24
February 1, 2004 and thereafter 100.0000% $20.00
</TABLE>
(E) The Liquidation Preference for
the Series A Preferred Stock shall be the
sum of (i) $20.00 per share plus (ii) an
amount equal to all accrued and unpaid
dividends thereon, whether or not declared,
to and including the date full payment shall
be tendered to holders of the Series A
Preferred Stock with respect to such
Liquidation Preference;
(F) The holders of the Series A
Preferred Stock shall have the following
conversion rights (the "Conversion Rights"):
(1) RIGHT TO CONVERT. Each
share of Series A Preferred Stock
shall be convertible, at the option
of the holder thereof, at any time
after the date of issuance of such
Series A Preferred Stock and before
any redemption date in respect
thereof, at the office of the
Corporation or any transfer agent
for the Series A Preferred Stock or
Common Stock, into fully paid and
nonassessable shares of Common
Stock, at the Conversion Price (as
hereafter defined) therefor in
effect at the time of conversion
determined as provided herein.
(2) CONVERSION PRICE. Each
share of Series A Preferred Stock
shall be convertible into the number
of shares of Common Stock that
results from dividing $20.00 by the
Conversion Price, as hereinafter
defined. The Conversion
14
<PAGE> 15
Price as of the original date of
issuance of the Series A Preferred
Stock shall be $9.60 per Share of
Common Stock, subject to adjustment
from time to time as provided
herein. Holders of shares of Series
A Preferred Stock surrendered for
conversion or redemption after the
record date for a dividend payment
and prior to the next succeeding
dividend payment date shall be
entitled to the dividend falling due
on that next succeeding dividend
payment date notwithstanding such
conversion or redemption.
(3) MECHANICS OF
CONVERSION. Any holder of Series A
Preferred Stock shall be entitled to
convert the same into Common Stock
by surrendering the certificate or
certificates therefor, duly
endorsed, at the office of the
Corporation or of any transfer agent
for the Series A Preferred Stock or
Common Stock on a date prior to the
close of business on the day
preceding the date fixed for
redemption of such shares of Series
A Preferred Stock called for
redemption (the "Conversion Date"),
and shall give prior written notice
by mail, postage prepaid, to the
Corporation at such office, that
such holder elects to convert the
same and shall state therein the
number of shares of Series A
Preferred Stock being converted and
the name or names in which the
certificate or certificates for
Common Stock are to be issued. Upon
the Corporations's receipt of notice
of conversion and the holder's
surrender of the certificate or
certificates on the Conversion Date,
the Corporation shall promptly issue
and deliver at such office to such
holder of Series A Preferred Stock
or to the nominee or nominees of
such holder a certificate or
certificates for the number of
shares of Common Stock to which such
holder shall be entitled. Such
Conversion shall be deemed to have
been made immediately prior to the
close of business on the Conversion
Date of the Series A Preferred Stock
to be converted, and the person or
persons entitled to receive the
Common Stock issuable upon such
conversion shall be treated for all
purposes as the record holder or
holders of such Common Stock on such
date.
(4) ADJUSTMENTS FOR STOCK
SPLITS AND COMBINATIONS. If the
Corporation shall at any time or
from time to time after the original
issue date of the Series A Preferred
Stock effect a subdivision or
combination of any outstanding
Common Stock, including a dividend
payable in
15
<PAGE> 16
Common Stock, the Conversion Price
then in effect immediately before
such subdivision or combination
shall be proportionately adjusted by
multiplying the then effective
Conversion Price by a fraction, (i)
the numerator of which shall be the
number of shares of Common Stock
issued and outstanding immediately
prior to such subdivision or
combination, and (ii) the
denominator of which shall be the
number of shares of Common Stock
issued and outstanding immediately
after such subdivision or
combination. The number of shares of
Common Stock outstanding at any time
shall, for the purposes of this
Section 1(b)(II)(vii)(F), include
the number of shares of Common Stock
into which any convertible
securities of the Company, including
the Series A Preferred Stock, may be
converted, or for which any warrant,
option or rights of the Corporation
may be exercised or exchanged. Any
adjustment under this Section
1(b)(II)(vii)(F) shall become
effective at the close of business
on the date the subdivision or
combination becomes effective.
Advance notice of events which would
give rise to an adjustment in the
conversion rate shall be given to
holders of the Series A Preferred
Stock, but failure to give such
notice shall not affect the validity
or effectiveness of such event. No
adjustment of the conversion price
shall be made for the issuance of
shares of Common Stock to employees
pursuant to the Company's or any
subsidiary's stock ownership, stock
option or other benefit plan. No
adjustment of the conversion rate
will be required to be made in any
case until cumulative adjustments
amount to one percent or more of the
conversion price. The Corporation
reserves the right to make such
changes in the conversion rate in
addition to those required in the
foregoing provisions as the
Corporation in its discretion shall
determine to be advisable in order
that certain stock-related
distributions hereafter made by the
Corporation to its shareholders
shall not be taxable.
(5) ADJUSTMENTS FOR OTHER
DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or
from time to time after the original
issue date of the Series A Preferred
Stock shall make or issue, or fix a
record date for the determination of
holders of Common Stock entitled to
receive, a dividend or other
distribution payable in (i)
evidences of indebtedness of the
Corporation, (ii) assets of the
Corporation (other than cash
dividends or distributions paid
16
<PAGE> 17
out of retained earnings), or (iii)
securities of the Corporation other
than Common Stock, then and in each
such event provision shall be made
so that the holders of Series A
Preferred Stock shall receive upon
conversion thereof, in addition to
the number of shares of Common Stock
receivable thereupon, the amount of
such evidences, assets or securities
that they would have received had
they held, on such record date, the
maximum number of shares of Common
Stock into which their Series A
Preferred Stock could then have been
converted. The Corporation reserves
the right to make such changes in
the conversion rate in addition to
those required in the foregoing
provisions as the Corporation in its
discretion shall determine to be
advisable in order that certain
stock- related distributions
hereafter made by the Corporation to
its shareholders shall not be
taxable.
(6) ADJUSTMENTS FOR
RECLASSIFICATION, EXCHANGE OR
SUBSTITUTION. If the Common Stock
issuable upon the conversion of the
Series A Preferred Stock shall be
changed into the same or a different
number of shares of any class or
classes of stock, whether by capital
reorganization, reclassification or
otherwise (other than a subdivision
or combination of shares or stock
dividend provided for above, or a
reorganization, merger,
consolidation or sale of assets
provided for elsewhere in this
Section 1(b)(II)(vii)), then and in
each such event the holders of
Series A Preferred Stock shall have
the right thereafter to convert each
such share into the kind and amounts
of shares of stock and other
securities and property receivable
upon such reorganization,
reclassification or other change, by
holders of the maximum number of
shares of Common Stock into which
such Series A Preferred Stock could
have been converted immediately
prior to such reorganization,
reclassification or change, all
subject to further adjustment as
provided herein.
(7) REORGANIZATION,
MERGERS, CONSOLIDATIONS OR SALES OF
ASSETS OR CAPITAL STOCK. If at any
time or from time to time there
shall be a capital reorganization of
the Common Stock (other than a
subdivision, combination,
reclassification or exchange of
shares provided for elsewhere in
this Section 1(b)(II)(vii)) or a
merger or consolidation of the
Corporation with or into another
corporation, or the sale of all or
substantially all the Corporation's
properties and assets or
17
<PAGE> 18
capital stock to any other person,
then, as a part of such
reorganization, merger,
consolidation or sale, provision
shall be made so that each holder of
the Series A Preferred Stock shall
thereafter be entitled to receive,
upon conversion of the Series A
Preferred Stock, the number of
shares of stock or other securities
or property of the Corporation, or
of the successor corporation
resulting from such merger of
consolidation or sale as though
conversion of the Series A Preferred
Stock had occurred immediately prior
to such event, provided such holder
(x) is not the entity with which the
Company consolidated or into which
the Company merged or which merged
into the Company or to which such
sale or transfer was made, as the
case may be, or an affiliate of such
an entity and (y) failed to exercise
its rights of election, if any, as
to the kind or amount of securities,
cash and other property receivable
upon such consolidation, merger,
sale or transfer. In any such case,
appropriate adjustment shall be made
in the application of the provisions
of this Section 1(b)(II)(vii) with
respect to the rights of the holders
of the Series A Preferred Stock
after the reorganization, merger,
consolidation or sale to the end
that the provisions of this Section
1(b)(II)(vii) (including adjustment
of the Conversion Price then in
effect and the number of shares
purchasable upon conversion of the
Series A Preferred Stock) shall be
applicable after that event as
nearly equivalent as may be
practicable.
(8) ISSUE OF RIGHTS OR
WARRANTS TO SUBSCRIBE FOR COMMON
STOCK AT LESS THAN MARKET VALUE. In
the event the Corporation at any
time or from time to time after the
original issue date of the Series A
Preferred Stock shall make or issue,
or fix a record date for the
determination of holders of Common
Stock entitled to receive, rights or
warrants to subscribe for shares of
Common Stock at a price less than
the then current market price for
the Common Stock (the "Subscription
Price"), then, and in each such
instance, the Conversion Price shall
be reduced as of the opening of
business on the date of such issue
of rights or warrants to a price
equal to the Subscription Price.
(9) NO SINKING FUND. The
Series A Preferred Stock shall not
be subject to any sinking fund for
the purchase or redemption of
shares.
18
<PAGE> 19
(III) Non-Cumulative Preferred Stock.
------------------------------
(i) SERIES. The Non-Cumulative Preferred
Stock may be issued from time to time in one or more
series. All shares of Non-Cumulative Preferred Stock
shall be of equal rank and shall be identical, except
for matters that may be fixed by the Board of
Directors as hereinafter provided, and each share of
a series shall be identical with all other shares of
such series. All shares of Non-Cumulative Preferred
Stock shall be junior to all shares of Cumulative
Preferred Stock with respect to dividends and
Liquidation Preference. The Board of Directors hereby
is authorized to cause such shares to be issued in
one or more series and with respect to each such
series to determine and fix prior to the issuance
thereof (and thereafter, to the extent provided in
clause (B) of this Section) the following:
(A) The designation of the series,
which may be by distinguishing number,
letter or title;
(B) The authorized number of shares
of the series, which number the Board of
Directors may (except where otherwise
provided in the creation of the series)
increase or decrease from time to time
before or after the issuance thereof (but
not below the number of shares thereof then
outstanding);
(C) The Annual Dividend Rate;
(D) The Initial Dividend Date and
the Dividend Payment Dates, including the
means by which such dates and periods may be
established;
(E) The redemption rights and price
or prices, if any, for shares of the series;
(F) The terms and amount of the
sinking fund, if any, for the purchase or
redemption of shares of the series;
(G) The Liquidation Preference;
(H) Whether the shares of the series
shall be convertible into Common Stock or
shares of any other class and, if so, the
conversion rate or rates or price or prices,
any adjustments thereof and all other terms
and conditions upon which such conversion
may be made;
19
<PAGE> 20
(I) Restrictions (in addition to
those set forth in Section 1(b)(III)(i)(B))
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 Amended and Restated Articles of
Incorporation fixing, with respect to each such series, the
matters described in clauses (A) through (I) of this Section
1(b)(III)(i) and is authorized to take such actions with
respect thereto as may be required by law in order to effect
such amendments.
(ii) NON-CUMULATIVE PREFERRED STOCK, SERIES
ONE. There is hereby created an initial series of
Non-Cumulative Preferred Stock designated
"NonCumulative Preferred Stock, Series One" ("Series
One Preferred Stock") which shall be subject to the
provisions of Sections 1(b)(III)(i) applicable to all
Non-Cumulative Preferred Stock and which shall also
be subject to the following special provisions:
(A) AUTHORIZED SHARES. The number of
shares constituting the Series One Preferred
Stock shall be 90,000.
