Exhibit 3(i)
RESTATED CERTIFICATE OF INCORPORATION
OF
THE BEARD COMPANY
The Beard Company, an Oklahoma corporation (the
"Corporation"), hereby amends and restates its Certificate of
Incorporation. The name of the Corporation is The Beard Company.
The Corporation was originally incorporated under the name "The
New Beard Company" and the original Certificate of Incorporation
was filed with the Secretary of State of Oklahoma on
September 11, 1997. This Restated Certificate of Incorporation
was adopted in accordance with the provisions of Sections 1077
and 1080 of the Oklahoma General Corporation Act (the "Act").
The text of the Certificate of Incorporation of the Corporation
is amended and restated to read in its entirety as follows:
ARTICLE ONE
The name of the Corporation is:
THE BEARD COMPANY
ARTICLE TWO
The address, including street, number, city, county and
zip code, of the registered office of the Corporation in the
State of Oklahoma is Enterprise Plaza, Suite 320, 5600 North May
Avenue, Oklahoma City, Oklahoma County, Oklahoma 73112, and the
name of the registered agent at such address is Herb Mee, Jr.
ARTICLE THREE
The nature of the business and the purpose of the
Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the Act.
ARTICLE FOUR
The duration of the Corporation is perpetual.
ARTICLE FIVE
The aggregate number of shares which the Corporation
shall have authority to issue is as follows:
Class Number of Shares Par Value
----- ---------------- ---------
Preferred Stock 5,000,000 $1.00
Common Stock 7,500,000 $.001333
The preferences, qualifications, limitations, restric-
tions and special or relative rights in respect of the shares of
each class are as follows:
1.A. PREFERRED STOCK
The board of directors is authorized, subject to limi-
tations prescribed by law and the provisions hereof, to provide
for the issuance of the shares of Preferred Stock in series, and
by filing a certificate pursuant to the applicable law of the
State of Oklahoma, to establish from time to time the number of
shares to be included in each such series, and to fix the desig-
nation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions
thereof.
The authority of the board with respect to each series
shall include, but not be limited to, determination of the
following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and if so, from which date or
dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and if so, the
terms of such voting rights;
(iv) Whether that series shall have conversion privileges,
and if so, the terms and conditions of such conversion, including
provisions for adjustment of the conversion rate in such events
as the board shall determine;
(v) Whether or not shares of that series shall be redeemable,
and if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable,
and the amount per share payable in case of redemption, which
amount may vary under different conditions and at different
redemption dates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and if so, the
terms and amount of such sinking fund;
(vii) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution and winding up
of the Corporation, and the relative rights of priority, if any,
of payment of shares of that series; and
(viii) Any other relative rights, preferences or limitations
of that series.
Dividends on outstanding shares of Preferred Stock
shall be paid or set apart for payment before any dividends shall
be paid or declared or set apart for payment on the Common Stock
with respect to the same dividend period.
If upon any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation the assets available
for distribution to holders of shares of Preferred Stock of all
series shall be insufficient to pay such holders the full prefer
ential amount to which they are entitled, then such assets shall
be distributed ratably among the shares of all series in accor-
dance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
1.B. SERIES A PREFERRED STOCK
Section 1. Definitions.
