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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 30, 1998
PROFFITT'S, INC.
(Exact name of registrant as specified in its charter)
Tennessee 1-13113 62-0331040
(State of incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
750 Lakeshore Parkway
Birmingham, Alabama 35211
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code
(423) 983-7000
Item 2. Acquisition or Disposition of Assets
On January 30, 1998, the registrant, Proffitt's, Inc., a
Tennessee corporation ("Proffitt's), completed a merger with Carson
Pirie Scott & Co., an Illinois corporation ("CPS") in which a
wholly owned subsidiary of Proffitt's was merged with and into CPS,
with CPS surviving the merger as a wholly owned subsidiary of
Proffitt's. In connection with the merger, each outstanding common
share $0.01 par value of CPS was converted into 1.75 shares of the
common stock, $0.10 par value, of Proffitt's.
CPS is a regional department store company which operates 52
department stores and 4 freestanding furniture stores in Illinois,
Indiana, Minnesota and Wisconsin.
Item 7. Financial Statements and Exhibits
7(a) and 7(b). Other than as set forth below, the financial
statements and pro forma financial information required by Items
7(a) and 7(b) have been previously reported (as defined in Rule
12b-2 under the Securities Exchange Act of 1934). The following
pro forma information is included herewith:
Pro Forma Condensed Combined Income Statements (Unaudited)
For the Nine Months ended November 2, 1996
Pro Forma Condensed Combined Income Statements (Unaudited)
For the Nine Months ended November 1, 1997
Pro Forma Combined Balance Sheet (Unaudited) as of
November 1, 1997
7(c). The following exhibits are furnished as required by
Item 7(c):
Exhibit
Number Description
2 Agreement and Plan of Merger dated October 29,
1997, among Proffitt's, Inc., LaSalle Merger
Corporation and Carson Pirie Scott & Co.,
(Incorporated by reference to Exhibit 2 to the
Registrant's Current Report on Form 8-K filed
October 30, 1997).
4.1 Articles of Amendment to the Amended and Restated
Charter of Proffitt's, Inc. effective January 30,
1998.
4.2 Amended and Restated Charter of Proffitt's, Inc.
(as amended effective January 30, 1998).
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PROFFITT'S, INC.
Date: February 10, 1998
By: /s/ Brian J. Martin
-------------------------
Brian J. Martin,
Executive Vice President
of Law
<TABLE>
<CAPTION>
Pro Forma Condensed Combined Income Statement (Unaudited)
For the Nine Months Ended November 2, 1996
(In Thousands, Except for per Share Data)
Pro Forma
Pro Forma Acquisi-
Merger Proffitt's/ tion
Adjust- CPS (7) Adjust- Pro Forma
Proffitt's CPS ments Pro Forma Parisian ments Total
-------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,161,794 $727,993 $1,889,787 $431,176 $2,320,963
Costs and expenses:
Cost of sales, incl-
uding buying and
distribution costs 748,707 463,771 $24,612 (2) 1,237,090 279,699 $1,649 (2) 1,518,438
Selling, general, and
administrative 282,239 186,926 33,774 (1) 478,102 112,390 (1,649)(2) 588,843
(24,837)(2)
Other operating exp-
enses: 95,059 49,021 144,080 38,109 (1,284)(8) 182,455
1,550 (9)
Store pre-opening costs 636 636 636
Merger, restructuring
and integration costs 4,940 4,940 4,940
(Gain) loss on long-
lived assets (2,597) 2,500 (6) (97) (97)
ESOP Expenses 1,724 1,724 1,724
-------- ------- -------- -------- -------- ------- --------
Operating Income 31,086 28,275 (36,049) 23,312 978 (266) 24,024
Other income (expense):
Finance charge income,
net of allocation to
purchasers of accounts
receivable 22,728 - 33,774 (1) 56,502 5,578 62,080
Interest expense (16,648) (11,207) (27,855) (11,932) (6,014)(10) (45,801)
Other income (expense),
net 516 1,540 (14,892)(5) (12,836) 1,837 (10,999)
-------- ------- -------- -------- -------- ------- --------
Income before provision
for income taxes 37,682 18,608 (17,167) 39,123 (3,539) (6,280) 29,304
Provision for income taxes 15,700 7,331 (910)(4) 22,121 (799) (1,389)(4) 19,933
-------- ------- -------- -------- -------- ------- --------
Net income 21,982 11,277 (16,257) 17,002 (2,740) (4,891) 9,371
Preferred stock dividends (796) - (796) (796)
Payment for early conversion
of preferred stock (3,032) - (3,032) (3,032)
-------- ------- -------- -------- -------- ------- --------
Net income available to
common shareholders $18,154 $11,277 $(16,257) $13,174 $(2,740) $(4,891) $5,543
======= ======= ======== ======= ======= ====== ======
Primary earnings per
common share $0.37 $0.17 $0.07
Fully diluted earnings
per common share $0.43 $0.21 $0.11
Weighted average common shares:
Primary 49,202 29,260 (3) 78,462 5,580(11) 84,042
Fully diluted 50,856 29,295 (3) 80,151 5,580(11) 85,731
(1) Reclass made to conform CPS to Proffitt's presentation of finance charge income.