( B) DIVIDENDS. Subject to the prior
rights of the holders of any other shares of
Preferred Stock of the Corporation ranking
prior to the shares of Series One Preferred
Stock with respect to dividends, each holder
of one one-hundredth (1/100) of a share (a
"Unit") of Series One Preferred Stock shall
be entitled to receive, when, as and if
declared by the Board of Directors out of
funds legally available for that purpose,
such dividends as may be declared from time
to time by the Board of Directors in its
discretion, in the same kind and in an
amount per Unit equal to the per share
amount of the dividends (whether payable in
cash or stock or other securities or
property) declared, if any, on shares of
Common Stock of the Corporation. In the
event the Corporation shall at any time
after the date of issuance of the Series One
Preferred Stock (x) increase by way of a
stock split or similar transaction the
number of outstanding shares of Common Stock
(except by way of a stock dividend received
by holders of Units and shares of Common
Stock in accordance with this Section
1(b)(III)(ii)), (y) subdivide the
outstanding shares of Common Stock or (z)
combine the outstanding shares of Common
Stock into a smaller number of shares, then
in each such case the amount per Unit of any
dividend payable in accordance with the
preceding sentence of this Section
1(B)(III)(ii) shall be adjusted by
multiplying the amount of such dividend by a
fraction, (i) the numerator of which shall
be the number of shares of Common Stock
issued and outstanding
20
<PAGE> 21
immediately prior to such split, subdivision
or combination, and (ii) the denominator of
which shall be the number of shares of
Common Stock issued and outstanding
immediately after such split, subdivision or
combination.
(C) VOTING RIGHTS. The holders of
Units of Series One Preferred Stock shall
have the following voting rights.
(1) Each Unit of Series One
Preferred Stock shall entitle the
holder thereof to one vote on all
matters submitted to a vote of the
shareholders of the Corporation. In
the event the Corporation shall at
any time after the date of issuance
of the Series One Preferred Stock
(x) increase by way of a stock split
or similar transaction the number of
outstanding shares of Common Stock
(except by way a stock dividend
received by holders of Units and
shares of Common Stock in accordance
with Section 1(b)(III)(ii) above),
(y) subdivide the outstanding shares
of Common Stock or (z) combine the
outstanding shares of Common Stock
into a smaller number of shares,
then in each such case the number of
votes per Unit to which holders of
Units of Series One Preferred Stock
were entitled immediately prior to
such event shall be adjusted by
multiplying such number by a
fraction the numerator of which
shall be the number of shares of
Common Stock outstanding immediately
after such event and the denominator
of which shall be the number of
shares of Common Stock that were
outstanding immediately prior to
such event.
(2) Except as otherwise
provided herein or required by law,
the holders of Units of Series One
Preferred Stock and the holders of
shares of Common Stock shall vote
together as one class on all matters
submitted to a vote of shareholders
of the Corporation.
(3) Except as set forth
herein or required by law, holders
of Units of Series One Preferred
Stock shall have no special voting
rights and their consent shall not
be required (except to the extent
they are entitled to vote with
holders of shares of Common Stock as
set forth herein or as otherwise
required by law) for the taking of
any corporate action.
(D) REACQUIRED SHARES. Any Units of
Series One Preferred Stock purchased or
otherwise acquired by the Corporation in any
21
<PAGE> 22
manner whatsoever shall be retired and
canceled promptly after the acquisition
thereof. All such Units shall, upon their
cancellation, become authorized but unissued
one one-hundredth fractional shares of
Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be
created by resolution or resolutions of the
Board of Directors, subject to the
conditions and restrictions on issuance set
forth herein.
(E) LIQUIDATION, DISSOLUTION OR
---------------------------
WINDING UP.
----------
(1) In the event of any
voluntary or involuntary
dissolution, liquidation or winding
up of the affairs of the Corporation
and after payment or provision for
payment of the debts and other
liabilities of the Corporation,
including any prior claims of the
holders of any other series of
Preferred Stock, the holders of each
Unit of Series One Preferred Stock
shall be entitled to share in any
assets remaining, ratably with the
holders of each share of Common
Stock. In the event the Corporation
shall at any time after the date of
issuance of the Series One Preferred
Stock (x) increase by way of a stock
split or similar transaction the
number of outstanding shares of
Common Stock (except by way of a
stock dividend received by holders
of Units and shares of Common Stock
in accordance with Section
1(b)(III)(ii)), (y) subdivide the
outstanding shares of Common Stock
or (z) combine the outstanding
shares of Common Stock into a
smaller number of shares, then in
each such case the amount per Unit
of any distribution in accordance
with this Section 1(d)(ii) shall be
adjusted by multiplying the amount
of such distribution by a fraction,
(i) the numerator of which shall be
the number of shares of Common Stock
issued and outstanding immediately
prior to such split, subdivision or
combination, and (ii) the
denominator of which shall be the
number of shares of Common Stock
issued and outstanding immediately
after such split, subdivision or
combination.
(2) If upon the merger or
consolidation of the Corporation
into or with any other corporation,
or the merger of any other
corporation into it, or if the
capital stock of the Corporation is
to be converted into or exchanged
for cash or other property or
securities of a corporation other
than the Corporation, the allocation
of any such cash, securities or
other property into which shares of
capital stock of the
22
<PAGE> 23
Corporation are to be converted or
for which it is to be exchanged
shall be made in accordance with the
provisions of paragraph (A) of this
Section 1(b)(III)(ii) as if such
merger or consolidation were a
liquidation of the Corporation.
Nothing herein shall be construed as
requiring or permitting a merger or
consolidation to be treated as a
liquidation for any purpose other
than the allocation provided for in
this Section.
(F) REDEMPTION. The Units of Series
One Preferred Stock shall not be redeemable
at the option of the Corporation or any
holder thereof. Notwithstanding the
foregoing sentence of this Section, the
Corporation may acquire Units of Series One
Preferred Stock in any other manner
permitted by law and the Amended and
Restated Articles of Incorporation and
By-Laws of the Corporation.
(G) CONVERSION. The Series One
Preferred Stock is not convertible into
shares of any other class or series of stock
of the Corporation.
(H) AMENDMENT. The affirmative vote
or consent of the holders of two-thirds of
the shares of Series One Preferred Stock at
the time outstanding, voting or consenting
separately as a class, given in person or by
proxy either in writing or at a meeting
called for the purpose, shall be necessary
to effect any amendment, alteration or
repeal, whether by merger, consolidation or
otherwise, of any of the provisions of the
Amended and Restated Articles of
Incorporation or of the By-Laws of the
Corporation which affects adversely the
preferences or voting or other rights of the
holders of Series One Preferred Stock;
provided, however, that the amendment of the
Amended and Restated Articles of
Incorporation so as to authorize, create or
change the authorized or outstanding number
of shares of Series One Preferred Stock or
of any shares ranking on a parity with or
junior to the Series One Preferred Stock
shall not be deemed to affect adversely the
preferences or voting or other rights of the
holders of Series One Preferred Stock.
(I) FRACTIONAL UNITS/SHARES. The
Series One Preferred Stock may be issued in
Units or other fractions of a share, which
Units or fractions shall entitle the holder
to exercise voting rights, receive
dividends, participate in distributions and
to have the benefit of all other rights of
holders of Units of Series One Preferred
Stock, in proportion to the number of Units
or fractional Units held by such holder.
23
<PAGE> 24
SECTION 2. ISSUANCE OF SHARES. The shares of capital stock of the
Corporation may be issued by the Corporation from time to time at the discretion
of the Board of Directors to such persons for such consideration, including
consideration less than par value, and upon such terms and conditions as it may
determine, subject to the provisions of the Act and these Articles. Such of its
shares as the Corporation may reacquire may be resold or otherwise disposed of
upon such terms and conditions and for such consideration as the Board of
Directors may determine from time to time. The Board of Directors may from time
to time grant or issue options, warrants, or rights to purchase shares of
capital stock of the Corporation upon such terms and conditions and for such
consideration as it shall determine, subject to the provisions of the Act.
SECTION 3. STATED CAPITAL. The amount of the consideration received by
the Corporation, less the amounts allocated to capital surplus, from time to
time, shall be the stated capital of the Corporation. The consideration received
by the Corporation for authorized shares of any class shall, subject to the
provisions of the Act, be allocated to stated capital and to capital surplus by
resolution of the Board of Directors within a period of sixty (60) days after
the issuance of such shares. The stated capital of the Corporation may be
increased from time to time by resolution of the Board of Directors directing a
transfer from capital or earned surplus.
SECTION 4. DIVIDENDS. Dividends and other distributions (hereinafter
referred to as "Dividends") shall be payable with respect to shares of the
capital stock of the Corporation or classes or series thereof when and as
declared by the Board of Directors and subject to the relative rights,
limitations, restrictions and qualifications of the shares. Dividends shall be
paid out of the unreserved and unrestricted capital or earned surplus of the
Corporation or other sources legally available therefor, and may be paid in cash
or property. Such dividends may be declared in respect of the capital stock of
the Corporation from time to time to be paid by the Corporation in its own
authorized but unissued shares of such capital stock or in treasury shares of
capital stock out of any unreserved or unrestricted capital or earned surplus or
any other legally available source.
SECTION 5. DISSOLUTION DISTRIBUTION ON COMMON STOCK. In the event of
any voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the holders of the outstanding shares of common stock shall be
entitled, after due payment or provisions for payment of the debts and other
liabilities of the Corporation and after and subject to such distributions as
may be required with respect to any shares of Preferred Stock outstanding (if
any), to share ratably share for share, in the remaining net assets of the
Corporation.
SECTION 6. VOTING RIGHTS OF COMMON STOCK. The holder of each share of
the Common Stock of the Corporation, subject to the provisions of the Act, shall
be entitled to one (1) vote for each share of such stock standing in his name on
the books of the Corporation at all meetings of the shareholders of the
Corporation.
24
<PAGE> 25
ARTICLE VII
Requirements Prior To Doing Business
------------------------------------
The Corporation will not commence business until consideration of the
value of at least $1,000 (one thousand dollars) has been received for the
issuance of shares.
ARTICLE VIII
------------
Directors
---------
SECTION 1. NUMBER OF DIRECTORS. The number of Directors of the
Corporation shall not be less than two (2) nor more than nine (9), as may be
specified from time to time by the Code of ByLaws of the Corporation. If and
whenever the Code of By-Laws of the Corporation does not contain a provision
specifying the number of Directors, the number shall be six (6). Subject to the
rights of the holders of any series of Preferred Stock then outstanding, the
Code of By-Laws of the Corporation may provide that the Directors shall be
divided into two (2) or more classes whose terms of office shall expire at
different times, but no terms shall continue longer than three (3) years.
Directors need not be Shareholders of the Corporation.
SECTION 2. NAMES AND POST OFFICE ADDRESSES OF THE DIRECTORS: The names
and addresses of the current Directors of the Corporation are as follows:
<TABLE>
<CAPTION>
Name Business Address City State
- ---- ---------------- ---- -----
<S> <C> <C> <C>
John D. 250 East 96th Street, Indianapolis IN 46240
Bontreger Suite 450
David R. 250 East 96th Street, Indianapolis IN 46240
Miller Suite 450
George A. 250 East 96th Street, Indianapolis IN 46240
Morton Suite 450
Richard E. 250 East 96th Street, Indianapolis IN 46240
Shank Suite 450
Richard L. 250 East 96th Street, Indianapolis IN 46240
Russell Suite 450
Stephen M. 250 East 96th Street, Indianapolis IN 46240
Huse Suite 450
</TABLE>
25
<PAGE> 26
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Mark D. 250 East 96th Street, Indianapolis IN 46240
Carney Suite 450
Bo L. 250 East 96th Street, Indianapolis IN 46240
Hagood Suite 450
William S. 250 East 96th Street, Indianapolis IN 46240
Watson Suite 450
</TABLE>
SECTION 3. QUALIFICATIONS OF DIRECTORS (IF ANY): The qualifications of
Directors of the Corporation shall be prescribed by the By-Laws of the
Corporation.