(a) As used herein, the following terms shall have the
meanings specified in the sections listed below:
Term Section
- ---- -------
Conversion Price 10
Market Price 1(b)
NNM 1(b)
Redemption Date 9
SCM 1(b)
Series A Preferred Stock 2
Stated Value 3
(b) As used herein, the following terms shall have the following
meanings:
"Common Stock" shall mean and include the shares of
Common Stock par value $0.001333 per share, of the Corporation as
constituted on the date of the original issue of the Series A
Preferred Stock and shall also include any class of shares of
capital stock of the Corporation thereafter authorized that shall
not be limited to a fixed sum or percentage in respect of the
right of the holders thereof to receive dividends or to
participate in the assets of the Corporation distributable to
shareholders upon any liquidation, dissolution, or winding up of
the Corporation; provided however, that the shares into which the
Series A Preferred Stock shall be convertible pursuant to Section
10 hereof shall mean and include the shares of Common Stock, par
value $0.001333 per share, of the Corporation as constituted on
the date of the original issue of the Series A Preferred Stock or
(i) in the case of any consolidation, merger, sale or conveyance
of the character referred to in section 8 hereof, the shares or
other securities or property deliverable in lieu thereof or (ii)
in the case of any change or reclassification of the outstanding
Common Stock issuable upon conversion of the Series A Preferred
Stock as a result of a subdivision or combination or consisting
of a change in par value, or from par value to no par value, or
from no par value to par value, such Common Stock as so changed
or reclassified.
"Market Price" of any security on any day shall mean
the average of the closing prices of such security's sales on all
securities exchanges on which such security may at the time be
listed, or on the Nasdaq National Market ("NNM"), if the securi-
ties are included therein, or, if there have been no sales on any
such exchange or the NNM on any day, the average of the highest
bid and lowest asked prices on all such exchanges or NNM at the
end of such day, or, if on any day such security is not so listed
or included in the NNM the average of the representative bid and
asked prices quoted on the Nasdaq SmallCap Market ("SCM") as of
4:00 p.m., New York time, or, if on any day such security is not
quoted on the SCM, the average of the high and low bid and asked
prices on such day in the domestic over-the-counter market as
reported by the National Quotation Bureau, Inc., or any similar
successor organization, in each such case averaged over a period
of 21 days consisting of the day as of which "Market Price" is
being determined and the 20 consecutive business days prior to
such day. If at any time such security is not listed on any
securities exchange or quoted on Nasdaq or the over-the-counter
market, the "Market Price" of such security shall be the fair
value thereof mutually determined by the Corporation and the
holders of two-thirds of the then outstanding shares of Series A
Preferred Stock.
"Redemption Price" shall mean a price per share of
Series A Preferred Stock equal to the greater of (i) the Stated
Value per share (as adjusted for any stock split, reverse stock
split, stock dividend, or similar event resulting in a change in
the Series A Preferred Stock), or (ii) the Market Price per share
of the Series A Preferred Stock (if listed on a national
exchange) or of the Common Stock into which the Series A
Preferred Stock is convertible (if the Series A Preferred Stock
is not listed on a national exchange).
Section 2. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such
series shall be 90,155.86, which number may not be increased.
Section 3. Stated Value. The stated value for each share of
Series A Preferred Stock (the "Stated Value") shall be $100 per
share.
Section 4. Rank. The Series A Preferred Stock shall rank
senior to the Corporation's Common Stock as to distributions and
liquidation to the extent set forth herein. Except as may be
permitted pursuant to Section 6(e)(i) hereof, the Corporation
shall not issue any Preferred Stock pari passu with or senior to
the Series A Preferred Stock.
Section 5. Dividends and Distributions. If the Corporation
shall at any time declare or pay a dividend or other distribution
of any kind (including, without limitation, any distribution of
cash, stock, rights, options or other securities or property,
assets or rights or warrants to subscribe for securities or
property or assets or rights or warrants to subscribe for securi-
ties of the Corporation, any of its subsidiaries or other persons
or evidences of indebtedness issued by the Corporation, any of
its subsidiaries or other persons by way of dividend, spinoff or
reclassification) in respect of its Common Stock, then, and in
each such case, the holders of shares of Series A Preferred Stock
shall be entitled to receive from the Corporation, with respect
to each share of Series A Preferred Stock held, the same dividend
or distribution received by a holder of the number of shares of
Common Stock into which such share of Series A Preferred Stock is
convertible (or would be convertible if the Series A Preferred
Stock were convertible on such date) on the record date for such
dividend or distribution as if the Series A Preferred Stock were
convertible on such date. Any such dividend or distribution
shall be declared or paid on the Series A Preferred Stock at the
same time such dividend or distribution is declared or paid on
the Common Stock.
