<PAGE> 1
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[xx] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997
--------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from __________ to _________
Commission File Number 1-5846
THE LIBERTY CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0507055
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
Post Office Box 789, Wade Hampton Boulevard, Greenville, SC 29602
-----------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 864/609-8436
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of the latest practicable date.
<TABLE>
<CAPTION>
Number of shares Outstanding
Title of each class as of March 31, 1997
------------------- --------------------
<S> <C>
Common Stock 20,251,865
</TABLE>
Page 1 of 70 sequentially numbered pages.
The Exhibit Index is on Page 10.
<PAGE> 2
PART I, ITEM 1
--------------
THE LIBERTY CORPORATION AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED AND CONDENSED BALANCE SHEETS
-----------------------------------------
<TABLE>
<CAPTION>
MARCH 31, 1997 December 31, 1996
(In 000's) -------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Investments:
Fixed Maturity Securities available for sale, at market, cost of
$1,507,199 at 3/31/97 and $1,465,213 at 12/31/96 $ 1,527,054 $ 1,517,539
Equity Securities, primarily at market, cost of $50,203 at 3/31/97 and
$61,431 at 12/31/96 60,879 75,591
Mortgage Loans 239,170 230,910
Investment Real Estate 131,384 132,696
Loans to Policyholders 99,998 98,816
Other Long-Term Investments 22,967 22,470
Short-Term Investments 250 250
----------- -----------
Total Investments 2,081,702 2,078,272
Cash 16,939 36,774
Accrued Investment Income 20,175 20,817
Receivables 63,211 64,074
Receivable from Reinsurers 282,669 277,578
Deferred Acquisition Costs and Cost of Business Acquired 337,258 332,946
Buildings and Equipment 78,990 79,808
Intangibles Related to Television Operations 93,004 93,979
Goodwill Related to Insurance Acquisitions 35,191 35,608
Other Assets 42,387 40,909
----------- -----------
Total Assets $ 3,051,526 $ 3,060,765
=========== ===========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Liabilities
Policy Liabilities $ 1,928,593 $ 1,913,111
Notes, Mortgages and Other Debt 147,791 147,861
Long Term Debt 100,000 100,000
Accrued Income Taxes 10,355 5,163
Deferred Income Taxes 151,442 163,139
Accounts Payable and Accrued Expenses 91,727 101,209
Other Liabilities 3,561 3,822
----------- -----------
Total Liabilities 2,433,469 2,434,305
----------- -----------
Redeemable Preferred Stock
1994-A Series, $35.00 redemption value, shares issued and outstanding -
668,207 in 1997 and 1996 23,387 23,387
1994-B Series, $37.50 redemption value, shares issued and outstanding -
590,469 in 1997 and 592,334 in 1996 22,143 22,212
----------- -----------
Total Redeemable Preferred Stock 45,530 45,599
----------- -----------
Shareholders' Equity
Common Stock 164,227 163,443
Series 1995-A Convertible Preferred Stock, $35.00 redemption value,
599,985 shares issued and outstanding 20,999 20,999
Unearned Stock Compensation (6,547) (7,168)
Unrealized Investment Gains (Losses) 19,009 39,726
Cumulative Foreign Currency Translation Adjustment (414) (204)
Retained Earnings 375,253 364,065
----------- -----------
Total Shareholders' Equity 572,527 580,861
----------- -----------
Total Liabilities, Redeemable Preferred Stock and Shareholders'
Equity $ 3,051,526 $ 3,060,765
=========== ===========
See Notes to Consolidated and Condensed Financial Statements.
</TABLE>
2
<PAGE> 3
THE LIBERTY CORPORATION AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED AND CONDENSED STATEMENTS OF INCOME
-----------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
(In 000's, except per share data) 1997 1996
-------- --------
(Unaudited)
<S> <C> <C>
REVENUES
Insurance Premiums & Policy Charges $ 86,441 $ 77,526
Broadcasting Revenues 30,021 28,880
Net Investment Income 39,055 37,316
Service Contract Revenue 1,725 1,791
Realized Investment Gains (Losses) 2,675 1,195
-------- --------
Total Revenues 159,917 146,708
-------- --------
EXPENSES
Policyholder Benefits 58,605 57,528
Insurance commissions 19,056 15,254
General Insurance Expenses 16,573 15,075
Amortization of Deferred Acquisition Costs and Cost of
Business Acquired 11,367 11,937
Broadcasting Expenses 21,934 21,752
Interest Expense 3,655 3,657
Other Expenses 4,605 845
-------- --------
Total Expenses 135,795 126,048
-------- --------
Income Before Income Taxes 24,122 20,660
Provision for Income Taxes 8,255 6,605
-------- --------
NET INCOME $ 15,867 $ 14,055
======== ========
EARNINGS PER SHARE: (Exhibit 11) $ .72 $ .64
Dividends Per Common Share $ .185 $ .17
</TABLE>
See Notes to Consolidated and Condensed Financial Statements.
3
<PAGE> 4
THE LIBERTY CORPORATION AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS
---------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------
(In 000's) 1997 1996
---------------------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 15,867 $ 14,055
Adjustments to reconcile net income to net cash provided (used) in
operating activities:
Increase (decrease) in policy liabilities 2,328 (623)
Decrease in accounts payable and accrued liabilities (8,640) (297)
(Increase) Decrease in receivables (3,612) 3,905
Amortization of policy acquisition costs and cost of business
acquired 11,367 11,938
Policy acquisition costs deferred (12,379) (11,751)
Realized investment (gains) losses (2,675) (1,195)
Gain on sale of operating assets (557) (479)
Depreciation and amortization 5,407 4,348
Amortization of bond premium and discount (1,896) (864)
Provision for deferred income taxes 344 907
All other operating activities, net 7,998 (7,105)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 13,552 12,839
INVESTMENT ACTIVITIES
Investment securities sold 39,488 36,562
Investment securities matured or redeemed by issuer 16,783 22,290
Cost of investment securities acquired (82,792) (81,752)
Mortgage loans made (12,331) (9,612)
Mortgage loan repayments 4,118 6,889
Purchase of investment real estate, buildings and equipment (5,118) (12,408)
Sale of investment real estate, buildings and equipment 3,921 7,386
Purchase of short-term investments -- (42,782)
Sales of short-term investments -- 42,532
All other investment activities, net (1,056) 1,022
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (36,987) (29,873)
FINANCING ACTIVITIES
Proceeds from borrowings 764,000 655,500
Principal payments on debt (764,069) (649,889)
Dividends paid (4,679) (4,386)
Stock issued for employee benefit and compensation programs 584 692
Return of policyholders' account balances (10,943) (8,895)
Receipts credited to policyholders' account balances 18,707 18,153
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,600 11,175
INCREASE (DECREASE) IN CASH (19,835) (5,859)
Cash at beginning of year 36,774 43,741
--------- ---------
CASH AT END OF PERIOD $ 16,939 $ 37,882
========= =========
</TABLE>
See Notes to Consolidated and Condensed Financial Statements
4
<PAGE> 5
THE LIBERTY CORPORATION AND SUBSIDIARIES
----------------------------------------
NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS
--------------------------------------------------------
March 31, 1997
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated and condensed financial
statements of The Liberty Corporation and Subsidiaries (the Company)
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
information included is not necessarily indicative of the annual
results that may be expected for the year ended December 31, 1997, but
it does reflect all adjustments (which are of a normal and recurring
nature) considered, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. For
further information, refer to the consolidated financial statements
and footnotes thereto included in The Liberty Corporation annual
report on Form 10-K for the year ended December 31, 1996.
2. EARNINGS PER SHARE
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("SFAS 128"). This Standard is effective for financial
statements issued for periods ending after December 15, 1997, with no
early application permitted. This Standard replaces Accounting
Principles Board Opinion No. 15, "Earnings Per Share" ("APB 15") by
making the requirements for earnings per share information more
consistent with international accounting standards. SFAS 128 replaces
the presentation of primary earnings per share with basic earnings per
share, which is a simpler calculation that assumes no dilution from
common stock equivalents. Basic earnings per share is calculated by
dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. In
addition to basic earnings per share, diluted earnings per share must
also be presented, which is calculated similarly to fully diluted
earnings per share pursuant to APB 15. The adoption of this Standard
will not result in material differences from the earnings per share as
calculated and reported under APB 15.
3. COMMITMENTS AND CONTINGENCIES
At March 31, 1997, the Company had made commitments as shown below:
(In 000's)
<TABLE>
<S> <C>
Investment real estate $ 5,324
Mortgage loans and bonds 35,764
Other 13,285
----------
$ 54,373
==========
</TABLE>
4. RECLASSIFICATIONS
Certain reclassifications have been made in the previously reported
financial statements to make the prior year amounts comparable to
those of the current year. Such reclassifications had no effect on
previously reported net income, total assets, or stockholders equity.
5
<PAGE> 6
PART I, ITEM 2
--------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
(Unaudited)
OPERATIONS
Consolidated first quarter net income of $15.9 million increased 13% over
1996's first quarter (see table below). Operating earnings (which exclude net
realized investment gains and losses) increased $.9 million (7%) over 1996's
first quarter. Net income reflects realized investment gains (after-tax) of
$1.8 million in the first quarter of 1997 versus realized investment gains of
$.9 million in the first quarter of 1996.
<TABLE>
<CAPTION>
First Quarter
-------------
1997 1996
----------------------------------
<S> <C> <C>
Income Before Income Taxes $24,122 $20,660
Income Taxes 8,255 6,605
----------- -----------
Net Income $15,867 $14,055
=========== ===========
</TABLE>
Excluding realized gains and losses, the Company's insurance operations
generated an increase in operating earnings of $1.6 million over the comparable
prior year quarter, broadcasting reported an increase of $.6 million, and the
Parent Company had a $1.3 million higher loss than the prior year.
The operating earnings increase from the insurance operations was due to a $1.0
million improvement in FamilySide preneed, a $.5 million improvement in Liberty
Life, and a $.1 million improvement in Liberty Insurance Services, the
Company's third party insurance administration arm. The improvement in
FamilySide's reported earnings was driven by higher net investment income, and
expense levels that were relatively flat with the prior year. Additionally,
FamilySide reported an increase in premium revenues for the first quarter of
1997, the first such increase in several quarters. FamilySide sales are
expected to continue to improve as the negative effect on sales resulting from
the transition associated with the revamping of the product portfolio over the
last year appears to be lessening. Liberty Life reported improved earnings
primarily due to continuing strong premium revenue growth and improved
mortality results in the Mortgage Protection division, offsetting a slight
decline in earnings from the Agency (home service) division compared to the
prior year quarter. The Mortgage Protection division continued to generate
strong sales growth during the first quarter, primarily on the strength of an
accidental death product.
The broadcasting operations reported a $.6 million increase in earnings
compared to the first quarter of 1996, an increase of 22%. While broadcasting
revenues increased $1.1 million (4%), strong expense controls allowed this
increase to fall to the bottom line and contribute to the overall 22% earnings
increase. Local and national revenues were strong for the quarter, and offset
the expected decline in political revenues from the comparable prior year
quarter.
The Parent Company had an additional loss of $1.3 million during the first
quarter of 1997 compared to the same quarter in 1996. This was primarily due to
the first quarter of 1996 including a one time non-recurring adjustment of $1.6
million (after-tax) related to reducing previously accrued expenses due to a
technical change in how vacation benefits are earned.
Consolidated revenues increased $13.3 million (9%) from the prior year first
quarter due to a $10.2 million (9%) increase in revenues from the insurance
operations, a $1.1 million increase in broadcasting revenues, and a $1.8
million increase in the parent company. Excluding the impact of realized
investment gains and losses, consolidated revenues increased $11.7 million
(8%).
Insurance premiums and policy charges increased $8.9 million (11%) over the
$77.5 million reported in 1996. The Liberty Life Mortgage Protection division
contributed the largest portion of this increase, with FamilySide reporting a
slight increase as well.
6
<PAGE> 7
The Liberty Corporation and Subsidiaries March 31, 1997
Management's Discussion and Analysis of Operations
The increase in broadcasting revenues for the quarter was driven by higher
national and local revenues which more than offset a decline in political
revenues, which was expected, and a slight decline in network compensation.
National and local revenues increased a combined $1.5 million over the first
quarter of 1996. The cable operations reported an increase in revenues of $.2
million over the prior year.
The $3.8 million (25%) increase in commissions is primarily related to the
growth of the Company's accidental death product group. A substantial amount of
this line of business is marketed through a third party marketer. All payments
to this third party, which include commissions and certain payments for certain
general and administrative functions, are reported as commissions expense.
The increase in other expenses is primarily attributed to lower 1996 expenses
resulting from the release of an accrual in 1996 related to a change in how
vacation benefits are earned.
INVESTMENTS
As of March 31, 1997, Liberty's consolidated investment portfolio was carried
at $2.1 billion. Approximately 73% of consolidated invested assets were in
fixed maturity securities (bonds and redeemable preferred stocks), 12% were in
mortgage loans, 6% in real estate, with the balance consisting of policy loans
(5%), equity securities (3%), and other long term investments (1%).
The overall average credit rating of fixed maturity securities as of March 31,
1997 was AA-. Less than investment grade securities comprised 2.5% of the fixed
maturity portfolio at March 31, 1997.