SECTION 4. VACANCIES. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, newly created directorships
resulting from any increase in the authorized number of Directors or any
vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be filled
by a majority vote of the Directors then in office, and Directors so chosen
shall hold office for a term expiring at the Annual Meeting of Shareholders at
which the term of the class to which they have been elected expires.
SECTION 5. REMOVAL. Subject to the rights of the holders of any series
of Preferred Stock then outstanding, any Director, or the entire Board of
Directors, may be removed by the shareholders from office at any time, but only
for cause and only by the affirmative vote of the holders of at least 80% of the
voting power of all of the shares of the Corporation entitled to vote generally
in the election of Directors, voting together as a single class. In addition,
the Directors are hereby authorized to adopt in the Code of By-Laws a procedure
for the removal of Directors with or without cause.
SECTION 6. AMENDMENT, REPEAL. Notwithstanding anything contained in the
Articles of Incorporation or the Code of By-Laws of the Corporation to the
contrary (and notwithstanding the fact that a lesser percentage may be specified
by law, in these Articles of Incorporation or the Code of By-Laws of the
Corporation), the affirmative vote of the holders of at least 80% of the voting
power of all of the shares of the Corporation entitled to vote generally in the
election of Directors, voting together as a single class, shall be required to
alter, amend or repeal this Article VIII.
ARTICLE IX
----------
Incorporator
------------
The name and post office address of the incorporator of the Corporation
is John D. Bontreger, 250 East 96th Street, Suite 450, Indianapolis, Indiana
46240.
26
<PAGE> 27
ARTICLE X
---------
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
-------------------------------------
SECTION 1. AFFAIRS OF CORPORATION. The Board of Directors shall manage
and conduct the affairs of the Corporation and shall have the power to adopt
by-laws for the regulation of its business and to amend its by-laws.
SECTION 2. MEETINGS OF SHAREHOLDERS. Meetings of the shareholders of
the Corporation shall be held at such place, within or without the State of
Indiana, as may be specified in the respective notices, or waivers of notice,
thereof.
SECTION 3. ISSUANCE OF STOCK BY CORPORATION. The Board of Directors
shall have the authority to fix from time to time the amount of consideration
for which shares may be issued by the Corporation.
SECTION 4. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The
Corporation shall indemnify any person who has 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 by or in the right of the Corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, 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 by him in connection with
such 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
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, except that no
indemnification shall be made in relation to matters as to which he shall be
adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty to the Corporation. The termination of any
action, suit or proceeding by judgment, order, settlement, 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
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation 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 Corporation 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 Corporation, or is or was serving at the request of the Corporation as a
director, 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 such action or suit if he acted in good faith and in a manner he
27
<PAGE> 28
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation.
Any such director, officer, employee or agent who has been wholly
successful, on the merits or otherwise, with respect to any claim, suit or
proceeding of the character described herein shall be entitled to
indemnification as of right. Except as provided in the preceding sentence, any
indemnification hereunder shall be made at the discretion of the Corporation,
but only if the Board of Directors, acting by a quorum consisting of directors
who are not parties to or who have been wholly successful with respect to such
claim, action, suit or proceeding, shall find that the director, officer,
employee or agent has met the standards of conduct set forth in the first
sentence of this section. The directors may request independent legal counsel
(who may be regular counsel of the Corporation) to deliver to it their written
opinion as to whether such director, officer, employee or agent has met such
standards.
If several claims, issues or matters of action are involved, any such
person may be entitled to indemnification as to some matters even though he is
not so entitled to others.
The Corporation may advance expenses incurred in defending a civil or
criminal action to, or where appropriate may, at its expense undertake the
defense of, any such director, officer, employee or agent upon receipt of an
undertaking by or on behalf of such person to repay such expenses if it should
ultimately be determined that he is not entitled to indemnification under this
section.
The provisions of this section shall be applicable to claims, actions,
suits or proceedings made or commenced before or after the adoption hereof and
whether arising from acts or omissions occurring before or after the adoption
hereof.
The indemnification provided by this section shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote or stockholders or disinterested
directors as a matter of law, 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 a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, 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 such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of this section.
28
<PAGE> 29
ARTICLE XI
----------
Provisions for Certain Business Combinations
--------------------------------------------
Section 1. Vote Required.
-------------
CLAUSE (A). HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In
addition to any affirmative vote required by law or these Articles of
Incorporation, and except as otherwise expressly provided in Section 2 of this
Article XI:
(1) Any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (A) any Interested Shareholder (as
hereinafter defined), or (B) any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Shareholder; or
(2) Any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets, of the Corporation or any Subsidiary, having an aggregate Fair Market
Value of $1,000,000 or more; or
(3) The issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Shareholder or any Affiliate
of any Interested Shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of $1,000,000
or more; or
(4) The adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested Shareholder; or
(5) Any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Shareholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Shareholder or any Affiliate of any
Interested Shareholder; shall require the affirmative vote of the holders of at
least 80% of the voting power of the then outstanding shares of stock of the
Corporation entitled to vote generally in election of directors (the "Voting
Stock"), voting together as a single class (it being understood that for
purposes of this Article XI, each share of the Voting Stock shall have the
number of votes granted to it pursuant to these Articles of Incorporation and
the Act, as amended). Such affirmative vote shall be required notwithstanding
the fact that no vote may be required, or that a lesser percentage may be
specified, by law or in any agreement with any national securities exchange or
otherwise.
29
<PAGE> 30
CLAUSE (B). DEFINITION OF "BUSINESS COMBINATION." The term
"Business Combination" as used in this Article XI shall mean any transaction
which is referred to in any one or more of paragraphs (1) through (5) of Clause
(a) of this Section 1 of this Article XI.
SECTION 2. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section
1 of this Article XI shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law and any other provision of these Amended Articles of
Incorporation, if all of the conditions specified in either of the following
Clauses (a) and (b) are met:
CLAUSE (A). APPROVAL BY CONTINUING DIRECTORS. The Business
Combination shall have been approved by a majority of the Continuing Directors
(as hereinafter defined).
CLAUSE (B). PRICE AND PROCEDURAL REQUIREMENTS. All of the
following conditions shall have been met:
(1) The aggregate amount of the cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share by holders
of Common Stock in such Business Combination shall be at least equal to the
highest of the following:
(A) The highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
interested Shareholders for any shares of Common Stock acquired by it (i) within
the two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or (ii) in the
transaction in which it became an Interested Shareholder, whichever is higher;
(B) The Fair Market Value per share of the Common
Stock on the Announcement Date or on the date of which the Interested
Shareholder became an Interested Shareholder (such latter date is referred to in
this Article XI as the "Determination Date"), whichever is higher; and
(C) The price per share equal to the Fair Market
Value per share of Common Stock determined pursuant to Clause (b)(1)(B) above,
multiplied by the ratio of (i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of Common Stock acquired by it within the
two-year period immediately prior to the Announcement Date to (ii) the Fair
Market Value per share of Common Stock on the first day in such two-year period
upon which the Interested Shareholder acquired any shares of Common Stock.
(2) The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of shares of any other class
of outstanding Voting Stock shall be at least equal to the
30
<PAGE> 31
highest of the following (it being intended that the requirements of this Clause
(b)(2) shall be required to be met with respect to every class of outstanding
Voting Stock whether or not the Interested Shareholder has previously acquired
any shares of a particular class of Voting Stock):
(A) The highest per share price (including any
brokerage commissions, transfer fees and soliciting dealer's fees) paid by the
Interested Shareholder for any shares of such class of Voting Stock acquired by
it (i) within the two-year period immediately prior to the Announcement Date or
(ii) in the transaction in which it became an Interested Shareholder, whichever
is higher;
(B) The highest preferential amount per share to
which the holders of shares of such class of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation;
(C) The Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the Determination Date, whichever is
higher; and
(D) The price per share equal to the Fair Market
Value per share of such class of Voting Stock determined pursuant to Clause
(b)(2)(C) above, multiplied by the ratio of (i) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealer's
fees) paid by the Interested Shareholder for any shares of such class of Voting
Stock acquired by it within the two-year period immediately prior to the
Announcement Date to (ii) the Fair Market Value per share of such class of
Voting Stock on the first day in such two-year period upon which the Interested
Shareholder acquired any shares of such class of Voting Stock;
(3) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common Stock) shall be
in cash or in the same form as the Interested Shareholder has previously paid
for shares of such class of Voting Stock. If the Interested Shareholder has paid
for shares of any class of Voting Stock with varying forms of consideration, the
form of consideration for such class of Voting Stock shall be either cash of the
form used to acquire the largest number of shares of such class of Voting Stock
previously acquired by it.
(4) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination: (A)
except as approved by a majority of the Continuing Directors, there shall have
been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any then outstanding
Preferred Stock; (B) there shall have been (i) no reduction in the annual rate
of dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Continuing Directors, and (ii) an increase in such annual rate or dividend as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the Common Stock, unless the
failure so to increase such annual rate is approved by a majority of the
Continuing Directors; and (C) such Interested Shareholder shall have not become
the beneficial owner
31
<PAGE> 32
of any additional shares of Voting Stock except as part of the transaction which
results in such Interested Shareholder becoming an Interested Shareholder.
(5) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as a Shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation (or any Subsidiary of the
Corporation), whether in anticipation of or in connection with such Business
Combination or otherwise.
(6) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
Shareholders of the Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).
Section 3. Certain Definitions. For the purposes of Article XI:
--------- -------------------
CLAUSE (A). A "person" shall include any individual, firm,
corporation or other entity. When two or more persons act as a partnership,
limited partnership, syndicate or group for the purpose of acquiring voting
stock of the Corporation, such partnership, syndicate or group shall be deemed a
"person."
CLAUSE (B). "Interested Shareholder" shall mean any person
(other than the Corporation or any Subsidiary) who or which:
(1) Is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or
(2) Is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the then
outstanding Voting Stock; or
(3) Is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned, by any Interested Shareholder,
if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
"Interested Shareholder" shall not mean any person who, but for this exception,
would be deemed an Interested Shareholder on May 19, 1987.
32
<PAGE> 33
CLAUSE (C). A person shall be a "beneficial owner" of any
Voting Stock:
(1) Which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or
(2) Which such person or any of its Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding; or
(3) Which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
CLAUSE (D). For the purpose of determining whether a person is
an Interested Shareholder pursuant to Clause (b) of this Section 3 of this
Article XI, the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through applications of Clause (c) of this Section 3
of this Article XI, but shall not include any other shares of Voting Stock which
may be issuable pursuant to any agreement, arrangement or understanding, or upon
exercises of conversion rights, warrants or options, or otherwise.
CLAUSE (E). "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
February 28, 1987.
CLAUSE (F). "Subsidiary" means any corporation of which a
majority of any class of equity security is owned directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in Clause (b) of this Section 3 of this Article
XI, the term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
CLAUSE (G). "Continuing Director" means any member of the
Board of Directors of the Corporation (the "Board") who is unaffiliated with the
Interested Shareholder and was a member of the Board prior to the date that the
Interested Shareholder became an Interested Shareholder, and any successor of a
Continuing Director who is unaffiliated with the Interested Shareholder and is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
CLAUSE (H). "Fair Market Value" means:
33
<PAGE> 34
(1) In the case of stock, the highest closing sale price
during the 30-day period immediately preceding the date in question of a share
of such stock on the Composite Tape for New York Stock Exchange-Listed Stock, or
if such stock is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 on which such stock is listed, or, if such stock is not listed on any
such exchange, the highest closing bid quotation with respect to a share of such
stock during the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or any then
in use, or if no such quotation is available, the fair market value of a share
of such stock as determined by the Board in good faith; and
(2) In the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by the Board
in good faith.
CLAUSE (I). In the event of any Business Combination in which
the Corporation survives, the phrase "other consideration to be received" as
used in Clauses (b)(1) and (2) of Section 2 of this Article XI shall include the
shares of Common Stock and/or other shares of any other class of outstanding
Voting Stock by the holders of such shares.
