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EXHIBIT 3.1
MERITAGE HOSPITALITY GROUP INC.
RESTATED ARTICLES OF INCORPORATION
ARTICLE I
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The name of the corporation is Meritage Hospitality Group Inc.
ARTICLE II
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The purpose or purposes for which the corporation is organized is to engage in
any activity within the purposes for which corporations may be organized under
the Business Corporation Act of Michigan.
ARTICLE III
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The total authorized capital stock is:
Common Shares: 30,000,000 Par Value Per Share $0.01
Preferred Shares: 5,000,000 Par Value Per Share $0.01
Authority is hereby expressly reserved and granted to the Board of Directors of
this Corporation to determine in the resolution or resolutions providing for the
issuance of Common Stock and/or Preferred Stock the voting powers, designations,
preferences and relative participating, operational or other special rights,
qualifications, limitations or restrictions thereof which shall be incident to
the ownership of shares of such Common Stock and Preferred Stock.
The Corporation has a series of Preferred Stock, designated as Series A
Convertible Preferred Stock, consisting of 200,000 shares, par value $.01, the
qualifications, limitations, restrictions and terms of which are as follows:
(1) Each of such Shares shall have an annual dividend rate of $.90
per Share and no more. The right to payment of dividends shall be
cumulative. Said annual dividend shall be payable in equal quarterly
installments upon the 1st day of each January, April, July and October
in each year to holders of record as of the 15th day of the preceding
month commencing January 1, 1997, before any sum shall be set apart or
applied to the redemption or purchase of, or any dividends (other than
dividends of Common Shares) shall be declared or paid upon or set apart
for, Common Shares. The first of such quarterly dividend payments shall
be prorated to reflect the number of days in the quarter during which
the particular Shares were outstanding.
(2) Upon any dissolution, liquidation or winding up of the Corporation,
the holders of each of said Shares, shall be entitled to receive,
before any payment to holders of Common Shares, all accrued but unpaid
dividends, plus a liquidation value of $10.00 per share and no more.
The consolidation or merger of the Corporation, at any time, with
another corporation, or a sale of substantially all of the assets of
the Corporation, shall
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not be construed as a dissolution, liquidation or winding up of the
Corporation within the meaning hereof.
(3) The Series A Convertible Preferred Shares shall be convertible into
Common Shares of the Corporation at a conversion price of $7.00 for
each Common Share (taking such Preferred Shares at the liquidation
value of $10.00 per share) upon the following terms and conditions:
(3.1) In case the Common Shares issuable upon conversion of the
Series A Convertible Preferred Shares at any time outstanding
shall be subdivided into a greater or combined into a lesser
number of Common Shares (whether with or without par value), and
whether by stock split or stock dividend, the conversion price
shall be decreased in the case of a subdivision or increased in
the case of a combination to an amount which shall bear the same
relation to the conversion price in effect immediately prior to
such subdivision or combination, and shall bear the total number
of Common Shares outstanding immediately after such subdivision or
combination.
(3.2) No adjustments shall be made for dividends accrued on any
Shares that shall be issuable upon the conversion of such Shares.
(3.3) In case of a merger or consolidation of the Corporation with
or into another corporation, or the reclassification of its Common
Shares (other than by way of split-up or contraction), the holders
of Series A Convertible Preferred Shares shall thereafter be
entitled to receive upon conversion the kind and amount of shares
of stock and securities and property which they would have
received had they converted such Series A Convertible Preferred
Shares into Common Shares of the Corporation as of the record date
for determination of common shareholders entitled to participate
in such merger, consolidation, or reclassification.
(3.4) The holder of any shares of Series A Convertible Preferred
Shares may convert such Shares by surrendering the certificate or
certificates to any transfer agent of the Corporation or to the
Secretary of the Corporation duly endorsed in blank transfer and
accompanied by written notice of election to convert such Shares,
or portion thereof, executed on the form set forth on such
certificates or on such other form as may be provided from time to
time by the Corporation. No fractional Common Shares shall be
issued upon the conversion of any Series A Convertible Preferred
Shares but, in lieu thereof, the Corporation shall pay an amount
in cash equal to the current market value of such fractional
interest computed on the basis of the value of the Common Shares
at the time the preferred shares are surrendered for conversion as
determined in such reasonable manner as the Corporation may adopt.