Approximately 43% of the Company's $1.5 billion bond portfolio at March 31,
1997, was comprised of mortgage-backed securities compared to 45% at December
31, 1996. Certain mortgage-backed securities are subject to significant
prepayment or extension risk due to changes in interest rates. In periods of
declining interest rates, mortgages may be repaid more rapidly than scheduled
as borrowers refinance higher rate mortgages to take advantage of the lower
current rates. As a result, holders of mortgage-backed securities may receive
large prepayments on their investments which cannot be reinvested at interest
rates comparable to the rates on the prepaid mortgages. In a rising interest
rate environment refinancings are significantly curtailed and the payments to
the holders of the securities decline, limiting the ability of the holder to
reinvest at the higher interest rates. Mortgage-backed pass-through securities
and sequential collateralized mortgage obligations ("CMO's"), which comprised
17% of the book value of the Company's mortgage-backed securities at March 31,
1997, and 17% at December 31, 1996, are sensitive to prepayment or extension
risk. The remaining 83% of the Company's mortgage-backed investment portfolio
at March 31, 1997 and December 31, 1996, consisted of planned amortization
class ("PAC") instruments. These investments are designed to amortize in a more
predictable manner by shifting the primary prepayment and extension risk of the
underlying collateral to investors in other tranches of the CMO.
Mortgage loans of $239.2 million comprised 12% of the consolidated investment
portfolio at March 31, 1997 Substantially all of these mortgage loans are
commercial mortgages with a loan to value ratio not exceeding 75% when made.
These loans are concentrated in the southeast primarily in the states of North
Carolina, South Carolina, Georgia, Florida, Virginia, Louisiana and Tennessee.
Investment real estate at March 31, 1997, of $131.4 million comprised 6% of the
consolidated investment portfolio, the same percentage as at December 31, 1996.
Three key property types make up the bulk of the Company's real estate
investment assets: residential land development, business parks, and business
property rentals. The majority of the Company's investment real estate is
located in South Carolina, Florida, Georgia, and North Carolina. On March 7,
1997, the Company announced that it had signed a contract to contribute
substantially all of its business rental property to a real estate investment
trust in exchange for shares of the trust and cash. Additionally, the real
estate investment trust agreed to acquire most of Liberty's business park land
development projects over a 10 year period. The transaction is expected to
close around May 15, 1997. Cash received from the transaction is expected to be
used initially to repay debt.
7
<PAGE> 8
The Liberty Corporation and Subsidiaries March 31, 1997
Management's Discussion and Analysis of Operations
FINANCIAL POSITION
In accordance with the provisions of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", the Company reported an unrealized
gain of $19.0 million on fixed maturity securities available for sale and
equity securities as of March 31, 1997. This compares with an unrealized gain
of $39.7 million at December 31, 1996. The decrease is due to the negative
impact on the market value of the portfolio associated with rising interest
rates during the first quarter. Due to the requirements of SFAS No. 115,
shareholders equity will be subject to future volatility from the effects of
interest rate fluctuations on the fair value of fixed maturity securities.
CAPITAL, FINANCING AND LIQUIDITY
The Company's net cash flow from operating activities was $13.5 million for the
first quarter of 1997 compared to $12.8 million for the same period of 1996.
The Company's net cash used in investing activities was $37.0 million, and cash
flow provided from financing activities was $3.6 million. As a result of its
activities, the Company had a $19.8 million decrease in cash compared to a
decrease of $5.8 million in the same period in 1996.
At March 31, 1997, the Company's borrowings and notes payable amounted to
$247.8 million, which was the same balance reported at December 31, 1996. As
mentioned above, the proceeds from the sale of the Company's business rental
properties, which is expected to occur during the second quarter, is expected
to be used initially to repay debt.
The Company has periodically used various interest rate swaps and caps to help
minimize the impact of a potential significant rise in short term interest
rates. (See the Company's 1996 Annual Report to Shareholders for a description
of the interest rate swaps and caps in place.) The Company has not used
interest rate swaps or any other derivative financial instruments to manage its
interest rate exposure on interest sensitive universal-life type products.
Other Company commitments are shown in Note 3 contained in the accompanying
financial statements. Additional detail as to commitments and financing is
contained in the Notes to the Consolidated Financial Statements in the
Company's annual report on Form 10K for the year ended December 31, 1996.
Further discussion of investments and valuation is contained in Notes 1 and 2
to the Consolidated Financial Statements in the Company's annual report on Form
10K for the year ended December 31, 1996.
ACCOUNTING DEVELOPMENTS
In February, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128"). This
Standard is effective for financial statements issued for periods ending after
December 15, 1997, with no early application permitted. The adoption of this
Standard is not expected to result in material differences from the earnings
per share as calculated under APB 15. For additional information, see Note 2 to
the Consolidated and Condensed Financial Statements within this report.
8
<PAGE> 9
The Liberty Corporation and Subsidiaries March 31, 1997
Management's Discussion and Analysis of Operations
FORWARD LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward looking statements. Certain information contained herein or in any
other written or oral statements made by, or on behalf of the Company, are or
may be viewed as forward looking. Although the Company has used appropriate
care in developing any such forward looking information, forward looking
information involves risks and uncertainties that could significantly impact
actual results. These risks and uncertainties include, but are not limited to,
the following: changes in general economic conditions, including the
performance of financial markets and interest rates; competitive, regulatory,
or tax changes that affect the cost of or demand for the Company's products;
and adverse litigation results. The Company undertakes no obligation to
publicly update or revise any forward looking statements, whether as a result
of new information, future developments, or otherwise.
9
<PAGE> 10
PART II, ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) A list of the exhibits filed with this report is included in
the Index to Exhibits filed herewith.
(b) The filing of Form 8-K was not required during the first
quarter of 1997.
INDEX TO EXHIBITS
-----------------
EXHIBIT 3.1 Articles of Incorporation, as Amended through May 6, 1997
EXHIBIT 10 The Liberty Corporation Performance Incentive Compensation
Program, as amended and restated on February 4, 1997, was filed as Exhibit B to
Liberty's Proxy Statement dated March 27, 1997, for its Annual Meeting of
Shareholders, which was approved by the Shareholders on May 6, 1997, and is
incorporated herein by reference.
EXHIBIT 11 Consolidated Earnings Per Share Computation
EXHIBIT 27 Financial Data Schedule (Electronic Filing Only) *
* Previously Filed
10
<PAGE> 11
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
THE LIBERTY CORPORATION Date: June 26, 1997
- -----------------------
(Registrant)
/s/ H. Ray Eanes
- ----------------
H. Ray Eanes
Senior Vice President Finance & Treasurer
/s/ Ken Jones
- -------------
Ken Jones
Corporate Controller
11
<PAGE> 1
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
RESTATED ARTICLES OF INCORPORATION
OF
THE LlBERTY CORPORATION
(As Amended)
The following Restated Articles of Incorporation supersede and take
the place of the original Articles of Incorporation of The Liberty Corporation
(the "Corporation") filed November 27, 1967 and all amendments thereto. These
Restated Articles of Incorporation and the amendments made thereby were
approved by the shareholders of the Corporation at a meeting held on May 7,
1985.
1. The name of the Corporation is "The Liberty Corporation."
2. The registered office of the Corporation is 2000 Wade Hampton
Boulevard, located in the City of Greenville, County of Greenville, and the
State of South Carolina, and the name of its registered agent at such address
is Martha G. Williams.
3. The period of duration of the Corporation shall be perpetual.
4. (a) The Corporation is authorized to issue shares of stock as
follows:
<TABLE>
<CAPTION>
Authorized Number
Class of Shares of Each Class Par Value
--------------- ------------- ---------
<S> <C> <C>
Common Stock 50,000,000 $1.00
Preferred Stock 10,000,000 $1.00
</TABLE>
The relative rights, preferences and limitations of the shares of
each class, and of each series within a class, shall be as set forth in, or
established pursuant to, this Article 4.
(b) No holders of shares of the Corporation of any class or series
shall be entitled, as a matter of right, to any preemptive rights to subscribe
for or purchase any shares of any class or series, whether now or hereafter
authorized, any options or rights to purchase any such shares, or any bonds,
debentures or other securities of the Corporation, whether or not convertible
into or carrying an option to purchase any such shares.
<PAGE> 2
(c) ln any election of Directors of the Corporation, including any
election of additional Directors under specified circumstances by the holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, a shareholder shall not be entitled to cumulate
his votes, but shall be entitled to cast for any one candidate only as many
votes as are entitled to be cast, as provided in or pursuant to this Article 4,
with respect to the number of shares held of record by such shareholder.
(d) All shares of Common Stock are of one and the same class and
when issued have equal rights of participation in dividends and assets of the
Corporation and shall be non-assessable. The holders of Common Stock shall be
entitled to one vote for each of the shares of such stock held by them of
record at any meeting of shareholders.
(e) In no event, so long as any shares of the Preferred Stock
shall be outstanding, shall any dividends whatsoever (other than dividends in
Common Stock) be paid or declared on the Common Stock, nor shall any
distribution be made on the Common Stock, unless full dividends on all
outstanding shares of the Preferred Stock of all series for all past quarterly
dividend periods and for the current quarter shall have been paid or declared
and set apart for payment.
(f)(i) The Board of Directors is hereby authorized to issue
Preferred Stock from time to time in one or more series, which Preferred Stock
shall be preferred to the Common Stock as to dividends and distribution of
assets of the Corporation on dissolution and shall have such distinctive
designations as may be stated in the resolution or resolutions providing for
the issuance of such stock adopted by the Board of Directors. In such
resolution or resolutions providing for the issuance of shares of each
particular series, the Board of Directors is expressly authorized to fix the
number of shares constituting such series and to fix the relative rights and
preferences of the shares of the series so established to the full extent
allowable by law except insofar as such rights and preferences are fixed
herein. Such authorization in the Board of Directors expressly includes the
authority to fix and determine the relative rights and preferences of such
shares in the following respects:
(A) the annual dividend rate on such shares and the date from
which dividends shall be accumulated;
(B) whether such shares may be redeemed and, if so, the
redemption price, which may vary at different dates, and the terms and
conditions of the redemption, including possible differences with respect to
any purchase, retirement or sinking fund;
(C) the amount payable upon such shares in event of voluntary
and involuntary liquidation;
2
<PAGE> 3
(D) purchase, retirement or sinking fund provisions, if any,
for the redemption or purchase of such shares;
(E) the terms and conditions, if any, on which such shares
may be convertible into, or exchangeable for, shares of Common Stock or shares
of any other series or class; and
(F) the voting rights, if any. All shares of Preferred Stock
shall be of equal rank and shall be identical, except in respect to the
particulars that may be fixed by the Board of Directors as hereinabove provided
in this subparagraph and which may vary among the series.
(ii) The holders of the Preferred Stock of each series, in
preference to the holders of the Common Stock, shall be entitled to receive, as
and when declared by the Board of Directors, cumulative cash dividends at the
rate for such series fixed in accordance with the resolution or resolutions of
the Board of Directors establishing such series, payable quarterly on dates as
may be fixed in such resolution or resolutions. No dividends shall be paid
upon, or declared on, any share of Preferred Stock for any quarterly dividend
period unless at the same time dividends for the same quarterly dividend period
shall be paid upon, or declared on, all shares of Preferred Stock of all series
then issued and outstanding ratably in proportion to the respective annual
dividend rates fixed therefor as hereinabove provided. Cash dividends upon each
series of Preferred Stock shall commence to accrue and shall be cumulative:
(A) if issued on or prior to the record date for the first
dividend on shares of such series, then from the date fixed for the purpose by
the Board of Directors in its resolutions establishing such series;
(B) if issued during the period commencing immediately after
the record date for a dividend on shares of such series and ending at the close
of the payment date for such dividend, then from such last mentioned dividend
payment date; and
(C) otherwise from the dividend payment date next preceding
the date of issue of such shares.
(iii) The holders of Preferred Stock of any series shall be
entitled to such voting rights as shall be specified in the resolution of the
Board of Directors establishing such series, including the right as a class to
elect additional Directors under specified circumstances. Holders of Common
Stock and any series of Preferred Stock having voting rights shall vote
together as one class, except with respect to matters which are required by law
to be voted upon separately and except that, at any time when the holders of
any series of Preferred Stock, voting as a class, are entitled to elect
additional Directors under
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<PAGE> 4
specified circumstances, they shall not be entitled to participate with the
holders of Common Stock in the election of any other Directors.
5. The Corporation's total authorized capital stock is $35,000,000.
6. The Corporation did not begin business until there had been paid
into the Corporation the required minimum consideration for the issuance of
shares, which was $1,000, of which at least $500 was in cash.
