The purpose of the Corporation was to print and sell business forms and it has engaged in that business from that time continuously through the events related hereafter.
4. The incorporators elected the plaintiffs and Robert L. Fireoved, a nephew of Fireoved, as directors of the Corporation at the Corporation's first meeting on November 26, 1948, and these directors subsequently elected Fireoved President and Treasurer, and Marie P. Fireoved Secretary.
5. Under date of December 31, 1948, the Corporation issued the following certificates to Fireoved: certificate number 1 for 100 shares of common stock in return for $100 in cash; certificate number P-1 for 5 shares of preferred stock in return for $500 in cash; and certificate number P-2 for 60 shares of preferred stock in payment for automotive equipment, furniture and fixtures having a value of $6,000.
6. For some time before 1954, Karl G. Edelmayer and Kenneth W. Craver had been engaged in the business of printing and selling business forms as a partnership doing business under the name "Girard Business Forms Company" (the "Partnership").
7. Some time during 1954, Robert L. Fireoved indicated to Fireoved that he desired to leave the employ of the Corporation and to move to another state, as a result of which the Corporation faced the need for additional management personnel. Fireoved, Edelmayer and Craver thereafter discussed the possibility of combining their businesses, since the Partnership could provide the additional manpower which the Corporation would need, and the Partnership required additional working capital which the Corporation had and could provide. At this time, the Corporation had net tangible assets of approximately $60,000 and the Partnership had net tangible assets of approximately $30,000. Edelmayer and Craver were willing to combine the businesses but insisted that each of the individuals should have the same measure of control of the resulting business. They were unable, however, to contribute sufficient capital in order to match Fireoved's equity in the Corporation.
8. By sometime in December of 1964, Fireoved, Edelmayer and Craver had reached an oral understanding as to the basis upon which the two businesses would be combined and the respective interests of the individuals would be reflected. Pursuant to that understanding, the following action was taken:
A. At two meetings of the directors of the Corporation duly held on December 23, 1954, amendments to the Articles of Incorporation were approved to change the name of the Corporation to "Girard Business Forms Company" and to increase the authorized preferred shares to 1,000 and the authorized common shares to 300 shares. Amendments to the By-Laws were approved to require unanimous action by all three directors, and to permit the amendment of the By-Laws by a vote of 76% of the shareholders, instead of a majority as theretofore, and to permit the directors to amend the By-Laws by unanimous vote.
These changes in the Articles of Incorporation and in the By-Laws were approved by the shareholders.
B. At a special meeting of the directors of the Corporation duly held on December 31, 1954, the following resolutions were adopted:
"RESOLVED, that the Corporation deliver to Eugene W. Fireoved, holder of all of the outstanding shares of Preferred Stock in the amount of Six Thousand five hundred dollars ($6,500.00), the new authorized Preferred Stock in the amount of Six thousand five hundred dollars ($6,500.00) in exchange for the Preferred Stock in the amount of Six thousand five hundred dollars ($6,500.00) now held by Eugene W. Fireoved."