Section 6. Voting Rights. The holders of the Series A
Preferred Stock shall have the following voting rights:
(a) In addition to any other rights provided in the
Corporation's Bylaws or pursuant to applicable law, the holders
of the Series A Preferred Stock shall be entitled to vote
together with the holders of the Common Stock as a single class
on all matters submitted to a vote of the holders of the Common
Stock (or the taking of action by consent in lieu thereof),
except for the matters set forth below in this Section 6 on which
the Series A Preferred Stock shall have class voting rights as
reflected therein. In any such vote, the holder of each share of
Series A Preferred Stock shall be entitled to one vote for each
share of Common Stock into which such share of Series A Preferred
Stock is convertible (or would be convertible if the Series A
Preferred Stock were convertible on such date) pursuant to the
provisions of Section 10 hereof on the record date for
determining the holders of Common Stock entitled to receive
notice of and vote upon any such matter, or, if no record date is
set, the date as of which the holders of Common Stock entitled to
receive notice of and vote upon any such matter (or to take
action by consent in lieu thereof) is determined.
(b) The holders of Series A Preferred Stock shall have the
exclusive right at all times, notwithstanding anything to the
contrary in the Certificate of Incorporation or Bylaws or herein,
voting as a single class, to nominate and elect one director.
The rights of the holders of Series A Preferred Stock to elect
one director pursuant to the terms of this subsection (b) shall
not be adversely affected by the voting or other rights
applicable to any other security of the Corporation. When voting
as a separate class, the holders of the Series A Preferred Stock
shall be entitled to one vote per share of Common Stock into
which the Series A Preferred Stock is (or would be) convertible.
The director nominated and elected pursuant to this provision
shall receive the same compensation and benefits paid by the
Corporation to its outside directors. If the directors of the
Corporation determine that such insurance is obtainable at a
reasonable price for the amount and type of coverage desired, the
Corporation will use its best efforts to obtain directors and
officers liability insurance in such amounts and for such
coverage as the directors determine during the term that any
Preferred Shares are outstanding.
(c) If at any time the directorship to be filled by the holders
of Series A Preferred Stock pursuant hereto has been vacant for a
period of two days, the Secretary, Assistant Secretary or any
other appropriate officer of the Corporation may and shall upon
the written request of the holders of at least 10% of the Series
A Preferred Stock, call a special meeting of the holders of such
Series A Preferred Stock for the purpose of electing a director
to fill such vacancy. Such special meetings shall be held at the
earliest practicable date. If any such meeting shall not be
called by the Secretary, Assistant Secretary or any other
appropriate officer of the Corporation within two business days
after service of said written request on any such officer, the
holders of at least 10% of the Series A Preferred Stock may
designate in writing one of their number to call such meeting at
the expense of the Corporation, and such meeting may be called by
such persons so designated and shall be held at such place as
specified in said notice. Any holder of Series A Preferred Stock
so designated shall have access to the stock books of the
Corporation for the purpose of calling a meeting of the holders
of Series A Preferred Stock pursuant to these provisions.
(d) At any meeting held for the purpose of electing directors at
which the holders of Series A Preferred Stock shall have the
right to elect a director, the presence, in person or by proxy,
of the holders of a majority of the Series A Preferred Stock
shall be required to constitute a quorum of such Series A
Preferred Stock for such election. At any such meeting or
adjournment thereof, in the absence of such a quorum of holders
of Series A Preferred Stock the holders of a majority of the
voting power present in person or by proxy of the class of stock
which lacks a quorum shall have the power to adjourn the meeting.
A vacancy in the directorship to be elected by the holders of
Series A Preferred Stock may be filled only by vote or the
written consent of two thirds in interest of such Series A
Preferred Stock.