(2) To conform CPS's and Parisian's direct cost method of accounting for inventory to the full cost method used
by Proffitt's and to conform CPS's and Parisian's presentation of certain expenses with that of Proffitt's.
(3) To reflect the weighted average common shares of Proffitt's that would have been held by CPS's shareholders,
based on the conversion number of 1.75 shares of Proffitt's Common Stock for each share of CPS Common Stock.
(4) To reflect the income tax impact of the proforma adjustments using an effective rate of 40%.
(5) To eliminate the gain realized by CPS on the sale of Proffitt's common stock in March 1996.
(6) To eliminate the gain realized by Proffitt's on the sale of certain Proffitt's stores to CPS in March 1996.
(7) The historical income statements of Proffitt's do not reflect the operating results of Parisian prior to
Proffitt's acquisition of Parisian on October 11, 1996. Therefore, Parisian's historical income statements for
the period from February 4, 1996 through October 10, 1996 have been included in the Pro Forma Condensed Combined
Income Statements for this period. The pro forma adjustments for the Parisian acquisition reflect the impact of
push down accounting on the historical results of Parisian.
(8) To conform Parisian's accounting method for store preopening costs of deferral and amortization over twelve
months to Proffitt's accounting method of expensing such costs as incurred.
(9) To reflect the increase in depreciation and amortization resulting from the purchase price allocation for the
Parisian acquistion.
(10) To reflect interest expense on Parisian acquisition debt of approximately $118.9 million at 7.4% for the
period ended October 10, 1996, assuming that the debt was outstanding throughout the period.
(11) To reflect the Proffitt's Common Stock and Equivalents issued to Parisian shareholders.
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Condensed Combined Income Statement (Unaudited)
For the Nine Months Ended November 1, 1997
(In Thousands, Except for per Share Data)
Pro Forma
Merger Pro Forma
Proffitt's CPS Adjustments Total
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $1,610,891 $783,639 $2,394,530
Costs and expenses:
Cost of sales, including buying
and distribution costs 1,022,741 502,490 $26,361 (2) 1,551,592
Selling, general, and administrative 388,927 194,918 37,571 (1) 594,755
(26,661)(2)
Other operating expenses: 129,754 56,294 186,048
Store pre-opening costs 3,363 - 3,363
Merger, restructuring and
integration costs 4,272 - 4,272
Loss on long-lived assets 191 - 191
Other expenses - 277 277
ESOP Expenses 9,470 - 9,470
-------- -------- -------- -------
Operating Income 52,173 29,660 (37,271) 44,562
Other income (expense):
Finance charge income, net
of allocation to purchasers
of accounts receivable 32,601 37,571 (1) 70,172
Interest expense (32,484) (12,247) (44,731)
Other income (expense), net 682 (1,415) (733)
-------- -------- -------- -------
Income before provision for
income taxes and extra-
ordinary loss 52,972 15,998 300 69,270
Provision for income taxes 25,818 6,335 120 (4) 32,273
-------- -------- -------- -------
Income before extraordinary loss 27,154 9,663 180 36,997
Extraordinary loss on extinguishment
of debt, net of tax 1,483 1,483
-------- -------- -------- -------
Net income 25,671 9,663 180 35,514
======== ======== ======== ========
Primary earnings per common share $0.44 $0.41(5)
Fully diluted earnings per common share $0.44 $0.41(6)
Weighted average common shares:
Primary 58,360 28,819 (3) 87,179
Fully diluted 62,067 28,935 (3) 91,002
(1) Reclass made to conform CPS to Proffitt's presentation of finance charge income.
(2) To conform CPS's direct cost method of accounting for inventory to the full cost method used
by Proffitt's and to conform CPS's presentation of certain expenses with that of Proffitt's.
(3) To reflect the weighted average common shares of Proffitt's that would have been held by CPS's
shareholders, based on the conversion number of 1.75 shares of Proffitt's Common Stock for each
share of CPS Common Stock.
(4) To reflect the income tax impact of the proforma adjustments using an effective rate of 40%.
(5) Income per share before extraordinary item was $.42 and the loss attributable to the
extraordinary item was $.02.
(6) Income per share before extraordinary item was $.43 and the loss attributable to the
extraordinary item was $.02.