7. (a) Except as otherwise fixed pursuant to the provisions of Article
4 hereof relating to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation
to elect additional Directors under specified circumstances, the number of
Directors of the Corporation shall be 16; provided, however, that the number of
Directors may be fixed from time to time at any number not less than 9 nor more
than 16, by or pursuant to the bylaws of the Corporation. The Directors, other
than those who may be elected by the holders of any class or series of stock
having preference over the Common Stock as to dividends or upon liquidation,
shall be classified, with respect to the time for which they severally hold
office, into three classes, as nearly equal in number of members as possible,
as shall be provided in the manner specified in the bylaws. Such classification
may become effective with respect to an annual election of Directors held at
the same meeting of shareholders which approves this Article 7 or at any
succeeding annual election of Directors. Following effectiveness of such
classification, one class of Directors shall hold office initially for a term
expiring at the next succeeding annual meeting of shareholders, another class
shall hold office initially for a term expiring at the second succeeding annual
meeting of shareholders, and another class shall hold office initially for a
term expiring at the third succeeding annual meeting of shareholders. At each
annual meeting of the shareholders of the Corporation, the successors to the
class of Directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of shareholders held in the
third year following the year of their election, and the successor to any
Director previously elected by the Directors pursuant to paragraph (b) of this
Article 7 as a member of a class whose term is not expiring at that meeting
shall be elected by the shareholders for the remainder of the full term of the
class of Directors in which the new directorship was created or the vacancy
occurred. The members of each class of Directors shall hold office until their
successors are elected and qualified, or until their earlier resignation,
disqualifications, disability, death or removal from office.
(b) Except as otherwise fixed pursuant to the provisions of
Article 4 hereof relating to the rights of the holders of any class or series
of stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional Directors under specified circumstances, newly
created Directorships resulting from any increase in the number of Directors
and any vacancies on the Board of Directors resulting from resignation,
disqualification, disability, death, removal or other cause shall be filled
solely by the
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<PAGE> 5
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors. Any Director elected in
accordance with the preceding sentence shall hold office until the next meeting
of shareholders and until such Director's successor shall have been elected and
qualified, or until his earlier resignation, disqualification, disability,
death or removal from office. At the time of any increase in the number of
Directors, except in the case of Directors elected by the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, the Board of Directors shall specifically allocate the
additional directorships among the three classes so as to make the three
classes as nearly equal in number of members as possible. No decrease in the
number of Directors constituting the Board of Directors shall shorten the term
of any incumbent Director.
(c) Subject to the rights of any class or series of stock having
preference over the Common Stock as to dividends or upon liquidation to elect
Directors under specified circumstances, any Director may be removed from
office without cause only by the affirmative vote of the holders of at least
80% of the combined voting power of the then outstanding shares of stock of the
Corporation entitled to vote generally in the election of Directors, voting
together as a single class.
(d) The shareholders or the Board of Directors shall have power to
adopt, alter, amend and repeal the bylaws of the Corporation, subject to any
limitations or requirements specified in the bylaws.
(e) Notwithstanding anything to the contrary contained in these
Restated Articles of Incorporation, the affirmative vote of the holders of at
least 80% of the combined voting power of the then outstanding shares of stock
of the Corporation entitled to vote generally in the election of Directors,
voting together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with, or repeal, this Article 7 or any provision hereof.
8. The general nature of the business for which the Corporation is
organized is to acquire and hold all or part of the outstanding stock of one or
more corporations engaged in the insurance business or other types of
businesses, and to acquire and hold other investment assets. In addition, the
Corporation shall be authorized to undertake and carry on any lawful business
of any kind or character whatsoever and to sell and deal in real or personal
property of any kind or character whatsoever.
9. Part I.
The Corporation shall be authorized to issue bonds or debentures
convertible into other bonds or debentures of the Corporation or into shares of
stock of the Corporation within such period and upon such terms and conditions
as shall be fixed by the Directors.
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<PAGE> 6
Part II.
The Corporation shall have the power to purchase its own shares of any
class out of unreserved and unrestricted capital surplus available therefor.
Part III.
(1) In addition to any affirmative vote required by law or the
Restated Articles of Incorporation, any of the following transactions (each of
which is referred to herein as a "Business Combination") shall comply with the
requirements specified in paragraph (2) of this Part III:
(i) 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;
(ii) 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 (as hereinafter defined) of $10,000,000 or more;
(iii) 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 $10,000,000
or more;
(iv) 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
(v) 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 or any Affiliate of an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the proportionate share owned
directly or indirectly by any Interested Shareholder or any Affiliate of any
Interested Shareholder of the outstanding shares of any class of capital stock
of the Corporation entitled to vote generally in the election of Directors (the
"Voting Stock") or any securities convertible into such stock.
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<PAGE> 7
(2) A Business Combination may be consummated only if all of the
conditions specified in one or more of the following subparagraphs (A), (B) or
(C) are met:
(A) The Business Combination shall have been approved by the
affirmative vote of the holders of at least 80% of the voting power of the then
outstanding Voting Stock, voting together as a single class. Such affirmative
vote shall be required notwithstanding the fact that no vote may be required,
or that a lesser percentage may be specified, by law or in any agreement with
any national securities exchange or otherwise. For purposes of this Part III,
each share of Voting Stock shall have the number of votes prescribed in or
pursuant to Article 4 hereof.
(B) The Business Combination shall have been approved by
two-thirds of the Continuing Directors (as hereinafter defined) then in office.
(C) All of the conditions specified in clauses (i) through (iv)
of this subparagraph (C) shall have been met:
(i) The aggregate amount of 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 Common
Stock of the Corporation in such Business Combination shall be at least equal
to the highest amount determined under subclauses (a) or (b) below:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any share of Common Stock of the
Corporation acquired by it (1) within the two-year period immediately prior to
the first public announcement of the proposal of the Business Combination (the
"Announcement Date") or (2) in the transaction in which it became an Interested
Shareholder, whichever is higher; or
(b) the Fair Market Value per share of Common Stock
of the Corporation 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 Part III as the "Determination Date"), whichever is higher.
(ii) The aggregate amount of 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 any other
class or series of the Corporation's capital stock in such Business Combination
shall be at least equal to the highest amount determined under subclauses (a),
(b) or (c) below:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder
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<PAGE> 8
for any share of such class or series of the Corporation's capital stock
acquired by it (1) within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in which it became an Interested
Shareholder, whichever is higher; or
(b) the Fair Market Value per share of such class or
series of capital stock on the Announcement Date or the Determination Date
whichever is higher; or
(c) (if applicable) the highest preferential amount
per share to which the holders of shares of such class or series of capital
stock would be entitled in the event of a voluntary or involuntary liquidation
of the Corporation.
(iii) The consideration to be received by holders of a
particular class or series of the Corporation's capital stock shall be in cash
or in the same form, as the Interested Shareholder has previously paid for
shares of such class or series of capital stock. If the Interested Shareholder
has paid for shares of a class or series of the Corporation's capital stock
with varying forms of consideration, the form of consideration shall be either
cash or the form used to acquire the largest number of shares of such class or
series of capital stock previously acquired by it. The price determined in
accordance with clause (i) or (ii) of this subparagraph (C) shall be subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination of shares or similar event.
(iv) 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 the full amount of any dividends (whether or not
cumulative) on any outstanding stock having preference over the Common Stock of
the Corporation as to dividends or upon liquidation;
(b) there shall have been (1) no reduction in the
annual rate of dividends paid on the Common Stock of the Corporation (except as
necessary to reflect any subdivision of the Common Stock), except as approved
by a majority of the Continuing Directors, and (2) any increase in such annual
rate of dividends 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 have become
the beneficial owner of any additional shares of Common Stock or any other
class or series of capital
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<PAGE> 9
stock of the Corporation except as part of the transaction which results in
such Interested Shareholder becoming an Interested Shareholder.
(v) After such Interested Shareholder has become an
Interested Stockholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or otherwise.
(vi) 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 all 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).
(3) For the purposes of this Part III:
(A) The term "person" shall mean any individual, firm,
corporation or other entity.
(B) The term "Interested Shareholder" shall mean at any date any
person (other than the Corporation or any Subsidiary and other than any
profit-sharing, employee stock ownership or other employee benefit plan of the
Corporation or any Subsidiary or any trustee of or fiduciary with respect to
any such plan when acting in such capacity) who or which:
(i) is the beneficial owner (as hereinafter defined) of
more than 10% of the Voting Stock;
(ii) is an Affiliate (as hereinafter defined) of the
Corporation and at any time within the two-year period immediately prior to the
date in question was the beneficial owner of 10% or more of the Voting Stock;
or
(iii) 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 an 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.
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<PAGE> 10
(C) A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or indirectly;
(ii) which such person or any of its Affiliates or
Associates, directly or indirectly, 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; and
(iii) which is 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.
(D) For the purposes of determining whether a person is an
Interested Shareholder pursuant to subparagraph (B) of this paragraph (3), the
number of shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of subparagraph (C) of this paragraph (3) but
shall not include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(E) The terms "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
April 1, 1985.
(F) The term "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 subparagraph (B) of this paragraph (3), the
term "Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the Corporation.
(G) The term "Continuing Director" means any Director of
the Corporation who was elected as a Director at the annual meeting of the
shareholders on May 1, 1979 or who has been designated (before or after his
election to office) as a Continuing Director by a majority of the then
Continuing Directors.
(H) The term "Fair Market Value" means: (i) in the case of
stock, the highest closing sale price during the 30-day period immediately
preceding the date in question
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of a share of such stock on the national consolidated transaction reporting
system for stocks listed on the New York Stock Exchange or the American Stock
Exchange, or reported in the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or, if such stock is not
quoted on the national consolidated transaction reporting system or any system
then in use, 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
system then in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
Directors of the Corporation in good faith; and (ii) in the case of property
other than cash or stock, the fair market value of such property on the date in
question as determined in good faith by a majority of the Continuing Directors.
(I) In the event of any Business Combination in which the
Corporation survives, the phrase "other consideration to be received" as used
in clauses (i) and (ii) of subparagraph (C) of paragraph (2) of this Part III
shall include the shares of capital stock retained by the holders of such
shares.
(4) A majority of the Corporation's Directors shall have the power and
duty to determine for the purpose of this Part III, on the basis of information
known by them, (a) the number of shares of Voting Stock beneficially owned by
any person, (b) whether a person is an Affiliate or Associate of another or (c)
whether a person has an agreement, arrangement of understanding with another as
to any matter referred to in subparagraph (C) of paragraph (3) of this Part
III. Any such determination made in good faith shall be conclusive and binding
for all purposes of this Part III.
(5) Nothing contained in this Part III shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law.
(6) Notwithstanding any other provisions of the Restated Articles of
Incorporation or the bylaws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, the Restated Articles of
Incorporation or the bylaws of the Corporation), the affirmative vote of the
holders of at least 80% of the combined voting power of the then outstanding
shares of Voting Stock, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with, this Part III;
provided, however, that this paragraph (6) shall not apply to any such
amendment, repeal or adoption which has been recommended to the shareholders of
the Corporation by two-thirds of the Continuing Directors then in office.
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10. This Restatement of Articles was authorized by the Shareholders of
the Corporation at their Annual Meeting held on May 7, 1985.
Date: May 7, 1985 THE LIBERTY CORPORATION
/s/ W. Hayne Hipp
-----------------------------------
W. Hayne Hipp, President and
Chief Executive Officer
/s/ Martha G. Williams
-----------------------------------
Martha G. Williams, Vice President,
General Counsel & Secretary
STATE OF SOUTH CAROLINA )
COUNTY OF GREENVILLE )
The undersigned W. Hayne Hipp and Martha G. Williams do hereby
certify that they are the duly elected and acting President & Chief Executive
Officer and Vice President, General Counsel & Secretary, respectively, of The
Liberty Corporation and are authorized to execute this document; that each of
the undersigned for himself does hereby further certify that he signed and was
so authorized, has read the foregoing document, understands the meaning and
purport of the statements therein contained and the same are true to the best
of his information and belief.
Dated at Greenville, S. C., this 7th day of May, 1985.
/s/ W. Hayne Hipp
--------------------------------
W. Hayne Hipp
/s/ Martha G. Williams
--------------------------------
Martha G. Williams
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ARTICLES OF AMENDMENT
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
THE LIBERTY CORPORATION
Pursuant to Section 33-6-102
of the South Carolina
Business Corporation Act
We, W. Hayne Hipp, President and Chief Executive officer, and Martha
G. Williams, Vice President, General Counsel and Secretary, of The Liberty
Corporation, a corporation organized and existing under the South Carolina
Business Corporation Act ("South Carolina Law"), in accordance with the
provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Articles of Incorporation of the Corporation, the Board of
Directors on August 7, 1990, duly adopted the following amendment creating a
series of Preferred Stock in the amount and having the designation, voting
powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of such series
shall be designated as "Series A Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 140,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on the
last day of March, June, September and December of each year (each such
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date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of any share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 and (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends or other
distributions and 100 times the aggregate per share amount of all non-cash
dividends or other distributions (other than (i) a dividend payable in shares
of Common Stock (as hereinafter defined) or (ii) a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise)),
declared on the Common Stock, par value $1.00 per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock.
If the Corporation shall at any time after September 6, 1990 (the "Rights
Declaration Date") pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) above immediately after
it declares a dividend or distribution on the Common Stock (other than as
described in clauses (i) and (ii) of the first sentence of paragraph (A));
provided that if no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date (or, with respect to the
first Quarterly Dividend Payment Date, the period between the first issuance of
any share or fraction of a share of Series A Preferred Stock and such first
Quarterly Dividend Payment Date), a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
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<PAGE> 15
(C) Cash dividends on outstanding shares of Series A Preferred
Stock shall commence to accrue and shall be cumulative (i) if issued on or
prior to the record date for the first Quarterly Dividend Payment Date, from
the date of issue of such shares, (ii) if issued during the period commencing
immediately after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and ending at
the close of such Quarterly Dividend Payment Date, from such Quarterly Dividend
Payment Date or (iii) otherwise from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares. Accrued but unpaid dividends shall
not bear interest. Dividends paid on shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall not be more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of shareholders of the Corporation,
except that, at any time when the holders of Series A Preferred Stock are
entitled to elect two directors pursuant to Section 3(C) below, they shall not
be entitled to participate with the holders of Common Stock in the election of
any other directors. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser number
of shares of Common-Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
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<PAGE> 16
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as a single class on all matters submitted to a vote of
shareholders of the Corporation.