(e) The Corporation shall not without the affirmative vote of
the holders of at least two-thirds of the outstanding Series A
Preferred Stock (unless the vote of a greater percentage shall
then be required by law) given in person or by proxy at a meeting
at which the holders of the Series A Preferred Stock shall vote
separately as a class (or, to the extent permitted by the
Oklahoma General Corporation Act, action taken by written consent
in lieu thereof) effect or validate any of the following:
(i) the authorization or issuance, or any increase in the
authorized amount, of any class of equity securities (including
any security convertible into or exercisable for any equity
security) of the Corporation, having powers, designations,
preferences or relative, participating, optional or other special
rights prior to or on parity with the Series A Preferred Stock;
(ii) the amendment, alteration, or repeal of any of the
provisions of the Certificate of Incorporation so as to affect
adversely any of the powers, preferences, and rights of the
Series A Preferred Stock; or
(iii) any increase in the authorized amount of the Series A
Preferred Stock.
Section 7. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, no distribution
shall be made to the holders of Common Stock or any other stock
ranking junior (upon liquidation, dissolution or winding up) to
the Series A Preferred Stock unless, prior thereto, the holders
of the Series A Preferred Stock shall have received (i) the
Stated Value, plus (ii) any declared and unpaid dividends thereon
to the date fixed for such liquidation, dissolution or winding
up, plus (iii) an amount equal to the aggregate amount to be
distributed per share to holders of Common Stock (assuming for
such purposes conversion of Series A Preferred Stock into Common
Stock). For purposes of the distribution to the holders of the
Series A Preferred Stock pursuant to this Section 7, the holders
of Series A Preferred Stock shall share in distributions with
holders of Series A Preferred Stock ratably in proportion to
their respective holdings of Series A Preferred Stock.
(b) Neither the consolidation, merger or other business
combination of the Corporation with or into any other person or
persons, nor the sale of all or substantially all the assets of
the Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation for purposes of this Section 7.
Section 8. Consolidation, Merger, Reorganization, Sale of Assets.
(a) In case the Corporation, (i) shall reorganize, consolidate
with or merge into any other person and shall not be the
continuing or surviving corporation of such reorganization,
consolidation or merger, or (ii) shall transfer all or
substantially all of its properties or its assets to any other
person, then, in each such case, holders of Series A Preferred
Stock shall first receive for each such share of Series A
Preferred Stock, in cash or securities received from the
acquiring corporation or a combination thereof, at the closing of
any such transaction, an amount equal to the Stated Value (as
adjusted for any stock split, reverse stock split, stock
dividend, or similar event resulting in a change in the Series A
Preferred Stock) prior to any distribution to other security
holders of the Corporation. In the event the amount payable in
respect of the proposed transaction is not sufficient to permit
payment of the full amount described in the preceding sentence,
then the entire amount payable in respect of the proposed
transaction shall be distributed ratably among the holders of the
Series A Preferred Stock, according to their respective ownership
interests in such stock.
(b) After the distribution required by subsection (a) above, any
remaining consideration to be paid to shareholders of the
Corporation in such transaction shall be made in a manner so that
each share of Series A Preferred Stock then outstanding shall be
treated as if such share had been converted into Common Stock
immediately prior to the consummation of any of the transactions
described in subsection (a) above.
(c) Any securities to be delivered to the holders of the Series
A Preferred Stock pursuant to subsection (a) above shall be
valued (i) with respect to securities that are not (1)
"restricted securities" as defined by SEC Rule 144, (2) subject
to agreements with brokers on transferability, or (3) subject to
similar restrictions on free marketability, at the Market Price
per share, or (ii) with respect to securities subject to
investment letter or similar restrictions on free
transferability, the Market Price per share as discounted to
reflect the approximate fair market value thereof, as mutually
determined by the Corporation and the holders of two-thirds of
the outstanding Series A Preferred Stock.
Section 9. Redemption.