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Combined Balance Sheet
November 1, 1997
(In Thousands)
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
Pro Forma
Merger Pro Forma
ASSETS Proffitt's CPS Adjustments Total
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $8,617 $20,920 $29,537
Net accounts receivable, less receivables
sold to third parties 58,441 250,835 309,276
Merchandise inventories 679,521 264,813 $5,500 (1) 949,834
Other current assets 25,631 12,271 37,902
Refundable income taxes - Deferred
income taxes 14,799 6,920 (2,200) (1) 19,519
------- ------- -------- -------
Total current assets 787,009 555,759 3,300 1,346,068
Property and equipment, net 544,143 199,315 (2,500) (2) 740,958
Goodwill and trade names, net 272,414 272,414
Deferred income taxes - 37,201 (37,201) (3) -
Other assets 28,287 9,293 37,580
------- ------- -------- -------
TOTAL ASSETS $1,631,853 $801,568 $(36,401) $2,397,020
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $260,967 $102,819 $363,786
Accrued expenses and other current
liabilities 117,609 95,287 212,896
Current portion of long-term debt 7,336 29,106 36,442
------- ------- -------- -------
Total current liabilities 385,912 227,212 - 613,124
Senior debt 326,960 166,196 493,156
Deferred income taxes 66,394 $(37,201) (3) 31,193
(1,000) (2)
3,000 (4)
Other long-term liabilities 51,745 50,007 101,752
Subordinated debt 111,334 111,334
------- ------- -------- -------
Total liabilities 942,345 443,415 (35,201) 1,350,559
Shareholders' equity 689,508 358,153 14,892 (5)1,046,461
3,300 (1)
(1,500) (2)
(3,000) (4)
(14,892) (5)
------- ------- -------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,631,853 $801,568 $(36,401) $2,397,020
========= ======== ======== =========
</TABLE>
(1) To conform CPS's inventory valuation to the Proffitt's method of
valuing inventory which includes certain purchasing and distribution
costs, and to adjust current deferred income taxes and shareholders'
equity accordingly.
(2) To reduce property and equipment to historical cost by eliminating
the gain recognized on the sale of certain stores to CPS by Proffitt's
in fiscal 1996. Deferred income taxes and shareholders equity are also
adjusted for the impact of eliminating the gain.
(3) To reclassify deferred income taxes.
(4) To adjust deferred income taxes as a result of the change from
separate effective tax rates to one combined effective tax rate.
(5) To reflect the elimination of the gain on sale of Proffitt's stock
recorded by CPS in the first quarter of fiscal 1996.
Exhibit 4.1
ARTICLES OF AMENDMENT TO THE CHARTER
OF PROFFITT'S, INC.
Pursuant to the provisions of Section 10.06 of the Tennessee
Business Corporation Act, the undersigned corporation adopts the
following Articles of Amendment to its Amended and Restated
Charter:
1. The name of the corporation is PROFFITT'S, INC.
2. The text of the amendments are as follows:
A. The first paragraph of Article VI of the
Charter is amended to read as follows:
The maximum number of shares of all
classes of stock which the
corporation shall have the authority
to issue is 310,000,000 shares
constituting (a) 10,000,000 shares
of Series Preferred Stock, with a
par value of $1.00 per share (herein
called the "Series Preferred
Stock"), and (b) 300,000,000 shares
of Common Stock, with par value of
$.10 per share (herein called the
"Common Stock").
B. Section 1F of Article VI of the Charter is amended
by deleting from the first sentence thereof
"1,000,000" and inserting in lieu thereof
"1,500,000".
3. The Corporation is a for-profit corporation.
4. These Articles of Amendment were duly adopted on January
30, 1998 by the Board of Directors and the shareholders of the
Corporation.
IN WITNESS WHEREOF, the Corporation has caused these
Articles of Amendment to be duly executed by Brian J. Martin, its
Executive Vice President of Law, this 30th day of January, 1998.
Dated: January 30, 1998 PROFFITT'S, INC.
By: /s/ Brian J. Martin
___________________________
Brian J. Martin, Executive Vice
President of Law
Exhibit 4.2
AMENDED AND RESTATED CHARTER
OF
PROFFITT'S, INC.
(As amended effective January 30, 1998)
ARTICLE I
Name
The name of the Corporation is PROFFITT'S, INC.
ARTICLE II
Duration
The duration of the Corporation is perpetual.
ARTICLE III
Address
The address of the principal office of the Corporation is 3455
Highway 80 West, Jackson, Mississippi 39209.
ARTICLE IV
For Profit
The corporation is for profit.
ARTICLE V
Purpose
The purpose or purposes for which the Corporation are
organized are:
(a) To purchase, rent, lease, construct or otherwise
acquire adequate facilities and to operate therein general
department stores and related services enterprises.
(b) To enter into partnerships and/or joint ventures
with individuals, partnerships and/or corporations for the
purpose of transacting and carrying out the business which the
Corporation is authorized to conduct.