(C) (i) If at any time dividends on any series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Series A Preferred Stock and any
other series of Preferred Stock then entitled as a class to elect directors,
voting together as a single class, irrespective of series, shall have the right
to elect two Directors.
(ii) During any default period, such voting right of the holders
of Series A Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of shareholders, and thereafter at annual meetings of shareholders,
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of 10% in
number of shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of holders of Common Stock shall not affect
the exercise by holders of Preferred Stock of such voting right. At any meeting
at which holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting-as a
class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is exercised
at an annual meeting, to elect two Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by them of
the required number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of
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the holders of Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the Series A
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder or shareholders
owning in the aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling
of special meeting of holders of Preferred Stock, which meeting shall thereupon
be called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 10 days
and not later than 50 days after such order or request or in default of the
calling of such meeting within 50 days after such order or request, such
meeting may be called on similar notice by any shareholder or shareholders
owning in the aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
-5-
<PAGE> 18
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Restated Articles of Incorporation or
bylaws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Restated Articles of
Incorporation or bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining Directors.
(D) The Restated Articles of Incorporation of the Corporation
shall not be amended in any manner (whether by merger or otherwise) so as to
adversely affect the powers, preferences or special rights of the Series A
Preferred Stock without the affirmative vote of the holders of a majority of
the outstanding shares of Series A Preferred Stock, voting separately as a
class.
(E) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent shall
not be required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred
stock, except dividends paid ratably on
-6-
<PAGE> 19
the Series A Preferred Stock and all such other parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of stock of the
Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of Series A Preferred Stock and all such other
parity stock upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock without designation as to series 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 as permitted by the
-7-
<PAGE> 20
Restated Articles of Incorporation or as otherwise permitted under South
Carolina Law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such other parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Corporation shall at any time after the
Rights Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash or any other property, as the case may be,
-8-
<PAGE> 21
into which or for which each share of Common Stock is changed or exchanged. If
the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number-of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank junior (as
to dividends and upon liquidation, dissolution and winding up) to all other
series of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
Section 10. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
Section 11. Adoption of Articles of Amendment. These Articles were
duly adopted by the Board of Directors without shareholder action pursuant to
authority conferred upon the Board of Directors by the Restated Articles of
Incorporation of the Corporation. Shareholder action was not required for
adoption of these Articles of Amendment under the Restated Articles of
Incorporation of the Corporation.
-9-
<PAGE> 22
IN WITNESS WHEREOF, we have executed and subscribed these Articles
this 10th day of August, 1990.
THE LIBERTY CORPORATION
/s/ W. Hayne Hipp
------------------------------
W. Hayne Hipp, President and
Chief Executive Officer
/s/ Martha G. Williams
-------------------------------
Martha G. Williams, Vice President,
General Counsel and Secretary
STATE OF SOUTH CAROLINA )
COUNTY OF GREENVILLE )
The undersigned W. Hayne Hipp and Martha G. Williams do
hereby certify that they are the duly elected and acting President & Chief
Executive Officer and Vice President, General Counsel & Secretary,
respectively, of The Liberty Corporation and are authorized to execute this
document; that each of the undersigned for himself or herself does hereby
further certify that he or she signed and was so authorized, has read the
foregoing document, understands the meaning and purport of the statements
therein contained and the same are true to the best of his or her information
and belief.
Dated at Greenville, S.C., this 10th day of August, 1990.
THE LIBERTY CORPORATION
/S/ W. Hayne Hipp
-------------------------------------
W. Hayne Hipp
/s/ Martha G. Williams
--------------------------------------
Martha G. Williams
-10-
<PAGE> 23
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant ss.Section 3-10-106 of the 1976 South Carolina Code, as amended,
the under-signed corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION.
2. On November 5, 1991, the corporation adopted the following Amendment(s) of
its Articles of Incorporation.
(Type or attach the complete text of Each Amendment)
See attachment
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
N/A
4. Complete either a or b, whichever is applicable.
a. [ ] Amendment(s) adopted by shareholder action.
At the date of adoption of the amendment, the number of outstanding
shares of each voting group entitled to vote separately on the
Amendment, and the vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented Shares Voted
Group Shares to be Cast at the meeting For Against
- ----- ------ ---------- -------------- ----------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 24
FURTHER RESOLVED, that Article 4(a) of the Certificate of Incorporation,
as heretofore amended by certificates filed pursuant to law, is amended to read
in its entirety as follows:
"4.(a) The Corporation is authorized to issue shares of stock as follows:
<TABLE>
<CAPTION>
Authorized Number
Class of Shares of Each Class Par Value
- --------------- ------------------ ---------
<S> <C> <C>
Common Stock 50,000,000 $1.00
Preferred Stock 10,000,000 $1.00
</TABLE>
The relative rights, preferences and limitations of the shares of each
class, and of each series within a class, shall be as set forth in, or
established pursuant to, this Article 4."
/s/ Martha G. Williams
-----------------------
Martha G. Williams
Vice President
General Counsel and Secretary
<PAGE> 25
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can
alternatively State the total number of undisputed shares cast for
the amendment by each voting group together with a statement that the
number of cast for the amendment by each voting group was sufficient
for approval by that voting group.
b. [X] The amendment(s) was duly adopted by the Incorporators or board
of directors without shareholder approval pursuant to Sections
33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina
Code as amended, and shareholder action was not required.
5. Unless a delayed date is specified, the effective date of these Articles
of Amendments shall be the date of acceptance for filing by the Secretary
of State (See Section 33-1-230(b))____________.
DATE: November 8, 1991 THE LIBERTY CORPORATION
---------------- -------------------------------------------
(Name of Corporation)
By:/s/ Martha G. Williams
-------------------------------------------
(Signature)
MARTHA G. WILLIAMS
-------------------------------------------
(Type or Print Name and Office)
Vice President, General Counsel & Secretary
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or a
conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional sheets
containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of filling
application.
<TABLE>
<CAPTION>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
Form Approved by South Carolina
Secretary of State 1/89
<PAGE> 26
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant Section 3-10-106 of the 1976 South Carolina Code, as amended,
the under-signed corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION.
2. On May 5, 1992, the corporation adopted the following Amendment(s) of its
Articles of Incorporation.
(Type or attach the complete text of Each Amendment)
See Exhibit A attached hereto.
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
N/A
4. Complete either a or b, whichever is applicable.
a. [X] Amendment(s) adopted by shareholder action.
At the date of adoption of the amendment, the number of
outstanding shares of each voting group entitled to vote
separately on the Amendment, and the vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented Shares Voted
Group Shares to be Cast at the meeting For Against
- ----- ------ ---------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Common Stock 15,877,310 15,877,310 15,301,378 15,018,859 101,440
</TABLE>
<PAGE> 27
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can alternatively
State the total number of undisputed shares cast for the amendment by
each voting group together with a statement that the number of cast
for the amendment by each voting group was sufficient for approval by
that voting group.
b. [ ] The amendment(s) was duly adopted by the Incorporators or board
of directors without shareholder approval pursuant to Sections
33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina
Code as amended, and shareholder action was not required.
5. Unless a delayed date is specified, the effective date of these Articles
of Amendments shall be the date of acceptance for filing by the Secretary
of State (See Section 33-1-230(b))____________.
DATE: May 5, 1992 THE LIBERTY CORPORATION
----------- ------------------------------------------
(Name of Corporation)
By: /s/ Martha G. Williams
---------------------------------------
(Signature)
Vice President, General Counsel & Secretary
-------------------------------------------
(Type or Print Name and Office)
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or a
conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional sheets
containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of filling
application.
<TABLE>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
Form Approved by South Carolina
Secretary of State 1/89
<PAGE> 28
EXHIBIT A
AMENDMENT TO THE ARTICLES OF INCORPORATION
Article 4.(a) of the Articles of Incorporation of The Liberty
Coropration, as previously amended, shall be further amended by deleting
wherever used the term, "Par Value", and the amount of Par Value, so that upon
adoption of this Amendment, Article 4.(a) of the Articles of Incorporation will
read as follows:
4.(a) The Corporation is authorized to issue shares
of stock as follows:
<TABLE>
<CAPTION>
Authorized Number
Class of Shares of Each Class
--------------- -------------
<S> <C>
Common Stock 50,000,000
Preferred Stock 10,000,000
</TABLE>
The relative rights, preferences and limitations of the shares of
each class, and of each series within a class, shall be as set forth in,
or established pursuant to, this Article 4.
<PAGE> 29
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant ss.Section 3-10-106 of the 1976 South Carolina Code, as amended,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION
2. On February 23, 1994, the corporation adopted the following Amendment(s)
of its Articles of Incorporation.
(Type or attach the complete text of Each Amendment)
SEE EXHIBIT A ATTACHED HERETO
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
N/A
4. Complete either a or b, whichever is applicable.
a. [ ] Amendment(s) adopted by shareholder action.
At the date of adoption of the amendment, the number of outstanding
shares of each voting group entitled to vote separately on the
Amendment, and the vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented at Shares Voted
Group Shares to be Cast the meeting For Against
- ----- ------ ---------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 30
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can
alternatively State the total number of undisputed shares cast for
the amendment by each voting group together with a statement that the
number of cast for the amendment by each voting group was sufficient
for approval by that voting group.
b. [X] The Amendment(s) was duly adopted by the Incorporators or board
of directors without shareholder approval pursuant to
ss.33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South
Carolina Code as amended, and shareholder action was not
required.
5. Unless a delayed date is specified, the effective date of these
Articles of Amendments shall be the date of acceptance for filing by
the Secretary of State (See ss.33-1-230(b)) _______________.
DATE: February 23, 1994 THE LIBERTY CORPORATION
----------------- ----------------------------------------
(Name of Corporation)
By: /s/ Martha G. Williams
------------------------------------
(Signature)
Martha G. Williams, Vice President,
General Counsel and Secretary
----------------------------------------
(Type or Print Name and Office)
2
<PAGE> 31
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or a
conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional sheets
containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of filing
application.
<TABLE>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
3
<PAGE> 32
EXHIBIT A
TO
ARTICLES OF AMENDMENT
OF
THE LIBERTY CORPORATION
Establishing
Series 1994-B Voting Cumulative
Preferred Stock
The Restated Articles of Incorporation of The Liberty Corporation (the
"Corporation"), as previously amended, are hereby further amended to establish
a special series of preferred stock and to set forth the preferences,
limitations and relative rights of such series of preferred stock, all in
accordance with resolutions adopted by the Board of Directors on December 15,
1993 and resolutions adopted by a Special Committee of the Board of Directors
on February 23, 1994 (acting under specific authorization of the Board of
Directors), all pursuant to the authority granted by Article 4 of the Restated
Articles of Incorporation of the Corporation, which preferences, limitations
and relative rights are as follows:
1. Designation and Number of Preferred Shares. The series of
preferred stock, no par value, established by the Board of Directors as
described herein shall consist of 600,000 shares and shall be designated
"Series 1994-B Voting Cumulative Preferred Stock" (hereinafter, the "1994-B
Preferred Stock").
2. Dividends. Dividends on the 1994-B Preferred Stock shall be
at the rate of 5.6% per annum, shall accrue daily (whether or not declared) on
the basis of a 360-day year of twelve 30-day months, shall be paid on or before
the last day of each calendar quarter, but only as and when declared by the
Board of Directors in accordance with applicable law (and subject to the
Corporation's right to defer payment of dividends with respect to affected
shares of 1994-B Preferred Stock until the owners complete applicable
procedures for the issuance to them of stock certificates pursuant to the
merger of American Funeral Assurance Company with a subsidiary of the
Corporation (the "American Merger")), and shall commence to accrue and shall be
cumulative (but unpaid, accumulated dividends shall not accrue dividends or
bear interest), as follows:
(a) if issued as of the effective date of the American
Merger, then from and including the effective date of the American Merger;
(b) if issued as of a date after the effective date of
the American Merger but during the period commencing immediately after the
record date for a dividend on the 1994-B Preferred Shares and ending at the
close of the calendar quarter for such dividend, then from the end of the
calendar quarter for which such last dividend payment was made; and
(c) otherwise from the beginning of the calendar quarter
in which such shares are issued.
3. Rank. No dividends or any other distributions on the common
shares of the Corporation (the "Common Stock") or any other stock of the
Corporation ranking junior to the 1994-B Preferred Stock shall be paid or
declared and set apart for payment unless all accumulated and unpaid dividends
(whether or not declared) on the 1994-B Preferred Stock have been paid or
declared and set apart for payment. The 1994-B Preferred Stock shall be on a
parity with all other series of preferred stock of the Corporation as to
payment of dividends or other distributions (including upon liquidation),
whether such series are now existing or are created in the future, unless a
series of preferred stock of the Corporation expressly provides that it is
either senior or junior to the 1994-B Preferred Stock.