In case of the voluntary dissolution, liquidation or winding up of
the Corporation, all conversion rights of the holders of Series A
Convertible Preferred Shares shall terminate on a date fixed by
the Board of Directors, but not more than Thirty (30) days prior
to the record date for determining the holders of the Common
Shares entitled to receive any distribution upon such dissolution,
liquidation and winding up.
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(3.5) The right of the holder to convert the Series A Convertible
Preferred Shares shall commence upon issuance of such Shares.
(3.6) The Corporation may cause the Series A Convertible Preferred
Shares to be converted at its option at any time if the average of
the closing sale prices for the Corporation"s Common Shares is at
least 120 percent of the then effective conversion price, as
described above, for at least 20 trading days within the period of
30 consecutive trading days ending no earlier than 5 trading days
prior to the date of the notice of conversion.
(4) Holders of the Series A Convertible Preferred Shares shall have no
voting rights except as provided by law and except that if at any time
the Corporation fails to make SIX consecutive quarterly dividend
payments thereon, the number of directors constituting its Board of
Directors will be increased by two and the holders of the Shares,
voting as a class with each Share having one vote, will be entitled to
elect two directors to the Board as long as any arrearages in dividend
payments remain outstanding. Upon payment by the Corporation of all
such dividend arrearages, the two directors elected pursuant to this
provision will cease to be directors and the holders of Shares will
have no further right to elect directors on account of such arrearages.
(5) The Corporation shall not, except upon the affirmation vote of the
holders of two-thirds of the Series A Convertible Preferred Shares
outstanding at the time, amend these articles of incorporation in any
manner that would result in the Series A Convertible Preferred Shares
being subordinate in terms of preference as to payments of dividends or
payments on liquidation to any other Preferred Shares of the
Corporation.
ARTICLE IV
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The address and mailing address of the registered office is:
40 Pearl Street, N.W., Suite 900
Grand Rapids, Michigan 49503
The name of the current resident agent is: James R. Saalfeld
ARTICLE V
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Reserved.
ARTICLE VI
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When a compromise or arrangement or a plan of reorganization of this Corporation
is proposed between this Corporation and its creditors or any class of them or
between this Corporation and its shareholders or any class of them, a court of
equity jurisdiction within the state, on application of this Corporation or of a
creditor or shareholder thereof, or on application of a receiver appointed for
the Corporation, may order a meeting of the creditors or class of creditors or
of the shareholders or class of shareholders to be affected by the proposed
compromise or arrangement or reorganization, to be summoned in such manner as
the court directs. If a majority in number representing 3/4 in value of the
creditors or class of creditors, or of the shareholders or class of shareholders
to be affected by the proposed compromise or arrangement or a
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reorganization, agree to a compromise or arrangement or a reorganization of this
Corporation as a consequence of the compromise or arrangement, the compromise or
arrangement and the reorganization, if sanctioned by the court to which the
application has been made, shall be binding on all the creditors or class of
creditors, or on all the shareholders or class of shareholders and also on this
Corporation.
ARTICLE VII
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Repealed.
ARTICLE VIII
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The Corporation shall be, and is hereby declared to be, subject to the
provisions of Chapter 7A of the Business Corporation Act of the State of
Michigan, as enacted through the adoption of Act No. 115 of the Public Acts of
the State of Michigan of 1984. The requirements therein provided and made
applicable with respect to the Corporation shall be in addition to all other
requirements of law and other provision of the Articles of Incorporation, or any
thereto.
ARTICLE IX
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No director of the Corporation shall be personally liable to the Corporation of
its shareholders for money damages for any action taken, or any failure to take
any action, as a director, except liability for any of the following: (i) the
amount of financial benefit received by the director to which the director is
not entitled; (ii) intentional infliction of harm on the Corporation or its
shareholders; (iii) a violation of Section 551 of the Michigan Business
Corporation Act; or (iv) an intentional criminal act. If the Michigan Business
Corporation Act is hereafter amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Corporation, in addition to the limitation on personal liability contained
herein, shall be eliminated or limited to the fullest extent permitted by the
Michigan Business Corporation Act as so amended. No amendment or repeal of this
Article IX shall apply to, or have any effect on, the liability or alleged
liability of any director of the Corporation for, or with respect to, any acts
or omissions of such director prior to the effective date of any such amendment
or repeal.
ARTICLE X
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The shareholders of the Corporation may remove members of the Board of Directors
only for cause.
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