(c) To borrow or raise money for any of the purposes of
the Corporation and to issue, make, and/or draw notes, drafts,
warrants, bonds, debentures and/or other negotiable or non-negotiable
instruments and to secure the payment thereof by
mortgage, pledge, conveyance, deed of trust and/or other
instrument upon any property of the Corporation.
(d) To perform such other acts and things as may be
necessary and/or incident to any of the purposes aforesaid.
(e) To engage in any other lawful business permitted
under the Tennessee General Corporation Act.
ARTICLE VI
Shares
The maximum number of shares of all classes of stock which the
Corporation shall have the authority to issue is 310,000,000 shares
consisting of (a) 10,000,000 shares of Series Preferred Stock, with
a par value of $1.00 per share (herein called the "Series Preferred
Stock"), and (b)300,000,000 shares of Common Stock, with a par
value of $.10 per share (herein called the "Common Stock").
The following is a statement of the powers, preferences and
rights, and the qualifications, limitations or restrictions
thereof, in respect to each class of stock of the Corporation.
Section 1. Series Preferred Stock.
1A. Conditions of Issuance. Series Preferred Stock may
be issued from time to time and in such amounts and for such
consideration as may be determined by the Board of Directors
of the Corporation ("Board"). The designation and relative
rights and preferences of each series, except to the extent
such designations and relative rights and preferences may be
required by Tennessee law or this Charter, shall be such as
are fixed by the Board and stated in a resolution or
resolutions adopted by the Board authorizing such series
(herein called the "Series Resolution"). A Series Resolution
authorizing any series shall fix:
(i) The designation of the series which may be by
distinguishing number, letter or title;
(ii) The number of shares of such series;
(iii) The dividend rate or rates of such shares,
the date at which dividends, if declared, shall be
payable, and whether or not such dividends are to be
cumulative, in which case such Series Resolution shall
state the date or dates from which dividends shall be
cumulative;
(iv) The amounts payable on shares of such series in
the event of voluntary or involuntary liquidation,
dissolution or winding up;
(v) The redemption rights and price or prices, if
any, for the shares of such series;
(vi) The terms and amount of any sinking fund or
analogous fund providing for the purchase or redemption
of the shares of such series, if any;
(vii) The voting rights, if any, granted to the
holders of the shares of such series in addition to those
required by Tennessee law or this Charter;
(viii) Whether the shares of such series shall be
convertible into shares of the Corporation's Common Stock
or any other class of the Corporation's capital stock,
and if convertible, the conversion price or prices, any
adjustment thereof and any other terms and conditions
upon which such conversion shall be made; and
(ix) Any other rights, preferences, restrictions or
conditions relative to the shares of such series as may
be permitted by Tennessee law or this Charter.
1B. Restrictions. In no event, so long as any Series
Preferred Stock shall remain outstanding, shall any dividend
whatsoever be declared or paid upon, nor shall any
distribution be made upon, the Common Stock, other than a
dividend or distribution payable in shares of such Common
Stock, nor (without the written consent of such number of the
holders of the outstanding Series Preferred Stock as shall
have been specified in the Series Resolution authorizing the
issuance of such outstanding Series Preferred Stock) shall any
shares of Common Stock be purchased or redeemed by the
Corporation, nor shall any monies be paid to or made available
for a sinking fund for the purchase or redemption of any
Common Stock, unless in each instance full dividends on all
outstanding shares of the Series Preferred Stock for all past
dividend periods shall have been paid and the full dividend on
all outstanding shares of the Series Preferred Stock for the
current dividend period shall have been paid or declared and
sufficient funds for the payment thereof set apart and any
arrears in the mandatory redemption of the Series Preferred
Stock shall have been made good.
1C. Priority. Series Preferred Stock, with respect to
both dividends and distribution of assets on liquidation,
dissolution or winding up, shall rank prior to the Common
Stock.
1D. Voting Rights. Holders of Series Preferred Stock
shall have no right to vote for the election of directors of
the Corporation or on any other matter unless a vote of such
class is required by Tennessee law, this Charter or a Series
Resolution.
1E. Filing of Amendments. The Board shall adopt
amendments to this Charter fixing, with respect to each series
of Series Preferred Stock, the matters described in Paragraph
1A of this Section 1.
1F. Series C Junior Preferred Stock. A series of
authorized preferred stock is hereby established having a par
value of $1.00 per share, which series shall be designated as
"Series C Junior Preferred Stock" (the "Series C Junior
Preferred Stock"), shall consist of 1,500,000 shares and shall
have the following voting powers, preferences and relative,
participating, optional and other special rights, and the
qualifications, limitations and restrictions thereof as
follows:
(i) Dividends and Distributions.