-1-
<PAGE> 33
4. Voting Rights. The holders of shares of 1994-B Preferred
Stock shall be entitled to one vote per share on any matters submitted to a
vote of the shareholders of the Corporation and on any other matters required
by applicable law to be submitted to a vote of the holders of the 1994-B
Preferred Stock.
5. Redemption--At Election of the Corporation.
(a) Generally. Subject to applicable law, the
Corporation has the right to elect to redeem any or all of the 1994-B Preferred
Stock from time to time at any time after March 24, 1999 in exchange for either
cash or Common Stock in an amount determined in accordance with Section 8
hereof and otherwise on the terms set forth in this Section 5. If less than all
of the issued and outstanding shares of 1994-B Preferred Stock are to be
redeemed, then the shares of 1994-B Preferred Stock to be redeemed shall be
selected either pro rata, by lot, or in such other equitable manner as
determined by the Board of Directors.
(b) Notice of Redemption. The Corporation shall give
written notice of its election to redeem 1994-B Preferred Stock pursuant to
this Section 5 to each registered holder of the shares of 1994-B Preferred
Stock to be redeemed. Such notice shall set forth the total number of shares of
1994-B Preferred Stock being redeemed from such holder and in the aggregate and
the date of the redemption selected by the Corporation. The Corporation's
redemption notice shall be mailed to each such registered holder's address
specified in the share records of the Corporation by first class mail, postage
prepaid, not less than 30 days nor more than 60 days prior to the redemption
date selected by the Corporation.
(c) The Redemption. The 1994-B Preferred Stock as to
which the Corporation's redemption notice has been given shall be redeemed on
the date specified in such notice. On the redemption date: (i) the Corporation
shall deliver (or make available for delivery upon compliance with clause (ii)
of this Section 5(c)) the Redemption Consideration (defined in Section 8
hereof) to the registered holders of shares of 1994-B Preferred Stock being
redeemed, which Redemption Consideration shall include any accumulated and
unpaid dividends (whether or not declared) to and including the redemption
date; and (ii) such holders shall deliver (or shall have delivered prior to
such redemption date) to the Corporation in exchange for such Redemption
Consideration the share certificates representing the 1994-B Preferred Stock
being redeemed, duly endorsed by the registered holders in blank or with
executed stock powers duly executed by the registered holders in blank, in each
case with signatures guaranteed by a financial institution or brokerage firm
having membership in good standing in a recognized guarantee program. In case
less than all the shares of 1994-B Preferred Stock represented by any such
certificates are redeemed, new share certificates representing the unredeemed
shares of 1994-B Preferred Stock shall be issued to such holders without cost
to such holders.
6. Failure to Surrender Certificates; Effect of Redemption. When
the Corporation has duly and properly given notice for redemption of 1994-B
Preferred Stock in accordance with Section 5(b) and applicable law and any
registered holder of the 1994-B Preferred Stock fails to present the
certificate(s) representing the 1994-B Preferred Stock to be redeemed or
otherwise take action required by the Corporation's redemption notice in
accordance with the Restated Articles of Incorporation and applicable law then,
as of the redemption date: (i) the 1994-B Preferred Stock held by such
registered holder shall be deemed to have been redeemed and to be no longer
outstanding; (ii) each such holder's right to receive dividends on such 1994-B
Preferred Stock shall cease to accrue; and (iii) all other rights with respect
to such 1994-B Preferred Stock shall cease and terminate, except the right of
each such holder to receive the Redemption Consideration distributable to such
holder upon such redemption, without interest.
7. Redemption--At Request of Holder.
(a) Generally. Subject to applicable law, each
registered holder of 1994-B Preferred Stock has the right to require the
Corporation, at any time after March 24, 1999, to redeem any or all of such
holder's 1994-B Preferred Stock in exchange for cash or Common Stock in an
amount determined in accordance with Section 8 hereof and otherwise on the
terms set forth in this Section 7.
-2-
<PAGE> 34
(b) Request for Redemption and Notice of Redemption. If
a registered holder of 1994-B Preferred Stock desires to have any or all of
such holder's 1994-B Preferred Stock redeemed, then such holder shall give
written notice of such desire to the Corporation at the Corporation's principal
executive office to the attention of the Legal Department or at such other
office or agency designated by the Corporation for such purpose, accompanied by
the share certificates representing the 1994-B Preferred Stock being redeemed,
duly endorsed by the registered holder in blank or with executed stock powers
duly executed by the registered holder in blank, in each case with signatures
guaranteed by a financial institution or brokerage firm having membership in
good standing in a recognized guarantee program. A holder of 1994-B Preferred
Stock may give no more than one such notice during any calendar year. Within 10
days after the Corporation's receipt of such holder's redemption request
notice, the Corporation may give such holder written notice at such holder's
address set forth in the redemption request notice, or if none is set forth in
such notice, to such holder's address in the share records of the Corporation,
setting forth a date, not sooner than 10 days nor later than 60 days from the
Corporation's giving of its redemption notice, which shall be the redemption
date for the stock covered by such notice. Unless the Corporation gives any
such notice specifying a different date for redemption, the redemption pursuant
to this Section 7(b) shall be effective as of the last day of the calendar
quarter during which the Corporation receives such holder's redemption request
notice.
(c) The Redemption. On the applicable redemption date,
the Corporation, directly or through its agent, shall redeem the shares of
1994-B Preferred Stock as to which the redemption request notice has been
received by the Corporation and shall deliver or send the Redemption
Consideration (defined in Section 8 hereof) to the registered holder of the
1994-B Preferred Stock being redeemed. In case less than all the shares of
1994-B Preferred Stock represented by any surrendered certificate are redeemed,
a new share certificate representing the unredeemed shares of 1994-B Preferred
Stock shall be issued to such holder without cost to such holder.
8. Redemption Consideration. The consideration delivered by the
Corporation in exchange for the shares of 1994-B Preferred Stock redeemed (the
"Redemption Consideration") shall be paid, at the Corporation's option, in
cash, shares of Common Stock, or a combination of cash and Common Stock, as
follows:
(a) for shares redeemed in cash, an amount equal to
$37.50 per share of 1994-B Preferred Stock redeemed, plus any accumulated and
unpaid dividends (whether or not declared) to and including the redemption
date, such consideration to be paid by check; and
(b) for shares redeemed in Common Stock, the Corporation
shall deliver share certificates representing: (i) the number of shares of
Common Stock having a "market value" equal to the sum of $37.50 plus the amount
of any accumulated and unpaid dividends per share (whether or not declared) on
the 1994-B Preferred Stock times the number of shares of 1994-B Preferred Stock
being redeemed, or (ii) in the case of a redemption pursuant to Section 5, the
number of shares of Common Stock into which the 1994-B Preferred Stock could
have been converted on the last business day before the redemption date (if
such conversion were permissible under Section 11), but only if such number of
shares is higher than the number of shares computed pursuant to clause (i). As
used herein, "market value" shall be based on the average of the daily closing
prices of the shares of Common Stock for the ten consecutive business days
ending on the third day before the redemption date.
9. Negotiated Repurchase. In addition to or in lieu of
exercising any redemption rights provided herein, the Corporation and any
holder of the 1994-B Preferred Stock may negotiate and agree upon terms
pursuant to which the Corporation will repurchase any or all of the shares of
1994-B Preferred Stock held by such shareholder. Any such negotiated purchase
may be consummated without restriction or requirement as to time, amount paid
by the Corporation, pro rata repurchase by the Corporation, or any other
restriction or requirement contained herein.
10. No Sinking Fund. No sinking fund exists for the redemption of
1994-B Preferred Stock.
11. Conversion Rights of 1994-B Preferred Stock into Common
Stock.
(a) Right to Convert. At the option of the holder
thereof and upon compliance with the provisions of this Section 11 as to
surrender thereof, each share of the 1994-B Preferred Stock shall be
convertible
-3-
<PAGE> 35
at any time into fully paid and nonassessable Common Stock at the rate of one
share of Common Stock of the Corporation for each such share of 1994-B
Preferred Stock; provided, however, that if the Corporation has given notice
for redemption of such holder's shares of 1994-B Preferred Stock, the right of
conversion as to such shares shall terminate at the close of business on the
seventh day prior to the redemption date; and provided, further, that if
default shall be made by the Corporation in the payment of the Redemption
Consideration for such shares, then conversion rights in respect thereof, if
any, shall again be in full force and effect.
(b) Procedure. Before any holder of shares of the 1994-B
Preferred Stock shall be entitled to convert the same into Common Stock, such
holder shall surrender the certificate or certificates for such 1994-B
Preferred Stock, duly assigned to the Corporation at its principal executive
office, or at such other office or agency designated by the Corporation for
such purpose, accompanied by written notice to the Corporation of the election
to convert such shares into Common Stock, stating therein the name or names in
which the certificate or certificates of Common Stock are to be issued. In case
such notice shall specify a name or names other than that of such holder, such
notice shall be accompanied by payment of any and all transfer taxes payable
upon the issue of Common Stock in such name or names and such other
documentation reasonably requested by the Corporation.
(1) As soon as practicable after such surrender
of certificate or certificates, the Corporation shall issue and deliver to such
holder, or to his nominee or nominees, a certificate or certificates for the
number of shares of Common Stock to which he shall be entitled. Such conversion
shall be deemed to have been made as of the next business day following the
Corporation's receipt of such certificate or certificates for shares of 1994-B
Preferred Stock to be converted, accompanied by any required taxes or other
documentation, and on and after such date 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 shares of Common Stock.
(2) No payment or adjustment shall be made on
account of any dividends accumulated and unpaid on any shares of 1994-B
Preferred Stock surrendered for conversion or on account of any dividends on
the Common Stock issuable on such conversion.
(c) Conversion Adjustments.
(1) If the Corporation shall (i) pay a dividend payable in Common
Stock, (ii) subdivide outstanding Common Stock into a larger number of shares
of Common Stock by reclassification or otherwise, or (iii) combine its
outstanding Common Stock into a smaller number of shares of Common Stock by
reclassification or otherwise, then in each such case, the holder of each share
of 1994-B Preferred Stock shall thereafter be entitled to receive upon the
conversion of such share, the number of shares of Common Stock which such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such 1994-B Preferred Stock been
converted immediately prior to the happening of such event.
(2) In the case of any capital reorganization
of the Corporation or of anyreclassification of the Common Stock, or in the
case of the consolidation of the Corporation with or the merger of the
Corporation with or into any other entity or of the sale, lease or other
transfer of all or substantially all of the assets of the Corporation to any
other person, the 1994-B Preferred Stock shall after such capital
reorganization, reclassification, consolidation, merger, sale, lease or other
transfer be convertible into the number of shares of stock or other securities
or property which a holder of the Common Stock issuable (at the time of such
capital reorganization, reclassification, consolidation, merger, sale, lease or
other transfer) upon conversion of the 1994-B Preferred Stock would have been
entitled upon such capital reorganization, reclassification, consolidation,
merger, sale, lease or other transfer; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interest thereafter
of the holders of the 1994-B Preferred Stock shall be appropriately adjusted so
as to be applicable, as nearly as may reasonably be, to any shares of stock or
other securities or property thereafter deliverable on the conversion of the
1994-B Preferred Stock. The subdivision or combination of Common Stock issuable
upon conversion of 1994-B Preferred Stock at any time outstanding into a
greater or lesser number of shares of Common
-4-
<PAGE> 36
Stock (whether with or without par value) shall not be deemed to be a
reclassification of the Common Stock of the Corporation for the purposes of
this Section 11(c)(2).
(3) No fractional shares of Common Stock shall
be issued on any conversion, but in lieu thereof the Corporation shall, at its
option: (i) pay therefor cash in an amount equal to the current market value of
such fractional interest, or (ii) make such arrangements as the Board of
Directors shall approve to enable the holder of a fractional interest to sell
such interest or buy an additional fractional interest sufficient to make one
whole share of Common Stock.
(d) Reservation of Common Stock. The Corporation shall
reserve at all times while any 1994-B Preferred Stock remains outstanding, free
from preemptive rights, out of its treasury shares or its authorized but
unissued Common Stock, or both, solely for the purposes of effecting the
conversion of the 1994-B Preferred Stock, sufficient shares of Common Stock to
provide for the conversion of all outstanding 1994-B Preferred Stock.
(e) Valid Issuance. All shares of Common Stock which may
be issued upon conversion of the 1994-B Preferred Stock will, upon issuance by
the Corporation, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issuance of them,
and the Corporation shall take no action which causes a contrary result.
12. Liquidation Rights. Upon the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, after payment or
provision for payment of the debts and other liabilities of the Corporation,
the registered holders of the 1994-B Preferred Stock then outstanding shall be
entitled to receive out of the net assets of the Corporation, before any
payment or distribution shall be made on the Common Stock, cash or other
property having a fair market value or some combination thereof in an amount
equal to $37.50 per share, plus an amount equal to all accumulated and unpaid
dividends (whether or not earned or declared) to and including the date of
final distribution to the registered holders of the 1994-B Preferred Stock, and
no more, before any distribution shall be made to the registered holders of
Common Stock. If the assets of the Corporation available for distribution to
the registered holders of 1994-B Preferred Stock shall be insufficient to pay
the full amount to which all such holders are entitled pursuant to the
foregoing, then each such holder shall be entitled to share pro rata in the
amounts so available. Neither the merger or consolidation of the Corporation,
nor the sale, lease or conveyance of all or a part of its assets, shall be
deemed to be a liquidation, dissolution or winding up of the affairs of the
Corporation.