SECTION 4. POWERS OF THE BOARD OF DIRECTORS. A majority of the
directors of the Corporation shall have the power and duty to determine for the
purposes of this Article XI, on the basis of information known to them after
reasonable inquiry, (a) whether a person is an Interested Shareholder, (b) the
number of shares of Voting Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another and (d) whether the assets which
are the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value of
$1,000,000 or more.
SECTION 5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED
SHAREHOLDER. Nothing contained in this Article XI shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.
SECTION 6. AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions
of these Articles of Incorporation or the Code of By-Laws of the Corporation
(and notwithstanding the fact that a lesser percentage may be specified by law,
in these Articles of Incorporation or the Code of By-Laws of the Corporation),
the affirmative vote of the holders of 80% or more of the voting power of the
shares of the then outstanding Voting Stock, voting together as a single class,
shall be required to amend or repeal, or adopt provisions inconsistent with,
this Article XI of these Articles of Incorporation.
34
<PAGE> 35
IN WITNESS WHEREOF, the undersigned, being the Secretary of the
Corporation, executes these Articles of Incorporation and certifies to the truth
of the facts herein stated, this 20th day of January, 1997.
---------------------------------
(Written Signature)
David R. Miller, Secretary
---------------------------------
(Printed Signature)
35
<PAGE> 1
Exhibit 3.2
AMENDED AND RESTATED
--------------------
CODE OF BY-LAWS
---------------
OF
--
SIGNATURE INNS, INC.
--------------------
(Revised as of January 23, 1997)
<PAGE> 2
AMENDED AND RESTATED
--------------------
CODE OF BY-LAWS
---------------
OF
--
SIGNATURE INNS, INC.
--------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE I - NAME, OFFICES, AND REGISTERED AGENT...................................................................1
Section 1. Name.........................................................................................1
Section 2. Registered Office............................................................................1
Section 3. Registered Agent.............................................................................1
ARTICLE II - SEAL, RECORDS, AND ACCOUNTING........................................................................1
Section 1. Seal.........................................................................................1
Section 2. Records......................................................................................1
Section 3. Inspection...................................................................................2
Section 4. Financial Statements.........................................................................2
Section 5. Fiscal Year..................................................................................3
Section 6. Accounting Method............................................................................3
ARTICLE III - MEETINGS OF SHAREHOLDERS............................................................................3
Section 1. Place of Meetings............................................................................3
Section 2. Annual Meetings..............................................................................3
Section 3. Special Meetings.............................................................................3
Section 4. Notice of Meetings...........................................................................3
Section 5. Quorum for Meetings..........................................................................4
Section 6. Organization of Meetings.....................................................................4
Section 7. Order of Business at Meeting.................................................................4
Section 8. Voting at Meetings...........................................................................4
Section 9. Inspectors for Voting at Meetings............................................................5
Section 10. Voting Lists................................................................................5
Section 11. Vote by Consent in Writing..................................................................5
ARTICLE IV - DIRECTORS............................................................................................5
Section 1. Number, Qualifications, Election and Term of Office..........................................5
Section 2. Place of Meetings............................................................................6
Section 3. Annual Meetings..............................................................................6
Section 4. Regular Meetings.............................................................................6
Section 5. Special Meetings.............................................................................7
Section 6. Quorum for Meetings..........................................................................7
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Section 7. Organization of Meetings.....................................................................7
Section 8. Order of Business at Meetings................................................................7
Section 9. Voting at Meetings...........................................................................7
Section 10. Removal of Directors........................................................................7
Section 11. Vacancies on Board of Directors.............................................................8
Section 12. Compensation................................................................................8
Section 13. Meetings May be Attended by Electronic Voice Communication..................................8
Section 14. Written Consent.............................................................................8
Section 15. Directors Conflicts of Interest.............................................................8
Section 16. Committees of Directors.....................................................................9
ARTICLE V - OFFICERS.............................................................................................11
Section 1. Number......................................................................................11
Section 2. Election, Term of Office, and Qualifications................................................11
Section 3. Subordinate Officers........................................................................11
Section 4. Removal.....................................................................................11
Section 5. The President...............................................................................11
Section 6. The Vice Presidents.........................................................................11
Section 7. The Treasurer...............................................................................12
Section 8. Assistant Treasurers........................................................................12
Section 9. Secretary...................................................................................12
Section 10. Assistant Secretaries......................................................................12
Section 11. Salaries...................................................................................13
Section 12. Vacancies..................................................................................13
ARTICLE VI - RESIGNATIONS........................................................................................13
Section 1. Resignations................................................................................13
ARTICLE VII - INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES...............................................13
Section 1. Actions by Third Parties....................................................................13
Section 2. Actions By or In the Right of the Corporation...............................................13
Section 3. Indemnification as a Matter of Right or Discretion..........................................14
Section 4. Multiple Claims.............................................................................14
Section 5. Advancement of Expenses.....................................................................14
Section 6. Claims to Which this Article Applies........................................................14
Section 7. Indemnification by this Article not Exclusive...............................................14
Section 8. Insurance...................................................................................14
Section 9. Indemnification for Liabilities under the Federal Securities Laws...........................15
Section 10. Notice of Indemnification..................................................................15
ARTICLE VIII - CONTRACTS.........................................................................................15
Section 1. Authorization of and Execution of Contracts.................................................15
Section 2. Indebtedness................................................................................15
Section 3. Checks, Drafts, Similar Payment Orders, and Notes...........................................16
Section 4. Deposits....................................................................................16
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ARTICLE IX - SHARES AND DIVIDENDS................................................................................16
Section 1. Number of Shares............................................................................16
Section 2. Certificates for Shares.....................................................................16
Section 3. Transfer of Shares..........................................................................16
Section 4. Fixing of Record Dates......................................................................17
Section 5. Lost, Destroyed or Mutilated Share Certificates.............................................17
Section 6. Notice of Shares Issued.....................................................................17
Section 7. Declaration and Amount of Dividends.........................................................17
Section 8. Stock Dividends.............................................................................17
ARTICLE X - WAIVER OF NOTICE.....................................................................................18
Section 1. Waiver of Notice............................................................................18
ARTICLE XI - EMERGENCY BY-LAWS...................................................................................18
Section 1. Emergency...................................................................................18
Section 2. Provisions Regarding Directors During Emergency.............................................18
Section 3. Emergency Power.............................................................................18
Section 4. Binding Effect..............................................................................18
ARTICLE XII - PROVISIONS FOR CERTAIN BUSINESS COMBINATIONS.......................................................19
Section 1. Vote Required...............................................................................19
Section 2. When Higher Vote Is Not Required............................................................20
Section 3. Certain Definitions.........................................................................22
Section 4. Powers of the Board of Directors............................................................24
Section 5. No Effect on Fiduciary Obligations of Interested Shareholder................................24
Section 6. Amendment, Repeal, etc......................................................................24
ARTICLE XIII - AMENDMENT OF BY-LAWS..............................................................................24
Section 1. Amendments..................................................................................24
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED
--------------------
CODE OF BY-LAWS
---------------
OF
--
SIGNATURE INNS, INC.
--------------------
Signature Inns, Inc., a corporation organized and existing under the
laws of the State of Indiana, adopted the following Code of By-Laws effective
January 23, 1997:
ARTICLE I
---------
NAME, OFFICES, AND REGISTERED AGENT
-----------------------------------
SECTION 1. NAME. The name of the Corporation is Signature Inns, Inc.
("the Corporation").
SECTION 2. REGISTERED OFFICE. The street address and location of the
registered office of the Corporation is 250 East 96th Street, Suite 450,
Indianapolis, Indiana 46240. The Board of Directors of the Corporation may from
time to time establish other offices of the Corporation or branches of the
Corporation's business at whatever place or places as the Board of Directors
deems advisable.
SECTION 3. REGISTERED AGENT. The name of the registered agent of the
Corporation is John D. Bontreger, and the business office of the registered
agent is 250 East 96th Street, Suite 450, Indianapolis, Indiana 46240.
ARTICLE II
----------
SEAL, RECORDS, AND ACCOUNTING
-----------------------------
SECTION 1. SEAL. The Board of Directors may adopt a corporation seal
which is circular in form and has the name of the Corporation inscribed on it.
Provided, however, the use of a corporate seal or an impression thereof shall
not be required upon, and shall not affect the validity of any instrument
whatsoever.
SECTION 2. RECORDS. The Corporation shall keep as permanent records the
minutes of the meetings and consent resolutions of its shareholders and
directors; shall keep a permanent record of all actions taken by a committee of
the Board of Directors in place of the Board of Directors on behalf of the
Corporation; shall maintain appropriate accounting records and shall keep at its
principal office an original or duplicate stock register or transfer book, or,
in case the Corporation employs a stock registrar or transfer agent in this or
any other state, a complete and accurate shareholders' list giving the names and
addresses of all shareholders, in alphabetical order, and the number and classes
1
<PAGE> 6
of shares held by each. The Corporation shall also keep a copy of the following
records at its principal office:
CLAUSE (a). Its articles or restated articles of incorporation
and all amendments to them currently in effect.
CLAUSE (b). Its by-laws or restated by-laws and all amendments
to them currently in effect.
CLAUSE (c). Resolutions adopted by its Board of Directors with
respect to one (1) or more classes or series of shares and fixing their relative
rights, preferences, and limitations, if shares issued pursuant to those
resolutions are outstanding.
CLAUSE (d). The minutes of all shareholders' meetings, and
records of all action taken by shareholders without a meeting, for the past
three (3) years.
CLAUSE (e). All written communications to shareholders
generally within the past three (3) years, including but not limited to the
financial statements furnished to the shareholders for the past three (3) years.
CLAUSE (f). A list of the names and business addresses of its
current directors and officers.
CLAUSE (g). Its most recent annual report delivered to the
Secretary of State.
SECTION 3. INSPECTION. All such books, records and lists of the
Corporation shall be open to inspection and examination during regular business
hours at the Corporation's principal office for all shareholders of the
Corporation who make a demand in good faith and for a proper purpose. The
shareholder shall give the Corporation written notice of the shareholder's
demand at least five (5) business days before the date on which the shareholder
wishes to inspect and copy. The shareholder's demand shall include with
reasonable particularity the shareholder's purpose and the records the
shareholder desires to inspect. A shareholder's agent or attorney, if authorized
in writing, has the same inspection and copying rights as the shareholder
represented.
Section 4. Financial Statements.
---------- ---------------------
CLAUSE (a). Within one hundred twenty (120) days after the
close of each fiscal year, the Corporation shall mail to its shareholders an
annual report containing audited financial statements including a balance sheet
as of the end of the fiscal year, an income statement for that year, and a
statement of changes in shareholders' equity for the year. The annual report
shall contain such other information as is required by applicable state and
federal corporate and securities laws. In addition to the annual report, the
Corporation shall mail periodically to its shareholders such semi-annual or
quarterly reports as the Board of Directors determines and as required by
applicable law. Such reports shall contain unaudited financial statements.
2
<PAGE> 7
CLAUSE (b). When unaudited financial statements are provided
to the shareholders, the financial statements shall be accompanied by a
statement of the President of the Corporation, or the person responsible for the
Corporation's accounting records, stating to the person's reasonable belief
whether the statements were prepared for the Corporation on a basis consistent
with prior years and on the basis of generally accepted accounting principles,
and, if not, describing the basis for preparation and any respects in which the
statements were not prepared on a consistent basis.
SECTION 5. FISCAL YEAR. The fiscal year of the Corporation begins on
January 1 and ends on December 31.
SECTION 6. ACCOUNTING METHOD. Except as otherwise required by law, the
general accounting method of the Corporation is the accrual method of
accounting, except that the Corporation may use one or more of the special
accounting methods, whenever appropriate, for the purpose of reporting.
ARTICLE III
-----------
MEETINGS OF SHAREHOLDERS
------------------------
SECTION 1. PLACE OF MEETINGS. All meetings of the shareholders of the
Corporation shall be held at such place, within or without the State of Indiana,
pursuant to the Articles of Incorporation, and as may be specified in the
respective notices or waivers of notice of such meetings.