(a) Subject to the rights of the holders of
any shares of any series of Preferred Stock (or any
similar stock) ranking prior and superior to the Series
C Junior Preferred Stock with respect to dividends, the
holders of shares of Series C Junior Preferred Stock, in
preference to the holders of Common Stock of the
Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the
Board out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each
such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series C Junior
Preferred Stock in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification
or otherwise), declared on 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 C Junior Preferred Stock. In the
event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) 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
C Junior 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 C Junior Preferred Stock as
provided in paragraph (a) of this Section immediately
after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event 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, a dividend of $1.00 per share on the Series C
Junior Preferred stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series C Junior
Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in
which case, dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of
holders of shares of Series C Junior Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series C Junior 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
may fix a record date for the determination of holders of
shares of Series C Junior Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than sixty
(60) days prior to the date fixed for the payment
thereof.
(ii) Voting Rights. The holders of shares of Series
C Junior Preferred Stock shall have the following voting
rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Series C Junior
Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) 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 C Junior 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.
(b) Except as otherwise provided herein, in
any other Articles of Amendment creating a series of
Preferred Stock or any similar stock, or Bylaw, the
holders of shares of Series C Junior Preferred Stock and
the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting
rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as
otherwise provided by law, holders of Series C Junior
Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
(iii) Certain Restrictions.
(a) Whenever quarterly dividends or other
dividends or distributions payable on the Series C Junior
Preferred Stock as provided in Section 1 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of
Series C Junior Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(1) declare or pay dividends, 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 C Junior
Preferred Stock;
(2) declare or pay dividends, 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 C Junior Preferred Stock, except dividends
paid ratably on the Series C Junior Preferred Stock
and all such 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;
(3) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Junior
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 any stock of the Corporation ranking
junior (as to dividends and upon dissolution,
liquidation and winding up) to the Series C Junior
Preferred Stock; or
(4) redeem or purchase or otherwise acquire
for consideration any shares of Series C Junior
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 C Junior Preferred Stock, except in
accordance with a purchase offer made in writing or
by publication (as determined by the Board) to all
holders of such shares upon such terms as the
Board, 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 consideration any shares of stock of the
Company unless the Corporation could, under paragraph (a)
of this Section 1F(iii), purchase or otherwise acquire
such shares at such time and in such manner.
(iv) Reacquired Shares. Any shares of Series C
Junior Preferred Stock purchased or otherwise acquired by
the Company in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may
be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance
set forth herein, in the Charter, or in any other
Articles of Amendment creating a series of Preferred
Stock or any similar stock or otherwise required by law.
(v) 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 C Junior Preferred Stock unless, prior
thereto, the holders of shares of Series C Junior
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 C Junior 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 shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding
up) with the Series C Junior Preferred Stock except
distributions made ratably on the Series C Junior
Preferred Stock and all such 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. In the event the Corporation shall, at any
time, declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of
Common Stock) 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 C Junior
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.
(vi) Consolidation, Merger, etc. In case 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 and/or any other property, then
in any such case each share of Series C Junior Preferred
Stock shall at the same time be similarly exchanged 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
and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) 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 C Junior 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.
(vii) No Redemption. The shares of Series C
Junior Preferred Stock shall not be redeemable.
(viii) Rank. The Series C Junior Preferred Stock
shall rank, with respect to the payment of dividends and
the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
(ix) Amendment. The Charter of the Corporation
shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights
of the Series C Junior Preferred Stock so as to affect
them adversely without the affirmative vote of the
holders of at least a majority of the outstanding shares
of Series C Junior Preferred Stock, voting together as a
single class.
Section 2. Common Stock. All shares of Common Stock shall
be identical and shall entitle the holders thereof to the same
rights and privileges.
2A. Dividends. When and as dividends are declared upon
the Common Stock, whether payable in cash, in property or in
shares of stock of the Corporation, the holders of the Common
Stock shall be entitled to share equally, share per share, in
such dividends.
2B. Voting Rights. Except as otherwise provided by law
or this Charter, the holders of Common Stock shall have equal
voting rights on the basis of one vote per share.
2C. Issuance. Shares of Common Stock may be issued from
time to time as the Board shall determine and on such terms
and for such consideration as may be fixed by the Board.
Section 3. Preemptive Rights. No holder of shares of the
Corporation of any class now or hereafter authorized shall, as such
holder, have any preferential or preemptive right to subscribe for,
purchase or receive any shares of the Corporation of any class, now
or hereafter authorizing, or any options or warrants for such
shares, or any rights to subscribe to or purchase such shares or
any securities convertible into or exchangeable for such shares,
which may at any time be issued, sold or offered for sale by the
Corporation. The Board shall have the right to issue the
authorized and treasury shares of the Corporation at such time and
upon such terms and conditions and for such consideration as the
Board shall determine.
ARTICLE VII
Commencement of Business
The Corporation will not commence business until consideration
of an amount not less than $1,000.00 has been received for the
issuance of shares.
