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§3.416 To amend the Articles of Incorporation of a South Carolina corporation to eliminate the concept of par value with respect to the corporation's shares and to eliminate the related concepts of earned surplus and capital surplus (with a copy of the Amendment) ITEM 2. Amendment of the Articles of Incorporation to Eliminate Par ValueThe Board of Directors has recommended amendment of the Articles of Incorporation to eliminate the concept of par value with respect to the Company's shares and to eliminate the related concepts of earned surplus and capital surplus. The presently authorized capital stock of the Company is 50,000.000 shares of Common Stock having a par value of SI per share and 10.000.000 shares of Preferred Stock having a par value of $1 per share. The amendments with respect to the elimination of par value will serve to conform the Company's Articles of Incorporation to current South Carolina law and to clarify situations under which the Company pays dividends or other distributions to shareholders. In 1988 the Company became subject to the newly enacted South Carolina Business Corporations Act of 1988 (the which revised substantially all of the South Carolina law governing general business corporations. The prior ]a\v incorporated the concepts of par value. stated capital, capital surplus and earned surplus and utilized such concepts to determine a corporation's ability to pay dividends, redeem its stock or make other distributions to shareholders. For example, under prior law a corporation could not pay dividends out of stated capital, which represented an amount equal to the aggregate par value of common stock previously issued. The Act recognized that such concepts were complex and confusing and failed to serve the original purpose of protecting creditors. The Act eliminated these concepts entirely and substituted a simpler. more flexible, two-step test for judging distributions and redemptions. Under the Act. a corporation may make a dividend or other distribution to shareholders if afterward the corporation will be able to pay its debts as they become due in the ordinary course. and if the corporation's total assets will be ,greater than its total liabilities. The proposed amendment conforms the Company's Articles of Incorporation to these provisions of the Act. The Company does not anticipate that the amendments will affect the frequency or amount of dividends paid by the Company. The complete text of the proposed amendment is set forth as Exhibit A to this Proxy Statement. Approval of the amendment to the Articles of Incorporation requires the affirmative vote by holders of two- thirds of the outstanding shares of the Common Stock. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION. EXHIBIT A AMENDMENT TO THE ARTICLES OF INCORPORATION Article 4. (a) of the Articles of Incorporation of The Liberty Corporation. 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: Authorized Number Class of Shares of Each Class Common Stock 50,000,000 Preferred Stock 10,000,000 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. The Liberty Corporation 3/26/92