* * * * *
-5-
<PAGE> 37
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant to Section 3-10-106 of the 1976 South Carolina Code, as amended,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION
2. On March 28, 1994, the corporation adopted the following Amendment(s) of
its Articles of Incorporation:
(Type or attach the complete text of each Amendment)
SEE EXHIBIT A ATTACHED HERETO
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
NOT APPLICABLE
4. Complete either a or b, whichever is applicable.
a. [ ] Amendment(s) adopted by shareholder action. At the date of
adoption of the amendment, the number of outstanding shares of each
voting group entitled to vote separately on the Amendment, and the
vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented at Shares Voted
Group Shares to be Cast the meeting For Against
- ----- ------ ---------- ----------- --------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 38
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can
alternatively state the total number of undisputed shares cast for
the amendment by each voting group together with a statement that the
number of shares cast for the amendment by each voting group was
sufficient for approval by that voting group.
b. [X] The Amendment(s) was duly adopted by the incorporators or board
of directors without shareholder approval pursuant to
ss.33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South
Carolina Code as amended, and shareholder action was not
required.
5. Unless a delayed date is specified, the effective date of these Articles
of Amendment shall be the date of acceptance for filing by the Secretary
of State (See ss.33-1-230(b)): _______________
DATE March 28, 1994 THE LIBERTY CORPORATION
-------------- ---------------------------------------
(Name of Corporation)
By: /s/ Martha G. Williams
----------------------------------------
(Signature)
Martha G. Williams, Vice President,
General Counsel and Secretary
----------------------------------------
(Type or Print Name and Office)
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or
a conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional
sheets containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of
filing application.
<TABLE>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
Form Approved by South Carolina
Secretary of State 1/89
2
<PAGE> 39
EXHIBIT A
TO
ARTICLES OF AMENDMENT
OF
THE LIBERTY CORPORATION
ESTABLISHING
SERIES 1994-A VOTING CUMULATIVE
PREFERRED STOCK
The Restated Articles of Incorporation of The Liberty Corporation (the
"Corporation"), as previously amended, are hereby further amended to establish
a special series of preferred stock and to set forth the preferences,
limitations and relative rights of such series of preferred stock, all in
accordance with resolutions adopted by the Board of Directors on February 1,
1994 and resolutions adopted by a Special Committee of the Board of Directors
on March 28, 1994 (acting under specific authorization of the Board of
Directors), all pursuant to the authority granted by Article 4 of the Restated
Articles of Incorporation of the Corporation, which preferences, limitations
and relative rights are as follows:
1. Designation and Number of Preferred Shares. The series of preferred
stock, no par value, established by the Board of Directors as described herein
shall consist of 670,000 shares and shall be designated "Series 1994-A Voting
Cumulative Preferred Stock" (hereinafter, the "1994-A Preferred Stock").
2. Dividends. Dividends on the 1994-A Preferred Stock shall be at the
rate of 6% per annum, shall accrue daily (whether or not declared) on the basis
of a 360-day year of twelve 30- day months, shall be paid (i) with respect to
the first calendar quarter during which any 1994-A Preferred Stock is issued,
in advance for the remainder of such calendar quarter on each share of 1994-A
Preferred Stock issued pursuant to the merger of State National Capital
Corporation with and into the Corporation (the "State National Merger"), on the
next business day after the effective date of the State National Merger and
(ii) thereafter on or before the last day of each calendar quarter, but only as
and when declared by the Board of Directors in accordance with applicable law
(and subject to the Corporation's right to defer payment of dividends with
respect to affected shares of 1994-A Preferred Stock until the owners complete
applicable procedures for the issuance to them of stock certificates pursuant
to the State National Merger), and shall commence to accrue and shall be
cumulative (but unpaid, accumulated dividends shall not accrue dividends or
bear interest), as follows:
(a) if issued as of the effective date of the State National Merger,
then from and including the effective date of the State National Merger;
<PAGE> 40
(b) if issued as of a date after the effective date of the State
National Merger but during the period commencing immediately after the
record date for a dividend on the 1994-A Preferred Shares and ending at
the close of the calendar quarter for such dividend, then from the end of
the calendar quarter for which such last dividend payment was made; and
(c) otherwise from the beginning of the calendar quarter in which
such shares are issued.
3. Rank. No dividends or any other distributions on the common shares of
the Corporation (the "Common Stock") or any other stock of the Corporation
ranking junior to the 1994-A Preferred Stock shall be paid or declared and set
apart for payment unless all accumulated and unpaid dividends (whether or not
declared) on the 1994-A Preferred Stock have been paid or declared and set
apart for payment. The 1994-A Preferred Stock shall be on a parity with all
other series of preferred stock of the Corporation as to payment of dividends
or other distributions (including upon liquidation), whether such series are
now existing or are created in the future, unless a series of preferred stock
of the Corporation expressly provides that it is either senior or junior to the
1994-A Preferred Stock.
4. Voting Rights. The holders of shares of 1994-A Preferred Stock shall
be entitled to one vote per share on any matters submitted to a vote of the
shareholders of the Corporation and on any other matters required by applicable
law to be submitted to a vote of the holders of the 1994-A Preferred Stock.
5. Redemption--At Election of the Corporation.
(a) Generally. Subject to applicable law, the Corporation has the
right to elect to redeem any or all of the 1994-A Preferred Stock from time to
time at any time after May 1, 1999 in exchange for either cash or Common Stock
in an amount determined in accordance with Section 8 hereof and otherwise on
the terms set forth in this Section 5. If less than all of the issued and
outstanding shares of 1994-A Preferred Stock are to be redeemed, then the
shares of 1994-A Preferred Stock to be redeemed shall be selected either pro
rata, by lot, or in such other equitable manner as determined by the Board of
Directors.
(b) Notice of Redemption. The Corporation shall give written notice
of its election to redeem 1994-A Preferred Stock pursuant to this Section 5 to
each registered holder of the shares of 1994-A Preferred Stock to be redeemed.
Such notice shall set forth the total number of shares of 1994-A Preferred
Stock being redeemed from such holder and in the aggregate and the date of the
redemption selected by the Corporation. The Corporation's redemption notice
shall be mailed to each such registered holder's address specified in the share
records of the Corporation by first class mail, postage prepaid, not less than
30 days nor more than 60 days prior to the redemption date selected by the
Corporation.
-2-
<PAGE> 41
(c) The Redemption. The 1994-A Preferred Stock as to which the
Corporation's redemption notice has been given shall be redeemed on the date
specified in such notice. On the redemption date: (i) the Corporation shall
deliver (or make available for delivery upon compliance with clause (ii) of
this Section 5(c)) the Redemption Consideration (defined in Section 8 hereof)
to the registered holders of shares of 1994-A Preferred Stock being redeemed,
which Redemption Consideration shall include any accumulated and unpaid
dividends (whether or not declared) to and including the redemption date; and
(ii) such holders shall deliver (or shall have delivered prior to such
redemption date) to the Corporation in exchange for such Redemption
Consideration the share certificates representing the 1994-A Preferred Stock
being redeemed, duly endorsed by the registered holders in blank or with
executed stock powers duly executed by the registered holders in blank, in each
case with signatures guaranteed by a financial institution or brokerage firm
having membership in good standing in a recognized guarantee program. In case
less than all the shares of 1994-A Preferred Stock represented by any such
certificates are redeemed, new share certificates representing the unredeemed
shares of 1994-A Preferred Stock shall be issued to such holders without cost
to such holders.
6. Failure to Surrender Certificates; Effect of Redemption. When the
Corporation has duly and properly given notice for redemption of 1994-A
Preferred Stock in accordance with Section 5(b) and applicable law and any
registered holder of the 1994-A Preferred Stock fails to present the
certificate(s) representing the 1994-A Preferred Stock to be redeemed or
otherwise take action required by the Corporation's redemption notice in
accordance with the Restated Articles of Incorporation and applicable law then,
as of the redemption date: (i) the 1994-A Preferred Stock held by such
registered holder shall be deemed to have been redeemed and to be no longer
outstanding; (ii) each such holder's right to receive dividends on such 1994-A
Preferred Stock shall cease to accrue; and (iii) all other rights with respect
to such 1994-A Preferred Stock shall cease and terminate, except the right of
each such holder to receive the Redemption Consideration distributable to such
holder upon such redemption, without interest.
7. Redemption--At Request of Holder.
(a) Generally. Subject to applicable law, each registered holder of
1994-A Preferred Stock has the right to require the Corporation, at any time
after May 1, 1999, to redeem any or all of such holder's 1994-A Preferred Stock
in exchange for cash or Common Stock in an amount determined in accordance with
Section 8 hereof and otherwise on the terms set forth in this Section 7.
(b) Request for Redemption and Notice of Redemption. If a registered
holder of 1994-A Preferred Stock desires to have any or all of such holder's
1994-A Preferred Stock redeemed, then such holder shall give written notice of
such desire to the Corporation at the Corporation's principal executive office
to the attention of the Legal Department or at such other office or agency
designated by the Corporation for such purpose, accompanied by the share
certificates representing the 1994-A Preferred Stock being redeemed, duly
endorsed by the registered holder in blank or with executed stock powers duly
executed by the registered holder
-3-
<PAGE> 42
in blank, in each case with signatures guaranteed by a financial institution or
brokerage firm having membership in good standing in a recognized guarantee
program. A holder of 1994-A Preferred Stock may give no more than one such
notice during any calendar year. Within 10 days after the Corporation's receipt
of such holder's redemption request notice, the Corporation may give such
holder written notice at such holder's address set forth in the redemption
request notice, or if none is set forth in such notice, to such holder's
address in the share records of the Corporation, setting forth a date, not
sooner than 10 days nor later than 60 days from the Corporation's giving of its
redemption notice, which shall be the redemption date for the stock covered by
such notice. Unless the Corporation gives any such notice specifying a
different date for redemption, the redemption pursuant to this Section 7(b)
shall be effective as of the last day of the calendar quarter during which the
Corporation receives such holder's redemption request notice.
(c) The Redemption. On the applicable redemption date, the
Corporation, directly or through its agent, shall redeem the shares of 1994-A
Preferred Stock as to which the redemption request notice has been received by
the Corporation and shall deliver or send the Redemption Consideration (defined
in Section 8 hereof) to the registered holder of the 1994-A Preferred Stock
being redeemed. In case less than all the shares of 1994-A Preferred Stock
represented by any surrendered certificate are redeemed, a new share
certificate representing the unredeemed shares of 1994-A Preferred Stock shall
be issued to such holder without cost to such holder.
8. Redemption Consideration. The consideration delivered by the
Corporation in exchange for the shares of 1994-A Preferred Stock redeemed (the
"Redemption Consideration") shall be paid, at the Corporation's option, in
cash, shares of Common Stock, or a combination of cash and Common Stock, as
follows:
(a) for shares redeemed in cash, an amount equal to $35.00 per share
of 1994-A Preferred Stock redeemed, plus any accumulated and unpaid dividends
(whether or not declared) to and including the redemption date, such
consideration to be paid by check; and
(b) for shares redeemed in Common Stock, the Corporation shall
deliver share certificates representing: (i) the number of shares of Common
Stock having a "market value" equal to the sum of $35.00 plus the amount of any
accumulated and unpaid dividends per share (whether or not declared) on the
1994-A Preferred Stock times the number of shares of 1994-A Preferred Stock
being redeemed, or (ii) in the case of a redemption pursuant to Section 5, the
number of shares of Common Stock into which the 1994-A Preferred Stock could
have been converted on the last business day before the redemption date (if
such conversion were permissible under Section 11), but only if such number of
shares is higher than the number of shares computed pursuant to clause (i). As
used herein, "market value" shall be based on the average of the daily closing
prices of the shares of Common Stock for the ten consecutive business days
ending on the third day before the redemption date.
-4-
<PAGE> 43
9. Negotiated Repurchase. In addition to or in lieu of exercising any
redemption rights provided herein, the Corporation and any holder of the 1994-A
Preferred Stock may negotiate and agree upon terms pursuant to which the
Corporation will repurchase any or all of the shares of 1994-A Preferred Stock
held by such shareholder. Any such negotiated purchase may be consummated
without restriction or requirement as to time, amount paid by the Corporation,
pro rata repurchase by the Corporation, or any other restriction or requirement
contained herein.
10. No Sinking Fund. No sinking fund exists for the redemption of 1994-A
Preferred Stock.
11. Conversion Rights of 1994-A Preferred Stock into Common Stock.
(a) Right to Convert. At the option of the holder thereof and upon
compliance with the provisions of this Section 11 as to surrender thereof, each
share of the 1994-A Preferred Stock shall be convertible at any time into fully
paid and nonassessable Common Stock at the rate of one share of Common Stock of
the Corporation for each such share of 1994-A Preferred Stock; provided,
however, that if the Corporation has given notice for redemption of such
holder's shares of 1994-A Preferred Stock, the right of conversion as to such
shares shall terminate at the close of business on the seventh day prior to the
redemption date; and provided, further, that if default shall be made by the
Corporation in the payment of the Redemption Consideration for such shares,
then conversion rights in respect thereof, if any, shall again be in full force
and effect.