ARTICLE VIII
Shareholders
Any action required or permitted to be taken by the
shareholders of the Corporation must be effected at a duly called
annual or special meeting of such holders and may not be effected
by any consent in writing by such holders. Notwithstanding
anything in this Charter to the contrary, the affirmative vote of
the holders of at least 80% of the voting power of all shares of
the Corporation entitled to vote generally in the election of
Directors, voting together as a class, shall be required to alter,
amend, adopt any provisions inconsistent with or repeal this
Article VIII.
ARTICLE IX
Directors
The number of directors and the removal of directors shall be
determined as follows:
Section 1. Number of Directors. The affairs of this
Corporation shall be managed by a Board of up to fifteen (15)
directors.
Effective as of the annual meeting of shareholders in 1997,
the Board shall be divided into three classes, designated as Class
I, Class II, and Class III, as nearly equal in number as possible.
The initial term of office of Class I shall expire at the annual
meeting of shareholders in 1998, that of Class II shall expire at
the annual meeting in 1999, and that of Class III shall expire at
the annual meeting in 2000, and in all cases as to each director
until his or her successor shall be elected and shall qualify, or
until his or her earlier resignation, removal from office, death,
or incapacity.
Subject to the foregoing, at each annual meeting of
shareholders the successors to the class of directors whose term
shall then expire shall be elected to hold office for a term
expiring at the third succeeding annual meeting and until their
successors shall be elected and qualified. Vacancies on the Board,
for any reason, and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a
vote of the majority of the directors then in office, although less
than a quorum, or by a sole remaining director.
If the number of directors is changed, the Board shall
determine the class or classes to which the increased or decreased
number of directors shall be apportioned; provided that the
directors in each class shall be as nearly equal in number as
possible. No decrease in the number of directors shall have the
effect of shortening the term of any incumbent director.
Notwithstanding any other provisions of this Charter or the
Bylaws of the Corporation (and notwithstanding that a lesser
percentage may be specified by law, this Charter, or the Bylaws of
the Corporation), the affirmative vote of the holders of 80% or
more of the voting power of the shares of the then outstanding
Voting Stock, voting together as a single class, shall be required
to amend or repeal, or adopt any provisions inconsistent with, this
Article IX, Section 1 of this Charter.
Section 2. Removal of Directors. Directors may be removed
by shareholders only for cause as defined in the Tennessee General
Corporation Act.
ARTICLE X
Shareholder Approval
The holders of shares shall have the right to approve certain
business combinations as follows:
Section 1. Vote Required for Certain Business
Combinations.
1A. Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or this
Charter, and except as otherwise expressly provided in Section
2 of this Article X:
(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; or
(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 $1,000,000 or more; or
(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 $1,000,000 or more; or
(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) which has the
effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any
class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Shareholder or any
Affiliate of any Interested Shareholder; or
(vi) any agreement, contract or other arrangement
providing directly or indirectly for the foregoing;
shall require the affirmative vote of the holders of at least
80% of the voting power of the then outstanding shares of
capital stock of the Corporation entitled to vote generally in
the election of directors (the "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.
1B. Definition of "Business Combination". The term
"Business Combination" as used in this Article X shall mean
any transaction which is referred to in any one or more of
clauses (i) through (vi) of paragraph 1A of this Section 1.
Section 2. When Higher Vote is Not Required. The
provisions of this Article X shall not be applicable to any
particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required by law and
any other provision of this Charter, if all of the conditions
specified in either of the following paragraphs 2A or 2B are met:
2A. Approval by Continuing Directors. The Business
Combination shall have been approved by a majority of the
Continuing Directors (as hereinafter defined).
2B. Price and Procedure Requirements. All of the
following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to
be received per share by holders of Common Stock in such
Business Combination shall be at least equal to the
highest of the following:
(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 shares of
Common Stock 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 on the Announcement Date or on the date on
which the Interested Shareholder became an
Interested Shareholder (such latter date is
referred to in this Article X as the "Determination
Date"), whichever is higher; or
(c) (if applicable) the price per share equal
to the Fair Market Value per share of Common Stock
determined pursuant to paragraph 2B(i)(b) above,
multiplied by the ratio of (1) the highest per
share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid
by the Interested Shareholder for any shares of
Common Stock acquired by it within the two-year
period immediately prior to the Announcement Date
to (2) the Fair Market Value per share of Common
Stock on the first day in such two-year period upon
which the Interested Shareholder acquired any
shares of Common Stock.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the
Business Combination of consideration other than cash to
be received per share by holders of shares of any other
class of outstanding Voting Stock shall be at least equal
to the highest of the following (it being intended that
the requirement of this paragraph 2B(ii) shall be
required to be met with respect to every class of
outstanding Voting Stock, whether or not the Interested
Shareholder has previously acquired any shares of a
particular class of Voting Stock).