(a) Within 90 days after the end of each fiscal year of the
Corporation, each holder's Series A Preferred Stock shall be
mandatorily redeemable at the Redemption Price out of funds
legally available therefor from not less than one-third of the
Corporation's "Consolidated Net Income" (as defined below). For
purposes hereof "Consolidated Net Income" shall be computed in
accordance with generally accepted accounting principles
consistently applied as determined by the Corporation's
independent public accountants, provided that depreciation and
amortization shall include, in an aggregate amount not to exceed
$2,000,000, 50% of the amounts which would have been charged or
computed for the applicable fiscal year had the Writedowns (shown
on Schedule A to this Restated Certificate of Incorporation)
taken as of December 31, 1992 not occurred, and shall be charged
against income based on the amortization schedule set forth in
Schedule A subject to the above maximum amount. The Corporation
shall pay the Redemption Price for the Series A Preferred Stock
required to be redeemed hereunder in cash. Such mandatory
redemptions pursuant to this subsection (a) shall cease following
the fiscal year ending December 31, 2002.
(b) The Corporation shall have the right at any time to redeem
all outstanding shares of Series A Preferred Stock by paying
therefor the Redemption Price per share in cash without regard to
any subsequent or anticipated transaction.
(c) In the event that the Corporation shall redeem, repurchase,
exchange any security or property for, or otherwise acquire for
consideration any shares of Common Stock (excluding any
transaction to which Section 10 applies) at a price equal to or
greater than the Conversion Price, then, and in each such case,
any holder of shares of Series A Preferred Stock may require the
Corporation, at the sole option and election of the holder, to
redeem a number of shares of such holder's Series A Preferred
Stock which does not exceed the product of (A) the percentage of
the Corporation's Common Stock outstanding immediately prior to
the acquisition that the Corporation acquired through redemption,
repurchase, exchange or otherwise, multiplied by (B) the total
number of shares of Series A Preferred Stock held by such holder,
at the Redemption Price.
(d) Written notice of an election by the Corporation to redeem
shares of Series A Preferred Stock pursuant to subsection (b)
above, shall be given, by telecopy, telex or other written
notice, to the holders of the Series A Preferred Stock not less
than 30 days prior to the redemption date. Notice of an event or
circumstances which, pursuant to Section 9(c), gives the holder
or holders of shares of Series A Preferred Stock the right to
require the Corporation to redeem any of such shares, shall be
given to the holders of the Series A Preferred Stock as promptly
as possible. Any election by a holder to redeem pursuant to
Section 9(c), specifying the number of shares to be redeemed,
must be made in writing (which may be telexed, telecopied, or
otherwise delivered) within 30 business days following receipt by
the holder of the notice required by this subparagraph and the
Redemption Date shall be within 30 business days of the day
following receipt by the Corporation of such election (the
"Redemption Date"). All elections hereunder shall be irrevo-
cable. Failure of the Corporation to give any notice required by
this subsection (d), or the formal insufficiency of any such
notice, shall not prejudice the rights of any holders of Series A
Preferred Stock to cause the Corporation to redeem any such
shares held by them.
(e) In the event the Series A Preferred Stock to be redeemed in
any redemption pursuant to subsection (a), (b) or (c) is less
than all the Series A Preferred Stock then outstanding, the
number of Series A Preferred Stock to be redeemed from each
holder thereof shall be determined by multiplying the total
number of Series A Preferred Stock to be redeemed by a fraction
of which (i) the numerator shall be the number of Series A
Preferred Stock held by such holder and (ii) the denominator
shall be the total number of Series A Preferred Stock then
outstanding; provided that, if some but not all of the holders of
Series A Preferred Stock have submitted a direction to cause a
redemption pursuant to subsection (b), then only the Series A
Preferred Stock held by such holders shall be redeemed and the
Series A Preferred Stock owned by the holders that did not submit
such a direction shall not be treated as outstanding for purposes
of clause (ii) of the foregoing calculation.