SECTION 2. ANNUAL MEETINGS. Absent notice to the contrary, the annual
meetings of the shareholders of the Corporation shall be held at two o'clock in
the afternoon on the third Tuesday of May in each year (or, if that day shall be
a legal holiday, then on the next succeeding business day). At such meeting,
subject to the rights of the holders of any series of preferred stock then
outstanding, the holders of the common stock of the Corporation shall elect a
Board of Directors and transact such other business as may properly come before
the meeting. If an annual meeting has not been called and held for any reason,
such meeting may be held at any time thereafter at a special meeting called for
that purpose. Further, if an annual meeting has not been called and held within
five months after the close of each fiscal year of the Corporation, then any
shareholder may call the meeting. Failure to hold the annual meeting at the
designated time shall not cause any forfeiture or a dissolution of the
Corporation.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may
be called by the President or by the Board of Directors of the Corporation and
shall be called by the President or the Secretary at the request (which is in
writing and which states the purpose or purposes of the meeting) of one or more
shareholders of record holding not less than twenty-five percent (25%) of all
shares of common stock outstanding and entitled by the Articles of Incorporation
to vote on the business proposed to be transacted at such special meeting.
SECTION 4. NOTICE OF MEETINGS. Notice of every meeting of the
shareholders must be in writing and signed by the President, a Vice President,
the Secretary, or an Assistant Secretary of the Corporation. Such notice must
state the purpose or purposes for which the meeting is called, and the day and
hour when and the place where the meeting is to be held, and a copy thereof must
be
3
<PAGE> 8
served, either personally or by mail or telegram, charges prepaid, upon each
holder of common stock and each holder of preferred stock of record entitled to
vote at such meeting, at least ten (10) and not more than sixty (60) days before
the meeting. If mailed or telegrammed, such copy must be directed to each
shareholder at his address as it appears in the records of the corporation,
unless the shareholder has filed with the Secretary a written request that
notices intended for such shareholder be mailed to some other address in which
case the notice must be mailed to the address designated in such request. Such
notice is not required to be given to any shareholder who attends such meeting
in person or by proxy (which proxy sets forth in reasonable detail the purpose
or purposes for which the meeting is called), or who waives notice thereof as
hereinafter provided. Notice of any adjourned meeting need not be given, except
when expressly required by law.
SECTION 5. QUORUM FOR MEETINGS. Unless otherwise provided in the
Articles of Incorporation or in this Code of By-Laws, and subject to provisions
in the Articles of Incorporation regarding a quorum at any meeting at which the
holders of shares of preferred stock shall be entitled to elect directors, the
presence of the holders of record, in person or represented by proxy, of a
majority of the shares of common stock entitled by the Articles of Incorporation
to vote thereat is necessary to constitute a quorum for the transaction of
business at any meeting of shareholders.
SECTION 6. ORGANIZATION OF MEETINGS. At each meeting of the
shareholders, the Chairman of the Board of Directors if there be one, or, in his
absence, the President, or in the absence of both the Chairman and the
President, a chairman chosen by a majority vote of the shareholders present in
person or represented by proxy and entitled to vote thereat shall act as
chairman of the meeting. The Secretary shall act as secretary at each meeting of
shareholders, or in the absence of the Secretary, the Chairman may appoint any
person present to act as secretary of the meeting.
SECTION 7. ORDER OF BUSINESS AT MEETING. The order of business at all
meetings of the shareholders shall be as determined by the chairman of the
meeting, but the order of business to be followed at any meeting at which a
quorum is present may be changed by a majority of the shareholders present in
person or represented by proxy and entitled to vote thereat. At any meeting of
the shareholders, the Robert's Rules of Order shall govern as the result of
parliamentary procedure.
SECTION 8. VOTING AT MEETINGS. Unless otherwise provided by law or in
the Articles of Incorporation, and subject to the rights of the holders of any
series of preferred stock then outstanding, each holder of shares of common
stock of record is entitled at each meeting of the shareholders to one vote for
each share of common stock standing in such shareholder's name on the books of
the Corporation and may vote either in person or by proxy, executed in writing
by the shareholder or a duly authorized attorney in fact. No proxy shall be
valid after eleven months from the date of the proxy's execution unless a longer
time is expressly provided therein. Unless otherwise provided by law or in the
Articles of Incorporation, at all meetings of shareholders, a quorum being
present, all matters shall be decided by the affirmative vote of the holders of
record of at least a majority of the shares of common stock present or
represented at such meeting. Except as otherwise provided by law or in the
Articles of Incorporation or in this Code of By-Laws or unless demanded by a
shareholder present in person or represented by proxy, voting may be viva voce
and need not be by ballot, except in the case of a vote for the election of
directors. Upon a demand by any such shareholder for a vote by ballot on any
question or at the direction of such chairman that a vote by ballot be taken on
any question, such vote must be taken. On a vote by ballot, each ballot must be
4
<PAGE> 9
signed by the shareholder voting, or by his proxy, and the ballot must show the
number of shares voted by such shareholder or proxy.
SECTION 9. INSPECTORS FOR VOTING AT MEETINGS. At each meeting of the
shareholders, the chairman of such meeting may appoint two inspectors of
election to act thereat. The chairman may require that each inspector of
election so appointed, before entering upon the discharge of the inspector's
duties, shall be sworn faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of the inspector's
ability, and the oath so taken shall be subscribed by such inspectors. Such
inspectors of election shall take charge of the polls and after the voting on
any question shall make a certificate of the results of the vote taken.
Inspectors need not be shareholders, and may be directors.
SECTION 10. VOTING LISTS. The officer or agent having charge of the
stock transfer books shall make, at least five days before each election of
directors, a complete list of the shareholders entitled to vote at such
election, arranged in alphabetical order with the address and number of shares
so entitled to vote held by each. Such list shall be on file at the principal
offices of the Corporation and shall be subject to inspection by any
shareholder. Such list shall be produced and kept open at the time and place of
such election and shall be subject to the inspection of any shareholder during
the holding of such election.
SECTION 11. VOTE BY CONSENT IN WRITING. Any action required to be taken
at a meeting of the holders of shares of common stock of a corporation, or any
action which may be taken at a meeting of the holders of shares of common
stock, may be taken without a meeting if, prior to such action, a consent in
writing, setting forth the action so taken, shall be signed by all of the
holders of shares of common stock entitled to vote with respect to the subject
matter thereof, and such written consent is filed with the minutes of the
proceedings of the holders of shares of common stock. Such consent shall have
the same effect as a unanimous vote of holders of shares of common stock.
ARTICLE IV
----------
DIRECTORS
---------
Section 1. Number, Qualifications, Election and Term of Office.
---------- ----------------------------------------------------
CLAUSE (a). All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation managed
under the direction of the Board of Directors as from time to time constituted,
subject to any limitation set forth in the Articles of Incorporation. A majority
of the directors at any time shall be citizens of the United States. Directors
need not be shareholders of the Corporation. The number of directors shall not
be less than two (2) nor more than nine (9). The number of Directors
constituting the current Board of Directors shall be nine (9)persons. The
number of Directors may be increased or decreased from time to time by amendment
to the By-Laws, but no decrease shall have the effect of shortening the term of
any incumbent Director. Subject to the rights of the holders of any series of
preferred stock then outstanding as set forth in the Corporation's Amended and
Restated Articles of Incorporation, at all elections of directors by the
shareholders, the persons receiving the greater number of votes representing
shares of common stock cast shall be directors, the Directors shall be elected
annually at the annual meeting
5
<PAGE> 10
of the shareholders in each year, and shall hold their offices as hereinafter
provided in Section 1, Clause (b), or until their successors are elected and
qualified. Vacancies on the Board of Directors shall be filled by a majority
vote of the Directors then in office; provided, that notice of any increase in
the number of Directors, and the name, address, principal occupation, and other
pertinent information relative to any Director elected by the Board of Directors
to fill any vacancy, shall be given to all shareholders in the next mailing sent
to shareholders following any such increase, or election, as the case may be.
CLAUSE (b). Pursuant to I.C. ss.23-1-33-6 and Article VIII,
Section 1 of the Articles of Incorporation of Signature Inns, Inc., as amended
and restated January 20, 1997, and subject to the rights of the holders of any
series of preferred stock then outstanding, the Board of Directors of the
Corporation shall be divided into three (3) classes of directors.
Commencing with the 1995 annual meeting of the shareholders,
the number of directors in each class shall be as follows:
(i) The first class of directors - three directors
(ii) The second class of directors - three directors
(iii) The third class of directors - three directors
The term of the first class of three (3) directors will
initially expire at the 1997 annual meeting of shareholders. Such class then
shall be elected to a term of three (3) years.
The term of the three (3) directors in the second class of
directors will initially expire at the 1995 meeting of shareholders. Such
class then shall be elected to a term of three (3) years.
The term of the third class of three (3) directors will
initially expire at the 1996 annual meeting of shareholders. Such class then
shall be elected to a term of three (3) years.
SECTION 2. PLACE OF MEETINGS. The Board of Directors may hold its
meetings at such place or places within or without the State of Indiana as the
Board of Directors may from time to time by resolution determine, pursuant to
the Articles of Incorporation, or as may be specified or fixed in the respective
notices or waivers of notice thereof.
SECTION 3. ANNUAL MEETINGS. After each election of directors, whether
at an annual or a special meeting of shareholders, on the same day and at the
conclusion of the meeting of shareholders at which such election shall be and at
the place where such election is held, the newly elected Board of Directors
shall meet for the purpose of organization, the appointment of officers and the
transaction of other business. Notice of such meeting need not be given. Such
meeting may be held at any other time or place which is specified in a notice
given as hereinafter provided for special meetings of the Board of Directors, or
in a waiver of notice thereof signed by all of the directors.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Directors
must be held at the principal office or at such other place, within or without
the State of Indiana, and at such times as the Board of Directors by resolution
may determine. If any day fixed for a regular meeting is a legal holiday at the
place where the meeting is to be held, then the meeting which would otherwise
6
<PAGE> 11
be held on that day must be held at the same hour on the next succeeding
business day at such place. Except as otherwise provided by law or in the
Articles of Incorporation or in this Code of By-Laws, notice of regular meetings
need not be given.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
must be held whenever called by the President or by the Secretary at the request
of any one director. Except as otherwise provided by law or in the Articles of
Incorporation or in this Code of By-Laws, notice of each such special meeting
must be mailed to each director, addressed to him at his residence or usual
place of business, at least three (3) days before the day on which such meeting
is to be held, or must be sent addressed to him at such place by telegraph,
cable or wireless, or be delivered personally or by telephone, not later than
the day before the day on which such meeting is to be held. Notice of any
meeting of the Board of Directors need not, however, be given to any director,
if waived by him as provided in this Code of by-Laws, or if such director is
present at such meeting. Any meeting of the Board of Directors shall be a legal
meeting without any notice thereof having been given, if all the directors then
in office are present thereat or have waived notice thereof. Except as otherwise
specifically provided by law or in the Articles of Incorporation or in this Code
of By-Laws, the notice or waivers of notice of any meeting of the Board of
Directors need not contain any statement of the purposes of the meeting or any
specification of the business to be transacted thereat.
SECTION 6. QUORUM FOR MEETINGS. Unless otherwise provided by law or in
the Articles of Incorporation, the presence of at least a majority of the actual
number of directors elected and qualified, from time to time, is necessary to
constitute a quorum for the transaction of business. In the absence of a quorum
at any such meeting, a majority of the directors present thereat may adjourn
such a meeting from time to time until a quorum is present. Notice of any
adjourned meeting need not be given. At any adjourned meeting at which a quorum
is present, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 7. ORGANIZATION OF MEETINGS. At each meeting of the Board of
Directors, the Chairman of the Board of Directors, if there be one, or in his
absence, the President, or in the absence of both the Chairman and the
President, a director chosen by a majority of the directors present, shall act
as chairman. The Secretary, or in his absence any person appointed by the
chairman, shall act as secretary of the meeting. Any meeting of the Board of
Directors may be adjourned by the vote of a majority of the directors present at
such meeting.