(iii) The consideration to be received by
holders of a particular class of outstanding Voting Stock
(including Common Stock) shall be in cash or in the same
form as the Interested Shareholder had previously paid
for shares of such class of Voting Stock. If the
Interested Shareholder had previously paid for shares of
such class of Voting Stock with varying forms of
consideration, the form of consideration for such class
of Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of
Voting Stock previously acquired by it.
(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
therefore any full quarterly dividends (whether or not
cumulative) on any outstanding Preferred Stock; (b) there
shall have been (1) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary
to reflect any subdivision of the Common Stock), except
as approved by a majority of the Continuing Directors,
and (2) an 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 to increase such annual rate is
approved by a majority of the Continuing Directors; and
(c) such Interested Shareholder shall have not become the
beneficial owner of any additional shares of Voting Stock
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 Shareholder, such Interested Shareholder shall
not have received the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages
provided by the Corporation, 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 public shareholders of the Corporation
at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant
to such Act or subsequent provisions).
Section 3. Certain Definitions. For the purposes of
this Article X:
3A. A "person" shall mean any individual, firm,
corporation or other entity.
3B. An "Interested Shareholder" shall mean any person
(other than the Corporation, any Subsidiary, RBM Acquisition
Company, the sole shareholder of the Corporation, or any
Shareholder of RBM Acquisition Company) who or which:
(i) is the beneficial owner, directly or
indirectly, of more than 10% of the voting power of the
outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the
date in question was the beneficial owner, directly or
indirectly, of 10% or more of the voting power of the
then outstanding Voting Stock; or
(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 any interested
Shareholder, if such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph 3B of this
Section 3, the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned through
application of paragraph 3C of this Section 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.
3C. 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; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of
Voting Stock.
3D. "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 June 1, 1985.
3E. "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 an Interested Shareholder
set forth in paragraph 3B of this Section 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.
3F. "Continuing Director" means any member of the Board
who is unaffiliated with the Interested Shareholder and was a
member of the Board prior to the time that the Interested
Shareholder became an Interested Shareholder, and any
successor of a Continuing Director who is unaffiliated with
the Interested Shareholder and is recommended to succeed a
Continuing Director by a majority of Continuing Directors who
are then members of the Board.
3G. "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 of a share of such
stock on the Composite Tape for New York Stock Exchange-Listed
Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, on the principal United States
securities exchange registered under the Securities Exchange
Act of 1934 on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the
30-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations
System or any 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 Board 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 by the Board in good faith.
3H. In the event of any Business Combination in which
the Corporation survives, the phrase "consideration other than
cash to be received" as used in subparagraphs 2B(i) and (ii)
of Section 2 of this Article X shall include the share of
Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such
shares.
Section 4. Power of Majority of Continuing Directors. A
majority of the Continuing Directors of the Corporation shall have
the power and duty to determine for the purposes of this Article X,
on the basis of information known to them after reasonable inquiry,
(1) whether a person is an Interested Shareholder, (2) the number
of shares of Voting Stock beneficially owned by any person, (3)
whether a person is an Affiliate or Associate of another, (4)
whether a class of Voting Stock is Institutional Voting Stock and
(5) whether the assets which are the subject of any Business
Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair
Market Value of $1,000,000 or more.
Section 5. No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this Article X shall
be construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
Section 6. Amendment, Repeal, Etc. Notwithstanding any
other provisions of this Charter or the Bylaws of the Corporation
(and notwithstanding the fact that a lesser percentage may be
specified by law, this Charter or the Bylaws of the Corporation),
the affirmative vote of the holders of 80% or more of the voting
power of the shares of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal,
or adopt any provisions inconsistent with, Article X of this
Charter.
ARTICLE XI
Repurchase of Shares
The holders of shares shall have the right to approve the
repurchase of the Corporation's shares by the Corporation from
certain Interested Shareholders as follows:
Section 1. Vote of Shareholders Required for Certain
Repurchases of Shares. The affirmative vote or consent of the
holders or not less than a majority of the non-interested
outstanding shares (as hereinafter defined) of stock of the
Corporation entitled to vote in elections of directors (the "Voting
Stock"), voting for the purposes of this Article XI as one class,
shall be required to approve any direct or indirect purchase by the
Corporation of any shares of stock at a purchase price known by the
Corporation to be above the Fair Market Value (as hereinafter
defined and as determined on the date on which any such purchase by
the Corporation occurs or is to occur) of such stock from a person
who is known by the Corporation to be an Interested Shareholder (as
hereinafter defined), unless such purchase is made by the
Corporation pursuant to:
(a) a tender offer or exchange offer by the Corporation
for some or all of the outstanding shares of such stock made
on the same terms to all holders of such shares, or
(b) an open market purchase program approved by a
majority of the Continuing Directors.
Section 2. Certain Definitions. For purposes of this
Article XI:
2A. "Person", "Beneficial Owner", "Affiliate",
"Associate", and "Subsidiary" shall have the respective
meanings ascribed to such terms in Section 3 of Article X
above.