(b) Procedure. Before any holder of shares of the 1994-A Preferred
Stock shall be entitled to convert the same into Common Stock, such holder
shall surrender the certificate or certificates for such 1994-A Preferred
Stock, duly assigned to the Corporation at its principal executive office, or
at such other office or agency designated by the Corporation for such purpose,
accompanied by written notice to the Corporation of the election to convert
such shares into Common Stock, stating therein the name or names in which the
certificate or certificates of Common Stock are to be issued. In case such
notice shall specify a name or names other than that of such holder, such
notice shall be accompanied by payment of any and all transfer taxes payable
upon the issue of Common Stock in such name or names and such other
documentation reasonably requested by the Corporation.
(1) As soon as practicable after such surrender of certificate
or certificates, the Corporation shall issue and deliver to such holder, or to
his nominee or nominees, a certificate or certificates for the number of shares
of Common Stock to which he shall be entitled. Such conversion shall be deemed
to have been made as of the next business day following the Corporation's
receipt of such certificate or certificates for shares of 1994-A Preferred
Stock to be converted, accompanied by any required taxes or other
documentation, and on and after such date 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 shares of Common Stock.
-5-
<PAGE> 44
(2) No payment or adjustment shall be made on account of any
dividends accumulated and unpaid on any shares of 1994-A Preferred Stock
surrendered for conversion or on account of any dividends on the Common Stock
issuable on such conversion.
(c) Conversion Adjustments.
(1) If the Corporation shall (i) pay a dividend payable in
Common Stock, (ii) subdivide outstanding Common Stock into a larger number of
shares of Common Stock by reclassification or otherwise, or (iii) combine its
outstanding Common Stock into a smaller number of shares of Common Stock by
reclassification or otherwise, then in each such case, the holder of each share
of 1994-A Preferred Stock shall thereafter be entitled to receive upon the
conversion of such share, the number of shares of Common Stock which such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such 1994-A Preferred Stock been
converted immediately prior to the happening of such event.
(2) In the case of any capital reorganization of the
Corporation or of any reclassification of the Common Stock, or in the case of
the consolidation of the Corporation with or the merger of the Corporation with
or into any other entity or of the sale, lease or other transfer of all or
substantially all of the assets of the Corporation to any other person, the
1994-A Preferred Stock shall after such capital reorganization,
reclassification, consolidation, merger, sale, lease or other transfer be
convertible into the number of shares of stock or other securities or property
which a holder of the Common Stock issuable (at the time of such capital
reorganization, reclassification, consolidation, merger, sale, lease or other
transfer) upon conversion of the 1994-A Preferred Stock would have been
entitled upon such capital reorganization, reclassification, consolidation,
merger, sale, lease or other transfer; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interest thereafter
of the holders of the 1994-A Preferred Stock shall be appropriately adjusted so
as to be applicable, as nearly as may reasonably be, to any shares of stock or
other securities or property thereafter deliverable on the conversion of the
1994-A Preferred Stock. The subdivision or combination of Common Stock issuable
upon conversion of 1994-A Preferred Stock at any time outstanding into a
greater or lesser number of shares of Common Stock (whether with or without par
value) shall not be deemed to be a reclassification of the Common Stock of the
Corporation for the purposes of this Section 11(c)(2).
(3) No fractional shares of Common Stock shall be issued on any
conversion, but in lieu thereof the Corporation shall, at its option: (i) pay
therefor cash in an amount equal to the current market value of such fractional
interest, or (ii) make such arrangements as the Board of Directors shall
approve to enable the holder of a fractional interest to sell such interest or
buy an additional fractional interest sufficient to make one whole share of
Common Stock.
-6-
<PAGE> 45
(d) Reservation of Common Stock. The Corporation shall reserve at
all times while any 1994-A Preferred Stock remains outstanding, free from
preemptive rights, out of its treasury shares or its authorized but unissued
Common Stock, or both, solely for the purposes of effecting the conversion of
the 1994-A Preferred Stock, sufficient shares of Common Stock to provide for
the conversion of all outstanding 1994-A Preferred Stock.
(e) Valid Issuance. All shares of Common Stock which may be issued
upon conversion of the 1994-A Preferred Stock will, upon issuance by the
Corporation, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance of them, and the
Corporation shall take no action which causes a contrary result.
12. Liquidation Rights. Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, after payment or provision for
payment of the debts and other liabilities of the Corporation, the registered
holders of the 1994-A Preferred Stock then outstanding shall be entitled to
receive out of the net assets of the Corporation, before any payment or
distribution shall be made on the Common Stock, cash or other property having a
fair market value or some combination thereof in an amount equal to $35.00 per
share, plus an amount equal to all accumulated and unpaid dividends (whether or
not earned or declared) to and including the date of final distribution to the
registered holders of the 1994-A Preferred Stock, and no more, before any
distribution shall be made to the registered holders of Common Stock. If the
assets of the Corporation available for distribution to the registered holders
of 1994-A Preferred Stock shall be insufficient to pay the full amount to which
all such holders are entitled pursuant to the foregoing, then each such holder
shall be entitled to share pro rata in the amounts so available. Neither the
merger or consolidation of the Corporation, nor the sale, lease or conveyance
of all or a part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
-7-
<PAGE> 46
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant to Section 3-10-106 of the 1976 South Carolina Code, as amended,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION
2. On February 23, 1995, the corporation adopted the following Amendment(s)
of its Articles of Incorporation:
(Type or attach the complete text of each Amendment)
SEE EXHIBIT A ATTACHED HERETO
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
NOT APPLICABLE
4. Complete either a or b, whichever is applicable.
a. [ ] Amendment(s) adopted by shareholder action.
At the date of adoption of the amendment, the number of outstanding
shares of each voting group entitled to vote separately on the
Amendment, and the vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented at Shares Voted
Group Shares to be Cast the meeting For Against
- ----- ------ ---------- ----------- ---------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 47
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can
alternatively state the total number of undisputed shares cast for
the amendment by each voting group together with a statement that the
number of shares cast for the amendment by each voting group was
sufficient for approval by that voting group.
b. [X] The Amendment(s) was duly adopted by the incorporators or board
of directors without shareholder approval pursuant to Sections
33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South Carolina
Code as amended, and shareholder action was not required.
5. Unless a delayed date is specified, the effective date of these Articles
of Amendment shall be the date of acceptance for filing by the Secretary
of State (See Section 33-1-230(b)):
------------------
DATE February 24, 1995 THE LIBERTY CORPORATION
----------------- -----------------------------------
(Name of Corporation)
By: /s/ Martha G. Williams
----------------------------------
(Signature)
Martha G. Williams, Vice President,
General Counsel and Secretary
----------------------------------
(Type or Print Name and Office)
2
<PAGE> 48
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or a
conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional sheets
containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of filing
application.
<TABLE>
<CAPTION>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
Form Approved by South Carolina
Secretary of State 1/89
3
<PAGE> 49
EXHIBIT A
TO
ARTICLES OF AMENDMENT
OF
THE LIBERTY CORPORATION
ESTABLISHING
SERIES 1995-A VOTING 5%
CUMULATIVE CONVERTIBLE PREFERRED STOCK
The Restated Articles of Incorporation of The Liberty Corporation (the
"Corporation"), as previously amended, are hereby further amended to establish
a special series of preferred stock and to set forth the preferences,
limitations and relative rights of such series of preferred stock, all in
accordance with resolutions adopted by the Board of Directors on November 8,
1994 and December 20, 1994 and resolutions adopted by a Special Committee of
the Board of Directors on February 23, 1995 (acting under specific
authorization of the Board of Directors), all pursuant to the authority granted
by Article 4 of the Restated Articles of Incorporation of the Corporation,
which preferences, limitations and relative rights are as follows:
1. Designation and Number of Preferred Shares. The series of preferred
stock, no par value, established by the Board of Directors as described herein
shall consist of 600,000 shares and shall be designated "Series 1995-A Voting
5% Cumulative Convertible Preferred Stock" (hereinafter, the "1995-A Preferred
Stock").
2. Dividends. Dividends on the 1995-A Preferred Stock shall be at the
rate of 5% per annum (based on an assigned value of $35.00), shall accrue daily
(whether or not declared) on the basis of a 360-day year of twelve 30-day
months, shall be paid on or before the last day of each calendar quarter, but
only as and when declared by the Board of Directors in accordance with
applicable law (and subject to the Corporation's right to defer payment of
dividends with respect to affected shares of 1995-A Preferred Stock until the
owners complete applicable procedures for the issuance to them of stock
certificates pursuant to the merger of Love Broadcasting Company into the
Corporation's subsidiary, Cosmos Broadcasting Corporation (the "Love
Broadcasting Merger")), and shall commence to accrue and shall be cumulative
(but unpaid, accumulated dividends shall not accrue dividends or bear
interest), as follows:
(a) if issued as of the effective date of the Love Broadcasting
Merger, then from and including the effective date of the Love
Broadcasting Merger;
(b) if issued as of a date after the effective date of the Love
Broadcasting Merger but during the period commencing immediately after the
record date for a dividend on the 1995-A Preferred Shares and ending at
the close of the calendar quarter for such dividend, then from the end of
the calendar quarter for which such last dividend payment was made; and
<PAGE> 50
(c) otherwise from the beginning of the calendar quarter in which
such shares are issued.
3. Rank. No dividends or any other distributions on the common shares of
the Corporation (the "Common Stock") or any other stock of the Corporation
ranking junior to the 1995-A Preferred Stock shall be paid or declared and set
apart for payment unless all accumulated and unpaid dividends (whether or not
declared) on the 1995-A Preferred Stock have been paid or declared and set
apart for payment. The 1995-A Preferred Stock shall be on a parity with all
other series of preferred stock of the Corporation as to payment of dividends
or other distributions (including upon liquidation), whether such series are
now existing or are created in the future, unless a series of preferred stock
of the Corporation expressly provides that it is either senior or junior to the
1995-A Preferred Stock.
4. Voting Rights. The holders of shares of 1995-A Preferred Stock shall
be entitled to one vote per share on any matters submitted to a vote of the
shareholders of the Corporation and on any other matters required by applicable
law to be submitted to a vote of the holders of the 1995-A Preferred Stock.
5. Redemption--At Election of the Corporation.
(a) Generally. Subject to applicable law, the Corporation has the
right to elect to redeem any or all of the 1995-A Preferred Stock from time to
time at any time after March 28, 2000 in exchange for either cash or Common
Stock in an amount determined in accordance with Section 8 hereof and otherwise
on the terms set forth in this Section 5. If less than all of the issued and
outstanding shares of 1995-A Preferred Stock are to be redeemed, then the
shares of 1995-A Preferred Stock to be redeemed shall be selected either pro
rata, by lot, or in such other equitable manner as determined by the Board of
Directors.
(b) Notice of Redemption. The Corporation shall give written notice
of its election to redeem 1995-A Preferred Stock pursuant to this Section 5 to
each registered holder of the shares of 1995-A Preferred Stock to be redeemed.
Such notice shall set forth the total number of shares of 1995-A Preferred
Stock being redeemed from such holder and in the aggregate and the date of the
redemption selected by the Corporation. The Corporation's redemption notice
shall be mailed to each such registered holder's address specified in the share
records of the Corporation by first class mail, postage prepaid, not less than
30 days nor more than 60 days prior to the redemption date selected by the
Corporation.
(c) The Redemption. The 1995-A Preferred Stock as to which the
Corporation's redemption notice has been given shall be redeemed on the date
specified in such notice. On the redemption date: (i) the Corporation shall
deliver (or make available for delivery upon compliance with clause (ii) of
this Section 5(c)) the Redemption Consideration (defined in Section 8 hereof)
to the registered holders of shares of 1995-A Preferred Stock being redeemed,
which Redemption Consideration shall include any accumulated and unpaid
dividends (whether or not declared) to and including the redemption date; and
(ii) such holders shall deliver (or shall
2
<PAGE> 51
have delivered prior to such redemption date) to the Corporation in exchange
for such Redemption Consideration the share certificates representing the
1995-A Preferred Stock being redeemed, duly endorsed by the registered holders
in blank or with executed stock powers duly executed by the registered holders
in blank, in each case with signatures guaranteed by a financial institution or
brokerage firm having membership in good standing in a recognized guarantee
program. In case less than all the shares of 1995-A Preferred Stock represented
by any such certificates are redeemed, new share certificates representing the
unredeemed shares of 1995-A Preferred Stock shall be issued to such holders
without cost to such holders.
6. Failure to Surrender Certificates; Effect of Redemption. When the
Corporation has duly and properly given notice for redemption of 1995-A
Preferred Stock in accordance with Section 5(b) and applicable law and any
registered holder of the 1995-A Preferred Stock fails to present the
certificate(s) representing the 1995-A Preferred Stock to be redeemed or
otherwise take action required by the Corporation's redemption notice in
accordance with the Restated Articles of Incorporation and applicable law then,
as of the redemption date: (i) the 1995-A Preferred Stock held by such
registered holder shall be deemed to have been redeemed and to be no longer
outstanding; (ii) each such holder's right to receive dividends on such 1995-A
Preferred Stock shall cease to accrue; and (iii) all other rights with respect
to such 1995-A Preferred Stock shall cease and terminate, except the right of
each such holder to receive the Redemption Consideration distributable to such
holder upon such redemption, without interest.