SECTION 8. ORDER OF BUSINESS AT MEETINGS. The order of business at all
meetings of the Board of Directors shall be determined by the chairman of the
meeting, but the order of business to be followed at any meeting at which a
quorum is present may be changed by a majority of the directors present and
entitled to vote thereat. At any meeting of the directors, the Robert's Rules of
Order shall govern as the rules of parliamentary procedure.
SECTION 9. VOTING AT MEETINGS. Unless otherwise provided by law or in
the Articles of Incorporation, at all meetings of directors, a quorum being
present, all matters shall be decided by the affirmative vote of at least a
majority of the directors present at such meeting. The vote, affirmative or
negative, of each director must be recorded in the minutes of such meeting.
Section 10. Removal of Directors.
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CLAUSE (a). Subject to the rights of the holders of any series
of preferred stock then outstanding, any Director, or the entire Board of
Directors, may be removed by the shareholders from office at any time, but only
for cause and only by the affirmative vote of the holders of at least eighty
percent (80%) of the voting power of all of the shares of the Corporation
entitled to vote generally in the election of Directors, voting together as a
single class, at a special meeting called for that purpose.
CLAUSE (b). A Director may be removed with or without cause by
a vote of a majority of the entire Board of Directors.
Section 11. Vacancies on Board of Directors. Subject to the rights of
the holders of any series of preferred stock then outstanding, newly created
directorships resulting from any increase in the authorized number of Directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause shall be filled
by a majority vote of the Directors then in office, and Directors so chosen
shall hold office for a term expiring at the Annual Meeting of Shareholders at
which the term of the class to which they have been elected expires.
SECTION 12. COMPENSATION. Directors shall not receive any stated salary
for their services, but the Board of Directors may allow a fixed director's fee
plus expenses of attendance, if any, to be paid to directors for attendance at
any meeting; provided, however, that nothing herein contained shall be construed
so as to preclude any director from serving the corporation in any other
capacity as an officer, agent, or otherwise and receiving compensation therefor.
SECTION 13. MEETINGS MAY BE ATTENDED BY ELECTRONIC VOICE COMMUNICATION.
Any meeting of the Board of Directors may be attended by directors by means of
any form of electronic voice communication, provided that all directors can
simultaneously hear the proceedings and be heard by all the other directors in
attendance at the meeting. A quorum for any meeting so held shall be computed on
the basis of all persons in voice contact with each other. Any meeting so held
shall be a formal meeting of the Board of Directors for all purposes, and any
business may be transacted at such meeting that could be transacted if the
directors were assembled in physical proximity to each other.
SECTION 14. WRITTEN CONSENT. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if prior to such action a written consent to such
action is signed by all members of the board or of such committee, as the case
may be, and such written consent is filed with the minutes of proceeding of the
board or committee.
SECTION 15. DIRECTORS CONFLICTS OF INTEREST. No contract or other
transaction between the Corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of its
directors is a director or officer or is financially interested, shall be either
void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purposes, if:
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CLAUSE (a). The fact of such relationship or interest is
disclosed or known to the Board of Directors or committee which authorizes,
approves or ratifies the contract or transaction by a vote or consent sufficient
for the purpose without counting the votes or consents of such interested
directors; or
CLAUSE (b). The fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they authorize,
approve or ratify such contract or transaction; or
CLAUSE (c). The contract or transaction is fair and reasonable
to the Corporation.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or a committee thereof which
authorizes, approves or ratifies such contract or transaction.
Section 16. Committees of Directors.
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CLAUSE (a). APPOINTMENT OF COMMITTEES. The Board of Directors
may create one or more committees and appoint members of the Board of Directors
to serve on them. Each committee may have one or more members, who shall serve
at the pleasure of the Board of Directors.
CLAUSE (b). SELECTION OF MEMBERS. The creation of a committee
and the appointment of members to it must be approved by the greater of:
1. a majority of all of the directors in office when the
action is taken; or
2. the number of directors required to take action pursuant to
Section 9.
CLAUSE (c). COMMITTEE PROCEDURES. Meetings of committees shall
be called and held and actions of committees shall be taken in the same manner
as is provided by these By-laws for meetings of directors, except that the time
of regular meetings of committees may be determined either by resolution of the
Board of Directors or by the members of the committees. The Board of Directors
may adopt rules for the governing of any committee not inconsistent with the
provisions of these By-Laws.
CLAUSE (d). DELEGATION OF AUTHORITY. Each committee may
exercise the authority of the Board of Directors which the Board of Directors
confers upon such committee in the resolution creating the committee; provided,
however, a committee may not:
1. authorize distributions;
2. approve or propose to shareholders action that the Indiana
Business Corporation Law requires to be approved by shareholders;
3. fill vacancies on the Board of Directors or any of its
committees;
4. amend the Articles of Incorporation;
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5. adopt, amend or repeal By-Laws;
6. approve a plan of a merger not requiring shareholder
approval;
7. authorize or approve the issuance or sale or a contract for
sale of shares, or determine the designation and relative rights, preferences,
and limitations of a class or series of shares;
8. take any other action precluded by the Indiana Business
Corporation Law, the Articles of Incorporation or these By-Laws.
CLAUSE (e). AUDIT COMMITTEE. In addition to any other
committees created by the Board of Directors, and subject to the provisions of
this Section 16, there shall be a committee of the Board of Directors designated
the "Audit Committee", consisting of two members of the Board of Directors who
are not officers or employees of the Corporation, with members to serve for
one-year terms from annual shareholders' meeting to annual shareholders'
meeting, the purposes of which Audit Committee shall be to: (a) recommend to the
Board of Directors the retention, from time to time, of outside auditing firms
to be engaged by the Corporation, which may be submitted to the shareholders for
ratification at the discretion of the Board of Directors; (b) coordinate the
annual audit of the Corporation between management and the outside auditing
firm; (c) meet with the auditors at least two times during the year, including
one meeting before the audit is commenced and one meeting following the
completion of the audit, and (d) meet at such other times as the Board, in its
discretion, directs or as the Audit Committee, itself, determines.
CLAUSE (f). COMPENSATION COMMITTEE. In addition to any other
committees created by the Board of Directors, and subject to the provisions of
this Section 16, there shall be a committee of the Board of Directors designated
the "Compensation Committee", with membership of the Compensation Committee
consisting of not less than two Directors, each of whom shall be "outside" (i.e.
non-employee) members of the Board of Directors, none of whom shall receive any
discretionary award pursuant to the 1996 Equity Incentive Plan or any similar
plan of the Corporation while serving on the Compensation Committee, and the
composition of the Compensation Committee shall at all times satisfy the
requirements of Rule 16(b) promulgated under the Securities Exchange Act of
1934. The purposes of the Compensation Committee shall be to: (a) develop and
recommend to the Board of Directors for approval a compensation plan for the
President/Chief Executive Officer and all other individuals within the
Corporation who are designated as "senior management"; (b) review benefit and
bonus plans and other corporate perquisites on an annual basis; (c) review and
recommend to the Board of Directors suggested changes in compensation to be paid
to outside members of the Board; (d) review expense reimbursement policies of
the Company as they pertain to directors, management and other employees; and
(e) administer the 1996 Equity Incentive Plan in accordance with the terms of
such plan. The Compensation Committee shall meet at least twice each year or as
determined necessary by the Board of Directors or by the Compensation Committee,
itself.
The designation of such committees and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed by the Indiana Business Corporation Law, as amended.
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ARTICLE V
---------
OFFICERS
--------
SECTION 1. NUMBER. The executive officers of the Corporation shall
consist of a President, who shall be a member of the Board of Directors; one or
more Vice Presidents; a Secretary; a Treasurer; and such other officers as the
Board of Directors may determine. In addition, there may be such subordinate
officers, agents, and employees as shall be appointed in accordance with the
provisions of this Code of By-Laws. One person may hold any two or more offices.
The Board of Directors may require any such officer, agent, or employee to give
security for the faithful performance of his duties.
SECTION 2. ELECTION, TERM OF OFFICE, AND QUALIFICATIONS. The executive
officers of the Corporation shall be chosen by the Board of Directors as soon as
practicable after each annual or special election of directors, each such
executive officer to hold office until his successor is duly chosen and
qualified, or until his death, or until he resigns, or until he has been removed
in the manner hereinafter provided.
SECTION 3. SUBORDINATE OFFICERS. The Board of Directors may appoint
such subordinate officers, agents, or employees as the Board of Directors may
deem necessary or advisable, including one or more Assistant Treasurers and one
or more Assistant Secretaries, each of whom shall hold office for such period,
have such authority, and perform such duties as the Board of Directors may from
time to time determine. The Board of Directors may delegate to any executive
officer the power to appoint and remove subordinate officers, agents, or
employees.
SECTION 4. REMOVAL. Any officer of the Corporation may be removed,
either with or without cause, at any time, by resolution adopted by the Board of
Directors at a special meeting thereof called for that purpose.
SECTION 5. THE PRESIDENT. The President is the chief executive officer
of the corporation and has general and active supervision and direction over the
business and affairs of the Corporation and over the Corporation's several
officers, subject, however, to the direction and control of the Board of
Directors. The President shall, if present, preside at each meeting of the
shareholders and of the Board of Directors, unless there is a Chairman of the
Board of Directors and such Chairman is present, in which event, such Chairman
shall preside. The President may sign, with the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, certificates of shares of
the Corporation. Unless otherwise provided by law or in the Articles of
Incorporation or by the Board of Directors, the President may sign, execute, and
deliver, in the name of the Corporation and without attestation of another
officer, all deeds, mortgages, bonds, contracts, or other instruments authorized
by the Board of Directors. In general, the President shall perform all duties
incident to the office of President and such other duties as may from time to
time be assigned to him by this Code of By-laws or by the Board of Directors.
The President shall be chosen from among the Board of Directors.
SECTION 6. THE VICE PRESIDENTS. The Board of Directors in its sole
discretion may appoint one or more Vice Presidents. Each Vice President shall
have the authorized duties, and shall perform the functions, consistent with his
department and area of interest, specified by the President or the
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Board of Directors. The Vice President Finance, if one is named by the Board of
Directors, shall be the chief financial officer of the Corporation and shall be
responsible for the overall financial affairs of the Corporation as ordered by
the President or the Board of Directors.
SECTION 7. THE TREASURER. The Treasurer has charge and custody of, and
is responsible for, all the funds and securities of the Corporation and shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all moneys and other valuable effects in
the name of and to the credit of the Corporation in such banks and other
depositaries as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the chief financial officer, the President or to the Board of Directors,
whenever the chief financial officer, the President or the Board may require him
so to do, a statement of all his transactions as Treasurer and an account of the
financial condition of the Corporation. In general, the Treasurer shall perform
all the duties as may from time to time be assigned to him by the President or
the Board of Directors. The Treasurer may sign, with the President or a Vice
President, certificates of shares of the Corporation.
SECTION 8. ASSISTANT TREASURERS. At the request of the Treasurer, or in
case of his absence or inability to act, the Assistant Treasurer, or if there
shall be more than one, any of the Assistant Treasurers, shall perform the
duties of the Treasurer, and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the Treasurer. Each of the Assistant
Treasurers shall perform such other duties as from time to time may be assigned
to him by the President, the Treasurer, or the Board of Directors.
SECTION 9. SECRETARY. The Secretary has the power to act as secretary
of and shall have the responsibility for preparing the minutes of all meetings
of the Board of Directors and of the shareholders. The Secretary: (a) shall
cause to be given such notice of all meetings of the shareholders and of the
Board of Directors as required; (b) shall be responsible for authentication of
records of the Corporation; (c) shall have charge of the stock transfer book,
and of the other books, records, and paper of the Corporation relating to its
organization as a corporation; (d) shall see that the reports, statements, and
other documents required by law are properly kept and filed; and, (e) shall
perform all other duties incident to the office of the Secretary. The Secretary
may sign, with the President or a Vice President, certificates of shares of the
Corporation. The Secretary has such powers and may perform such duties as are
assigned to him by this Code of By-Laws, and he shall have such other powers and
perform such other duties, not inconsistent with this Code of By-Laws, as the
President or the Board of Directors may from time to time prescribe.