2B. "Interested Shareholder" shall have the same meaning
ascribed to such term in Section 3 of Article X above, except
that for purposes of this Article XI all references therein to
10% shall be to 5%.
2C. "Non-interested outstanding shares" are the shares
of the Corporation entitled to vote in elections of directors
(other than any shares beneficially owned by a person who is
an Interested Shareholder) which are issued and outstanding on
the record date for the determination of shareholders entitled
to notice of, and to vote at, any meeting of shareholders.
2D. "Fair Market Value" shall mean the last sale price,
on the last trading day immediately preceding the date upon
which the purchase of a share of the Corporation's stock by
the Corporation occurs or is to occur, as such last sale price
may be reported by the National Association of Securities
Dealers, Inc. Automated Quotations National Market System or
any system then in use, or if such stock is listed on a
National Securities Exchange, the highest closing sale price
on the day in question, of a share of such stock on such
exchange, or if no such quotations are available, the fair
market value on the day in question of a share of such stock
as determined by the Board in good faith.
Section 3. No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this Article XI
shall be construed to relieve any Interested Shareholder from any
fiduciary obligation imposed by law.
Section 4. Determinations by the Board. The Board shall
have the power and duty to determine, for purposes of this Article
XI, on the basis of information known to such Board after
reasonable inquiry:
(a) the number of shares of stock of the Corporation
beneficially owned by any person;
(b) whether a person is an Interested Shareholder;
(c) the number of non-interested outstanding shares on
the record date for any shareholders' meeting;
(d) whether a person is an Affiliate or Associate of
another;
(e) whether Section 1 of this Article XI is or has
become applicable with respect to a proposed purchase of
shares by the Corporation; and
(f) if so, the Fair Market Value of such shares and
whether the purchase price thereof is above such Fair Market
Value.
Any such determination made in good faith shall be conclusive
and binding for all purposes of this Article XI. For the purposes
of determining whether a person is an Interested Shareholder and
determining the number of non-interested outstanding shares, the
number of shares of stock of the Corporation deemed to be
outstanding and entitled to vote in elections of Directors shall
include shares deemed beneficially owned by such Interested
Shareholder through application of clauses (i), (ii) or (iii) of
paragraph 3B of Section 3 of Article X above but shall not include
any other shares which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
Section 5. Amendment, Repeal, Etc. The provisions of this
Article XI may not be amended, modified or repealed unless
authorized and approved by the affirmative vote of the holders of
not less than a majority of the non-interested outstanding shares
of stock of the Corporation entitled to vote in elections of
directors, voting as one class.
ARTICLE XII
Indemnification
The Corporation shall have the authority and right to
indemnify and hold harmless its officers, directors, employees, and
agents from and against any claim, liability, loss, or expense
(including attorney's fees) with respect to which such
indemnification is permitted under the applicable provisions of the
Tennessee General Corporation Act, the Bylaws of the Corporation,
or any duly adopted resolution of the Board or shareholders;
provided, however, that absent any limitation or modification set
forth in the Bylaws or any resolution, this Article XII shall
require the Corporation to indemnify and hold harmless its
officers, directors, employees and agents to the fullest extent
permitted under the applicable provisions of the Tennessee General
Corporation Act. Such right of indemnification shall not be deemed
exclusive of any other rights to which such director, officer or
employee may be entitled apart from this provision.
ARTICLE XIII
Bylaws
The Board shall have power to make, alter, amend and repeal
the Bylaws (except so far as the Bylaws adopted by the shareholders
shall otherwise provide). Any Bylaws made by the directors under
the powers conferred hereby may be altered, amended or repealed by
the Board or by the shareholders. Notwithstanding the foregoing
and anything contained in this Charter to the contrary, Article II
of the Bylaws relating to action taken at annual and special
meetings of shareholders, cannot be altered, amended or repealed
and no provision inconsistent therewith shall be adopted without
the affirmative vote of the holders of at least 80% of the voting
power of all shares of the Corporation entitled to vote generally
in the election of directors, voting together as a single class.
Notwithstanding anything contained in this Charter to the contrary,
the affirmative vote of the holders of at least 80% of the voting
power of all shares of the Corporation entitled to vote generally
in the election of directors, voting together as a single class,
shall be required to alter, amend, adopt any provision inconsistent
with or repeal this Article XIII.
ARTICLE XIV
Special Meeting of Shareholders
No special meeting of shareholders shall be held upon the
demand of shareholders of the Corporation unless the holders of at
least twenty-five percent (25%) of all the votes entitled to be
cast on each issue proposed to be considered at the special meeting
shall have signed, dated, and delivered to the Corporation's
Secretary one or more written demands for the meeting describing
the purpose of purposes for which it is to be held.