7. Redemption Consideration. The consideration delivered by the
Corporation in exchange for the shares of 1995-A Preferred Stock redeemed (the
"Redemption Consideration") shall be paid, at the Corporation's option, in
cash, shares of Common Stock, or a combination of cash and Common Stock, as
follows:
(a) for shares redeemed in cash, an amount equal to $35.00 per share
of 1995-A Preferred Stock redeemed, plus any accumulated and unpaid dividends
(whether or not declared) to and including the redemption date, such
consideration to be paid by check; and
(b) for shares redeemed in Common Stock, the Corporation shall
deliver share certificates representing: (i) the number of shares of Common
Stock having a "market value" equal to the sum of $35.00 plus the amount of any
accumulated and unpaid dividends per share (whether or not declared) on the
1995-A Preferred Stock times the number of shares of 1995-A Preferred Stock
being redeemed, or (ii) the number of shares of Common Stock into which the
1995-A Preferred Stock could have been converted on the last business day
before the redemption date (as if such conversion were permissible under
Section 10), but only if such number of shares is higher than the number of
shares computed pursuant to clause (i). As used herein, "market value" shall be
based on the average of the daily closing prices of the shares of Common Stock
as reported by the New York Stock Exchange for the ten consecutive business
days ending on the third day before the redemption date.
8. Negotiated Repurchase. In addition to or in lieu of exercising any
redemption rights provided herein, the Corporation and any holder of the 1995-A
Preferred Stock may
3
<PAGE> 52
negotiate and agree upon terms pursuant to which the Corporation will
repurchase any or all of the shares of 1995-A Preferred Stock held by such
shareholder. Any such negotiated purchase may be consummated without
restriction or requirement as to time, amount paid by the Corporation, pro rata
repurchase by the Corporation, or any other restriction or requirement
contained herein.
9. No Sinking Fund. No sinking fund exists for the redemption of 1995-A
Preferred Stock.
10. Conversion Rights of 1995-A Preferred Stock into Common Stock.
(a) Right to Convert. At the option of the holder thereof and upon
compliance with the provisions of this Section 10 as to surrender thereof, each
share of the 1995-A Preferred Stock shall be convertible at any time into fully
paid and nonassessable Common Stock at the rate of one share of Common Stock of
the Corporation for each such share of 1995-A Preferred Stock; provided,
however, that if the Corporation has given notice for redemption of such
holder's shares of 1995-A Preferred Stock, the right of conversion as to such
shares shall terminate at the close of business on the seventh day prior to the
redemption date; and provided, further, that if default shall be made by the
Corporation in the payment of the Redemption Consideration for such shares,
then conversion rights in respect thereof, if any, shall again be in full force
and effect.
(b) Procedure. Before any holder of shares of the 1995-A Preferred
Stock shall be entitled to convert the same into Common Stock, such holder
shall surrender the certificate or certificates for such 1995-A Preferred
Stock, duly assigned to the Corporation at its principal executive office, or
at such other office or agency designated by the Corporation for such purpose,
accompanied by written notice to the Corporation of the election to convert
such shares into Common Stock, stating therein the name or names in which the
certificate or certificates of Common Stock are to be issued. In case such
notice shall specify a name or names other than that of such holder, such
notice shall be accompanied by payment of any and all transfer taxes payable
upon the issue of Common Stock in such name or names and such other
documentation reasonably requested by the Corporation.
(1) As soon as practicable after such surrender of certificate
or certificates, the Corporation shall issue and deliver to such holder, or to
his nominee or nominees, a certificate or certificates for the number of shares
of Common Stock to which he shall be entitled. Such conversion shall be deemed
to have been made as of the next business day following the Corporation's
receipt of such certificate or certificates for shares of 1995-A Preferred
Stock to be converted, accompanied by any required taxes or other
documentation, and on and after such date 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 shares of Common Stock.
4
<PAGE> 53
(2) No payment or adjustment shall be made on account of any
dividends accumulated and unpaid on any shares of 1995-A Preferred Stock
surrendered for conversion or on account of any dividends on the Common Stock
issuable on such conversion.
(c) Conversion Adjustments.
(1) If the Corporation shall (i) pay a dividend payable in
Common Stock, (ii) subdivide outstanding Common Stock into a larger number of
shares of Common Stock by reclassification or otherwise, or (iii) combine its
outstanding Common Stock into a smaller number of shares of Common Stock by
reclassification or otherwise, then in each such case, the holder of each share
of 1995-A Preferred Stock shall thereafter be entitled to receive upon the
conversion of such share, the number of shares of Common Stock which such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such 1995-A Preferred Stock been
converted immediately prior to the happening of such event.
(2) In the case of any capital reorganization of the
Corporation or of any reclassification of the Common Stock, or in the case of
the consolidation of the Corporation with or the merger of the Corporation with
or into any other entity or of the sale, lease or other transfer of all or
substantially all of the assets of the Corporation to any other person, the
1995-A Preferred Stock shall after such capital reorganization,
reclassification, consolidation, merger, sale, lease or other transfer be
convertible into the number of shares of stock or other securities or property
which a holder of the Common Stock issuable (at the time of such capital
reorganization, reclassification, consolidation, merger, sale, lease or other
transfer) upon conversion of the 1995-A Preferred Stock would have been
entitled upon such capital reorganization, reclassification, consolidation,
merger, sale, lease or other transfer; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interest thereafter
of the holders of the 1995-A Preferred Stock shall be appropriately adjusted so
as to be applicable, as nearly as may reasonably be, to any shares of stock or
other securities or property thereafter deliverable on the conversion of the
1995-A Preferred Stock. The subdivision or combination of Common Stock issuable
upon conversion of 1995-A Preferred Stock at any time outstanding into a
greater or lesser number of shares of Common Stock (whether with or without par
value) shall not be deemed to be a reclassification of the Common Stock of the
Corporation for the purposes of this Section 10(c)(2).
(3) No fractional shares of Common Stock shall be issued on any
conversion, but in lieu thereof the Corporation shall, at its option: (i) pay
therefor cash in an amount equal to the current market value of such fractional
interest, or (ii) make such arrangements as the Board of Directors shall
approve to enable the holder of a fractional interest to sell such interest or
buy an additional fractional interest sufficient to make one whole share of
Common Stock.
(d) Reservation of Common Stock. The Corporation shall reserve at
all times while any 1995-A Preferred Stock remains outstanding, free from
preemptive rights, out of its
5
<PAGE> 54
treasury shares or its authorized but unissued Common Stock, or both, solely
for the purposes of effecting the conversion of the 1995-A Preferred Stock,
sufficient shares of Common Stock to provide for the conversion of all
outstanding 1995-A Preferred Stock.
(e) Valid Issuance. All shares of Common Stock which may be issued
upon conversion of the 1995-A Preferred Stock will, upon issuance by the
Corporation, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issuance of them, and the
Corporation shall take no action which causes a contrary result.
11. Liquidation Rights. Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, after payment or provision for
payment of the debts and other liabilities of the Corporation, the registered
holders of the 1995-A Preferred Stock then outstanding shall be entitled to
receive out of the net assets of the Corporation, before any payment or
distribution shall be made on the Common Stock, cash or other property having a
fair market value or some combination thereof in an amount equal to $35.00 per
share, plus an amount equal to all accumulated and unpaid dividends (whether or
not earned or declared) to and including the date of final distribution to the
registered holders of the 1995-A Preferred Stock, and no more, before any
distribution shall be made to the registered holders of Common Stock. If the
assets of the Corporation available for distribution to the registered holders
of 1995-A Preferred Stock shall be insufficient to pay the full amount to which
all such holders are entitled pursuant to the foregoing, then each such holder
shall be entitled to share pro rata in the amounts so available. Neither the
merger or consolidation of the Corporation, nor the sale, lease or conveyance
of all or a part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
6
<PAGE> 55
STATE OF SOUTH CAROLINA
SECRETARY OF STATE
ARTICLES OF AMENDMENT
Pursuant to Section 3-10-106 of the 1976 South Carolina Code, as amended,
the undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is THE LIBERTY CORPORATION
2. On May 6, 1997, the corporation adopted the following Amendment(s) of its
Articles of Incorporation:
(Type or attach the complete text of each Amendment)
SEE EXHIBIT A ATTACHED HERETO
3. The manner, if not set forth in the amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the
Amendment shall be effected, is as follows: (if not applicable, insert
"not applicable" or "NA").
NOT APPLICABLE
4. Complete either a or b, whichever is applicable.
a. [X] Amendment(s) adopted by shareholder action.
At the date of adoption of the amendment, the number of outstanding
shares of each voting group entitled to vote separately on the
Amendment, and the vote of such shares was:
<TABLE>
<CAPTION>
Number of Number of Number of Votes Number of Undisputed*
Voting Outstanding Votes Entitled Represented at Shares Voted
Group Shares to be Cast the meeting For Against
- ----- ------ ---------- ----------- -----------------------
<S> <C> <C> <C> <C> <C>
Common &
Preferred
Stock(1) 22,108,526 22,108,526 19,831,725 19,418,857 254,389(2)
</TABLE>
(S.C. - 253 - 1/1/89)
- --------
(1)Under SCBCA ss. 33-10-104, the Preferred Stock was not entitled to vote
as a separate voting group and thus voted together with the Common Stock
pursuant to the corporation's Articles of Incorporation.
(2)Does not include 158,479 abstentions.
<PAGE> 56
*NOTE: Pursuant to Section 33-10-106(6)(i), the corporation can
alternatively state the total number of undisputed shares cast for
the amendment by each voting group together with a statement that the
number of shares cast for the amendment by each voting group was
sufficient for approval by that voting group.
b. [ ] The Amendment(s) was duly adopted by the incorporators or board
of directors without shareholder approval pursuant to
ss.33-6-102(d), 33-10-102 and 33-10-105 of the 1976 South
Carolina Code as amended, and shareholder action was not
required.
5. Unless a delayed date is specified, the effective date of these Articles
of Amendment shall be the date of acceptance for filing by the Secretary
of State (See ss.33-1-230(b)): ___________________
DATE May 7, 1997 THE LIBERTY CORPORATION
---------------------------------------
(Name of Corporation)
By: /s/ Martha G. Williams
---------------------------------------
(Signature)
Martha G. Williams, Vice President,
General Counsel and Secretary
---------------------------------------
(Type or Print Name and Office)
2
<PAGE> 57
FILING INSTRUCTIONS
1. Two copies of this form, the original and either a duplicate original or a
conformed copy, must be filed.
2. If the space in this form is insufficient, please attach additional sheets
containing a reference to the appropriate paragraph in this form.
3. Filing fees and taxes payable to the Secretary of State at time of filing
application.
<TABLE>
<S> <C>
Filing Fee $ 10.00
Filing Tax 100.00
Total $110.00
</TABLE>
Form Approved by South Carolina
Secretary of State 1/89
3
<PAGE> 58
EXHIBIT A
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
TO LIMIT THE DIRECTORS' LIABILITY TO THE EXTENT
PERMITTED BY SOUTH CAROLINA LAW
The Restated Articles of Incorporation are hereby amended to add a new
Article 10 as follows and to renumber existing Article 10 accordingly:
10. No director of the Corporation shall be personally liable to the
Corporation or its shareholders for the monetary damages for breach of his
or her fiduciary duty as a director occurring after the effective date
hereof; provided, however, the foregoing shall not eliminate or limit the
liability of a director: (a) for any breach of the director's duty of
loyalty to the Corporation or its shareholders; (b) for acts or omissions
not in good faith or which involve gross negligence, intentional
misconduct, or a knowing violation of law; (c) imposed for unlawful
distributions as set forth in Section 33-8-330 of the South Carolina
Business Corporation Act of 1988, as amended from time to time (the
"SCBCA"), or (d) for any transaction from which the director derived an
improper personal benefit. This provision shall eliminate or limit the
liability of a director only to the maximum extent permitted from time to
time by the SCBCA or any successor law or laws. If the SCBCA is amended
after approval by the shareholders of this Article 10 to further eliminate
or limit the personal liability of directors, the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the SCBCA, as so amended. Any repeal or modification of the
foregoing protection by the shareholders of the Corporation shall not
adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
<PAGE> 1
EXHIBIT 11
THE LIBERTY CORPORATION AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED EARNINGS PER SHARE COMPUTATION
-------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
PRIMARY SHARES
Common shares outstanding - end of period 20,251,865 20,092,805
Weighted average common shares outstanding 20,234,731 20,080,138
Weighted average common stock options outstanding 207,968 160,246
Preferred stock considered a common stock equivalent 599,985 599,985
----------- -----------
Total primary shares 21,042,684 20,840,369
=========== ===========
FULLY DILUTED SHARES
Weighted average common shares outstanding 20,234,731 20,080,138
Weighted average common stock options outstanding 221,065 160,290
Preferred stock considered a common stock equivalent 599,985 599,985
Assumed conversion of redeemable preferred stock not
considered a common stock equivalent 1,259,236 1,261,281
----------- -----------
Total fully diluted shares 22,315,017 22,101,694
=========== ===========
NET INCOME $15,867,000 $14,055,000
=========== ===========
PREFERRED STOCK DIVIDENDS ON REDEEMABLE PREFERRED STOCK
Dividends $ 661,000 $ 663,000
=========== ===========
Primary earnings per share (net income minus preferred
dividends divided by total primary shares) $ 0.72 $ 0.64
=========== ===========
Fully diluted earnings per share (net income divided by total
fully diluted shares) $ 0.71 $ 0.64
=========== ===========
</TABLE>
70