SECTION 10. ASSISTANT SECRETARIES. At the request of the Secretary, or
in case of his absence or inability to act, the Assistant Secretary, if any, or
if there shall be more than one, any of the Assistant Secretaries, shall perform
the duties of the Secretary, and, when so acting, shall have all the powers of,
and be subject to all the restrictions upon the Secretary. Each of the Assistant
Secretaries shall perform such other duties as from time to time may be assigned
to him by the President, the Secretary, or the Board of Directors.
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SECTION 11. SALARIES. The salaries of the officers of the Corporation,
shall be fixed from time to time by the Board of Directors, and none of such
officers shall be prevented from receiving a salary by reason of the fact that
such officer is also a member of the Board of Directors.
SECTION 12. VACANCIES. Unless otherwise provided by law or in the
Articles of Incorporation, in case the office of the President, any Vice
President, Secretary, Treasurer, or other officer or agent becomes vacant, the
directors then in office may elect or appoint a successor who shall hold office
for the unexpired term, or, if regular election or appointment to such office
is, in this Code of ByLaws, provided to be made in a manner other than by
election or appointment by the Board of Directors, then the vacancy for the
unexpired portion of the term may be filled in the manner provided herein for
regular elections or appointments to such office.
ARTICLE VI
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RESIGNATIONS
------------
SECTION 1. RESIGNATIONS. Any director or officer may resign his office
at any time by giving written notice of his resignation to the Board of
Directors, its Chairman, or the Secretary of the Corporation. Such resignation
shall take effect at the time specified therein or, if no time be specified
therein, then at the time of the receipt thereof, and the acceptance thereof
shall not be necessary to make such resignation effective.
ARTICLE VII
-----------
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
----------------------
SECTION 1. ACTIONS BY THIRD PARTIES. The Corporation 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 by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, 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 such
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
Corporation, 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, 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
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The
Corporation shall indemnify any person who was or is a party or threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by
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reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, 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 such 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
Corporation.
SECTION 3. INDEMNIFICATION AS A MATTER OF RIGHT OR DISCRETION. Any such
director, officer, employee or agent who has been wholly successful, on the
merits or otherwise, with respect to any claim, suit or proceeding of the
character described herein shall be entitled to indemnification as of right.
Except as provided in the preceding sentence, any indemnification hereunder
shall be made at the discretion of the Corporation, but only if the Board of
Directors, acting by a quorum consisting of directors who are not parties to or
who have been wholly successful with respect to such claim, action, suit or
proceeding shall find that the director, officer, employee or agent has met the
standards or conduct set forth in the first two Sections of this Article. The
directors may request independent legal counsel (who may be regular counsel of
the Corporation) to deliver to it their written opinion as to whether such
director, officer, employee or agent has met such standards.
SECTION 4. MULTIPLE CLAIMS. If several claims, issues or matters of
action are involved, any such person may be entitled to indemnification as to
some matters even though he is not so entitled as to others.
SECTION 5. ADVANCEMENT OF EXPENSES. The Corporation may advance
expenses incurred in defending a civil or criminal action to, or where
appropriate may, at its expense undertake the defense of, any such director,
officer, employee or agent upon receipt of an undertaking by or on behalf of
such person to repay such expenses if it should ultimately be determined that he
is not entitled to indemnification under this Article.
SECTION 6. CLAIMS TO WHICH THIS ARTICLE APPLIES. The provisions of this
Article shall be applicable to claims, actions, suits or proceedings made or
commenced before or after the adoption hereof and whether arising from acts or
omissions occurring before or after the adoption hereof.
SECTION 7. INDEMNIFICATION BY THIS ARTICLE NOT EXCLUSIVE. The
indemnification provided by this Article shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under the
Articles of Incorporation or any agreement, vote of stockholders or
disinterested directors, as a matter of law, 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 a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 8. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, 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 such capacity, or arising out of
his status as such, whether or not the
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Corporation would have the power to indemnify him against such liability under
the provisions of this Article.
SECTION 9. INDEMNIFICATION FOR LIABILITIES UNDER THE FEDERAL SECURITIES
LAWS. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 or the Securities Exchange Act of 1934 is permitted to directors,
officers, employees and agents of the Corporation pursuant to the provisions of
this Article, the Corporation understands that the Securities and Exchange
Commission is of the opinion that such indemnification may contravene federal
public policy as expressed in such Acts, and therefore, may be unenforceable.
Therefore, in the event that a claim for such indemnification is asserted by any
director, officer, employee or agent, and the Commission is still of the same
opinion, the Corporation (except insofar as such claim seeks reimbursement from
the Corporation of expenses paid or incurred by a director, officer, employee or
agent in the successful defense of any action, suit or proceeding) will, unless
the matter has theretofore been adjudicated by precedent deemed by the
Corporation to be controlling, submit to a court of appropriate jurisdiction the
question of whether or not indemnification by it is against public policy as
expressed in such Acts, and will be governed by the final adjudication of such
issue.
SECTION 10. NOTICE OF INDEMNIFICATION. The Corporation shall report the
indemnification or advance made pursuant to this Article VII in writing to the
shareholders with or before the notice of the next shareholders' meeting.
ARTICLE VIII
------------
CONTRACTS
---------
SECTION 1. AUTHORIZATION OF AND EXECUTION OF CONTRACTS. Unless
authorized by the Board of Directors, no officer, agent, or employee has any
power or authority to bind the Corporation by any contract or engagement or to
pledge the Corporation's credit or to render it pecuniarily liable for any
purpose or to any amount. Any contract or instrument properly authorized may be
executed and delivered in the name and on behalf of the Corporation by the two
persons of the President or any Vice President and the Secretary or an Assistant
Secretary. However, the Board of Directors may authorize any other officer or
agent, in the name of and on behalf of the Corporation, to enter into any
contract or to execute and deliver any instrument, and such authority may be
general or confined to specific instances.
SECTION 2. INDEBTEDNESS. No loans may be contracted on behalf of the
Corporation and no negotiable paper may be issued in the Corporation's name
unless authorized by resolution of the Board of Directors. When authorized by
the Board of Directors, any officer or agent of the Corporation may effect loans
and advances at any time for the Corporation from any bank, trust company, or
other institution, or from any firm, corporation, or individual, and for such
loans and advances may make, execute, and deliver promissory notes, bonds, or
other certificates or evidences of indebtedness of the Corporation, and, may
pledge, hypothecate, or transfer any securities or other property of the
corporation as security for any such loans or advances. Such authority may be
general or confined to specific instances.
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SECTION 3. CHECKS, DRAFTS, SIMILAR PAYMENT ORDERS, AND NOTES. All
checks, drafts, and other orders for the payment of moneys out of the funds of
the corporation, and all notes or other evidences of indebtedness of the
Corporation must be signed on behalf of the Corporation in such manner as shall
from time to time be determined by resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies, or other depositaries as the Board of Directors
may select or as may be selected by any officer or agent of the Corporation to
whom such power may from time to time be delegated by the Board of Directors.
For the purpose of such deposit, the President, any Vice President, the
Treasurer, the Secretary, or any other officer or agent or employee of the
Corporation to whom such power may be delegated by the Board of Directors may
endorse, assign, and deliver checks, drafts, and other orders for the payment of
moneys which are payable to the order of the Corporation.
ARTICLE IX
----------
SHARES AND DIVIDENDS
--------------------
SECTION 1. NUMBER OF SHARES. The total number of shares of all
classes of stock which the Corporation shall have authority to issue is
18,513,514 shares, of which 13,513,514 shares shall be common stock and of which
5,000,000 shares shall be preferred stock.
A. The number of authorized shares which the Corporation designates as
having par value is none.
B. The number of authorized shares which the Corporation designates as
without par value is 18,513,514.
SECTION 2. CERTIFICATES FOR SHARES. Each holder of the capital stock of
the Corporation shall be entitled to a certificate signed by the President and
the Secretary or an Assistant Secretary, certifying the number of shares of
stock in the corporation owned by him. If such certificate is countersigned by
the written signature of a transfer agent other than the Corporation or its
employee, the signatures of the officers of the Corporation may be facsimiles.
If such certificate is countersigned by the written signature of a registrar
other than the Corporation or its employee, the signatures of the transfer agent
and the officers of the Corporation may be facsimiles. In case any officer,
transfer agent or registrar whose written or facsimile signature has been placed
upon a certificate ceases to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer, transfer agent or registrar at the date of
its issue. Certificates shall be in a standard form, adopted by the Board of
Directors, and shall state the name of the registered holder, the number of
shares represented by the certificate, that such shares have no par value, and
that such shares have been fully paid and are not liable to any further call or
assessment.
SECTION 3. TRANSFER OF SHARES. The capital stock of the Corporation
shall be transferable on the books of the Corporation in such manner as is
provided in Article 8 of the Uniform Commercial Code. The Corporation shall be
entitled to treat shareholders of record as holders in fact, and the
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Corporation shall not be bound to recognize any claim, equitable or otherwise,
to such shares on the part of any other person.
SECTION 4. FIXING OF RECORD DATES. For the purpose of determining
shareholders entitled to vote at any meeting of shareholders or entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period, not exceeding
fifty (50) days, or may fix in advance a record date for such purpose, which
date may not be more than fifty (50) days prior to the date of such meeting or
the date on which the action requiring such determination is to be taken.
SECTION 5. LOST, DESTROYED OR MUTILATED SHARE CERTIFICATES. In case of
loss, destruction, or mutilation of any share certificate, another share
certificate may be issued in its place upon proof of such loss, destruction, or
mutilation and upon the giving of a bond of indemnity to the Corporation in such
form and in such sum as the Board of Directors may prescribe.
SECTION 6. NOTICE OF SHARES ISSUED. If the Corporation authorizes the
issuance of shares for promissory notes or for promises to render services in
the future, the Corporation shall report in writing to the shareholders the
number of shares authorized to be so issued with or before the notice of the
next shareholders' meeting.
SECTION 7. DECLARATION AND AMOUNT OF DIVIDENDS. Dividends on preferred
stock shall be declared in accordance with the applicable provisions of the
Corporation's Amended and Restated Articles of Incorporation. Subject to the
rights of the holders of any series of preferred stock then outstanding,
dividends on common stock may be declared by the Board of Directors quarterly or
for such other dividend periods as the Board of Directors may determine, from
the net profits and retained earnings and paid to the holders of the stock of
the Corporation according to its stock record books as set forth in the
resolution declaring the dividend. No dividend shall be declared or paid that
shall in any measure impair the capital of the Corporation. Each dividend, when
declared, shall be in such amount, expressed in money, as the Board of Directors
shall determine, subject to the Articles of Incorporation and any applicable
statute. No dividend shall be paid with respect to any shares of stock for which
payment shall not have been fully made to the Corporation on the dividend date.
SECTION 8. STOCK DIVIDENDS. The Board of Directors may, in its
discretion, in lieu of or in addition to cash dividends, declare dividends to be
payable in shares of the unissued common stock of the Corporation, but any stock
dividend so declared shall be fully subject to all the provisions of the
Articles of Incorporation, the general law, and these By-Laws with respect to
source of payment including, without limitation, the requirement that the same
shall be declared and paid only from net profits and retained earnings of the
Corporation. Any stock dividend declared shall be expressed in terms of
fractional shares per each outstanding share of common stock of the Corporation.
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ARTICLE X
---------
WAIVER OF NOTICE
----------------
SECTION 1. WAIVER OF NOTICE. Unless otherwise provided by law or in the
Articles of Incorporation or in this Code of By-Laws, any person entitled to any
corporate notice may waive such notice by appearance in person, or, in the case
of a shareholder, by his duly authorized attorney, or waive such notice in
writing (which includes the use of telegraph, cable, radio or wireless), whether
before or after the meeting or other matter or event in respect of which such
notice is to be given, and in such event, such waiver shall be equivalent to
such notice and such notice need not be given to such person and any action to
be taken after such notice or after the lapse of a prescribed period of time may
be taken without such notice and without the lapse of any period of time.
However, an appearance in person or by duly authorized proxy shall not be
construed as waiver of notice if such appearance is stated to be for the express
purpose of objecting to the fact that no notice was sent to the person who was
entitled to receive the notice.
ARTICLE XI
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EMERGENCY BY-LAWS
-----------------
SECTION 1. EMERGENCY. In anticipation of or during an Emergency, as
such term is defined below, any provisions in the Articles of Incorporation or
these By-Laws which conflict with the provisions of this Article XI, are of no
force or effect. An Emergency is defined, for purposes of this article only, as
an extraordinary event which prevents a quorum of the Corporation's Board of
Directors from assembling in time to deal with the business for which the
meeting has been or is to be called. The existence of an Emergency may be made
by any two (2) of the Corporation's directors then in office. The reason for the
Emergency shall be set out in a writing, and shall be made a part of the minutes
of any meeting held pursuant to this article.
SECTION 2. PROVISIONS REGARDING DIRECTORS DURING EMERGENCY. During an
Emergency as defined herein, notice of any meeting of the Board of Directors
shall be provided only to those directors whom it is practicable to reach and in
any practicable manner, including publication by radio or newspaper. One or more
officers of the Corporation present at any meeting at the Board of Directors
held pursuant to this article, may be deemed to be directors for the meeting, in
order of rank and, if within the same rank, then in order of seniority, as
necessary to achieve a quorum.
SECTION 3. EMERGENCY POWER. At any meeting held pursuant to this
article, the Board of Directors, as constituted above, may take all actions
necessary to further the ordinary affairs of the Corporation, including but not
limited to: (1) modifying the lines of succession to accommodate the incapacity
of any director, officer, employee or agent; (2) relocating the principal
office, designating alternative principal offices or regional offices, or
authorizing the officers to do so; and (3) establishing revised quorum
requirements for meetings of the Board of Directors.
SECTION 4. BINDING EFFECT. Corporate action taken in good faith during
an Emergency under this article to further the ordinary business affairs of the
Corporation binds the Corporation and may not be used to impose liability on a
corporate director, officer, employee or agent. All provisions of
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the regular By-Laws consistent with the Emergency By-Laws remain effective
during the Emergency. The Emergency By-laws are not effective after the
Emergency ends.
ARTICLE XII
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PROVISIONS FOR CERTAIN BUSINESS COMBINATIONS
--------------------------------------------
Section 1. Vote Required.
--------- -------------
CLAUSE (a). HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS. In
addition to any affirmative vote required by law or the Corporation's Articles
of Incorporation or this Code of ByLaws of the Corporation, and except as
otherwise expressly provided in Section 2 of this Article XII:
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (A) any Interested Shareholder (as
hereinafter defined), or (B) any other corporation (whether or not itself an
Interested Shareholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Shareholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets, of the Corporation or any Subsidiary, having an aggregate Fair Market
Value of One Million Dollars ($1,000,000) or more; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Shareholder or any Affiliate
of any Interested Shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of One Million
Dollars ($1,000,000) or more; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested Shareholder; or
5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Shareholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Shareholder or any Affiliate of any
Interested Shareholder; shall require the affirmative vote of the holders of at
least eighty percent (80%) of the voting power of the then outstanding shares of
common stock of the Corporation entitled to vote generally in election of
directors (the "Voting Stock"), voting together as a single class (it being
understood that for purposes of this Article XII, each share of the Voting Stock
shall have the number of votes granted to it pursuant to the Corporation's
Articles of Incorporation and the Indiana Business Corporation Law). Such
affirmative vote shall be required
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notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
CLAUSE (b). DEFINITION OF "BUSINESS COMBINATION." The term
"Business Combination" as used in this Article XII shall mean any transaction
which is referred to in any one or more of paragraphs 1 through 5 of Clause (a)
of this Section 1 of this Article XII.
SECTION 2. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section
1 of this Article XII shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law and any other provision of this Code of By-Laws, if
all of the conditions specified in either of the following Clauses (a) and (b)
are met:
CLAUSE (a). APPROVAL BY CONTINUING DIRECTORS. The Business
Combination shall have been approved by a majority of the Continuing Directors
(as hereinafter defined).
CLAUSE (b). PRICE AND PROCEDURAL REQUIREMENTS. All of the
following conditions shall have been met:
1. The aggregate amount of the cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share by holders
of common stock in such Business Combination shall be at least equal to the
highest of the following:
A. the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholders for any shares of common stock acquired by it (i) within
the two (2) year period immediately prior to the first public announcement of
the proposal of the Business Combination (the "Announcement Date") or (ii) in
the transaction in which it became an Interested Shareholder, whichever is
higher;
B. the Fair Market Value per share of the common
stock on the Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter date is referred to in
this Article XII as the "Determination Date"), whichever is higher; and
C. the price per share equal to the Fair Market Value
per share of common stock determined pursuant to Clause (b)(1)(B) above,
multiplied by the ratio of (i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of common stock acquired by it within the
two (2) year period immediately prior to the Announcement Date to (ii) the Fair
Market Value per share of common stock on the first day in such two (2) year
period upon which the Interested Shareholder acquired any shares of common
stock.
2. The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of consideration
other than cash to be received per share by holders of shares of any other class
of outstanding Voting Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this Clause (b)(2) shall
be
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required to be met with respect to every class of outstanding Voting Stock
whether or not the Interested Shareholder has previously acquired any shares of
a particular class of Voting Stock):
A. the highest per share price (including any
brokerage commissions, transfer fees and soliciting dealer's fees) paid by the
Interested Shareholder for any shares of such class of Voting Stock acquired by
it (i) within the two (2) year period immediately prior to the Announcement Date
or (ii) in the transaction in which it became an Interested Shareholder,
whichever is higher;
B. the highest preferential amount per share to which
the holders of shares of such class of Voting Stock are entitled in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation.
C. the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the Determination Date, whichever is
higher; and
D. the price per share equal to the Fair Market Value
per share of such class of Voting Stock determined pursuant to Clause (b)(2)(C)
above, multiplied by the ratio of (i) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealer's fees) paid by the
Interested Shareholder for any shares of such class of Voting Stock acquired by
it within the two (2) year period immediately prior to the Announcement Date to
(ii) the Fair Market Value per share of such class of Voting Stock on the first
day in such two (2) year period upon which the Interested Shareholder acquired
any shares of such class of Voting Stock;
3. The consideration to be received by holders of a particular
class of outstanding Voting Stock (including common stock) shall be in cash or
in the same form as the Interested Shareholder has previously paid for shares of
such class for shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of Voting Stock shall be
either cash of the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it.
4. After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination: (A)
except as approved by a majority of the Continuing Directors, there shall have
been no failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on any then outstanding
preferred stock; (3) there shall have been (i) no reduction in the annual rate
of dividends paid on the common stock (except as necessary to reflect any
subdivision of the common stock), except as approved by a majority of the
Continuing Directors, and (ii) an increase in such annual rate or dividend as
necessary to reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the effect
of reducing the number of outstanding shares of the common stock, unless the
failure so to increase such annual rate is approved by a majority of the
Continuing Directors; and (C) such Interested Shareholder shall not become the
beneficial owner of any additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder becoming an Interested
Shareholder.
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5. After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as a Shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation (or any Subsidiary of the
Corporation), whether in anticipation of or in connection with such Business
Combination or otherwise.
6. A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
Shareholders of the Corporation at least thirty (30) days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
SECTION 3. CERTAIN DEFINITIONS. For the purposes of Article XII:
CLAUSE (a). A "person" shall include any individual, firm,
corporation or other entity. When two (2) or more persons act as a partnership,
limited partnership, syndicate or group for the purpose of acquiring voting
stock of the Corporation, such partnership, syndicate or group shall be deemed a
"person."
CLAUSE (b). "Interested Shareholder" shall mean any person
(other than the Corporation or any Subsidiary) who or which:
1. is the beneficial owner, directly or indirectly, of more
than ten percent (10%) of the voting power of the outstanding Voting Stock; or
2. is an Affiliate of the Corporation and at any time within
the two (2) year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of ten percent (10%) or more of the
voting power of the then outstanding Voting Stock; or
3. is an assignee of or has otherwise succeeded to any shares
of Voting Stock which were at any time within the two (2) year period
immediately prior to the date in question beneficially owned, by any Interested
Shareholder, if such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
"Interested Shareholder" shall not mean any person who, but for this exception,
would be deemed an Interested Shareholder on May 19, 1987.
CLAUSE (c). A person shall be a "beneficial owner" of any
Voting Stock:
1. which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly; or
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2. which such person or any of its Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
under- standing or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding; or
3. which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
CLAUSE (d). For the purpose of determining whether a person is
an Interested Shareholder pursuant to Clause (b) of this Section 3 of this
Article XII, the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through applications of Clause (c) of this Section 3
of this Article XII but shall not include any other shares of Voting Stock which
may be issuable pursuant to any agreement, arrangement or understanding, or upon
exercises of conversion rights, warrants or options, otherwise.
CLAUSE (e). "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
February 28, 1987.
CLAUSE (f). "Subsidiary" means any corporation of which a
majority of any class of equity security is owned directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in Clause (b) of this Section 3 of this Article
XII, the term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
CLAUSE (g). "Continuing Director" means any member of the
Board of Directors of the Corporation (the "Board") who is unaffiliated with the
Interested Shareholder and was a member of the Board prior to the date that the
Interested Shareholder became an Interested Shareholder, and any successor of a
Continuing Director who is unaffiliated with the Interested Shareholder and is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board.
CLAUSE (h). "Fair Market Value" means:
1. in the case of stock, the highest closing sale price during
the thirty (30) day period immediately preceding the date in question of a share
of such stock on the Composite Tape for New York Stock Exchange-Listed Stock, or
if such stock is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 on which such stock is listed, or, if such stock is not listed on any
such exchange, the highest closing bid quotation with respect to a share of such
stock during the thirty (30) day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotations System or
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any then in use, or if no such quotation is available, the Fair Market Value of
a share of such stock as determined by the Board in good faith; and
2. in the case of property other than cash or stock, the Fair
Market Value of such property on the date in question as determined by the Board
in good faith.
CLAUSE (i). In the event of any Business Combination in which
the Corporation survives, the phrase "other consideration to be received" as
used in Clauses (b)(1) and (2) of Section 2 of this Article XII shall include
the shares of common stock and/or other shares of any other class of outstanding
Voting Stock by the holders of such shares.
SECTION 4. POWERS OF THE BOARD OF DIRECTORS. A majority of the
Directors of the Corporation shall have the power and duty to determine for the
purposes of this Article XII, on the basis of information known to them after
reasonable inquiry, (a) whether a person is an Interested Shareholder, (b) the
number of shares of Voting Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another and (d) whether the assets which
are the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value of
One Million Dollars ($1,000,000) or more.
SECTION 5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED
SHAREHOLDER. Nothing contained in this Article XII shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.
SECTION 6. AMENDMENT, REPEAL, ETC. Notwithstanding any other provisions
of the Corporation's Articles of Incorporation or this Code of By-Laws of the
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, in the Corporation's Articles of Incorporation or this Code of
By-Laws of the Corporation), the affirmative vote of the holders of eighty
percent (80%) or more of the voting power of the shares of the then outstanding
Voting Stock, voting together as a single class, shall be required to amend or
repeal, or adopt provisions inconsistent with, this Article XII of this Code of
By-Laws.
ARTICLE XIII
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AMENDMENT OF BY-LAWS
--------------------
SECTION 1. AMENDMENTS. The By-Laws may be altered or amended by the
Board of Directors at any meeting if notice of the intention to consider changes
in the By-Laws is contained in the notice of such meeting or if such notice is
waived by all members of the Board either in writing or by attendance at the
meeting.
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