(f) Notwithstanding paragraph (a) above, the calculation of
Consolidated Net Income for purposes of redemption of the Series
A Preferred Stock shall be subject to the following provisions:
(i) If the Corporation or any of its affiliates or subsidiaries
acquires all or substantially all of the equity interests in or
assets of any corporation, partnership or other entity (herein
called an "Acquisition") and in connection with such Acquisition
the Corporation or any of its affiliates or subsidiaries incurs
debt ("Acquisition Debt") or issues shares of any class of
redeemable preferred stock ("Acquisition Stock") to finance all
or a portion of the purchase price of such Acquisition, that
portion of Consolidated Net Income, if any, of the Corporation
attributable to the acquired entity or assets, to the extent such
net income is susceptible to being segregated from Consolidated
Net Income of the Corporation and fairly allocated to the
operations of such entity or assets under generally accepted
accounting principles (herein called "Acquisition Net Income"),
shall be reduced by (A) the principal amount of any repayments of
Acquisition Debt, (B) dividends paid on the Acquisition Stock,
(C) the principal amount of redemptions of Acquisition Stock and
(D) the principal amount of redemptions of Series A Preferred
Stock from Acquisition Cash Flow made pursuant to paragraph (h)
below (herein collectively called "Required Payments") actually
made by the obligor thereon or issuer thereof with respect to the
fiscal year for which such Acquisition Net Income is being
calculated before including such Acquisition Net Income in the
calculation of Consolidated Net Income under paragraph (a) above.
(For example, if a Subsidiary of the Corporation incurs
Acquisition Debt and issues Acquisition Stock in connection with
an Acquisition and the acquired entity has Acquisition Net Income
of $1,000,000 in a fiscal year and repays $250,000 of the
principal of the Acquisition Debt and redeems $250,000 of the
stated value of Acquisition Stock from income generated in such
fiscal year, only $500,000 ($1,000,000 - $500,000) of Acquisition
Net Income shall be included in Consolidated Net Income for
purposes of redemption of Series A Preferred Stock under
paragraph (a) above.) Such Required Payments shall be deducted
from Acquisition Net Income until the repayment of the original
principal amount of the Acquisition Debt or the redemption in
full of the original stated amount of the Acquisition Stock
issued in connection with such Acquisition.
(ii) To the extent the Corporation consummates an Acquisition and
Required Payments in connection therewith are made in an amount
that exceed the related Acquisition Net Income, the Corporation
shall not have the right to deduct the excess of such Required
Payments over Acquisition Net Income from the calculation of
Consolidated Net Income for purposes of redemption of the Series
A Preferred Stock under paragraph (a) above.
(iii) To the extent the Corporation consummates an
Acquisition and incurs a net loss (an "Acquisition Loss") in any
fiscal year, Consolidated Net Income shall be increased by the
amount of such Acquisition Loss for purposes of calculating
Consolidated Net Income for redemption of the Series A Preferred
Stock under paragraph (a) above.
(iv) Notwithstanding the foregoing, Consolidated Net Income for a
fiscal year shall be increased by the amount of any Required
Payments made to the Corporation or any of its affiliates or
subsidiaries in such fiscal year from income attributable to an
Acquisition for purposes of calculating Consolidated Net Income
under paragraph (a) above.
(g) The Corporation shall have the right from time to time to
redeem shares of the Series A Preferred Stock in accordance with
the terms of that certain Settlement Agreement dated April 13,
1995 among the Corporation, Beard Oil Company, New York Life
Insurance Company, New York Life Insurance and Annuity
Corporation, John Hancock Mutual Life Insurance Company, M D Co.,
as Nominee for Memorial Drive Trust.
(h) Notwithstanding the limitation on redemption in the last
sentence of paragraph (a) above, within 90 days after the end of
the fiscal year in which Acquisition Debt incurred and
Acquisition Stock issued in connection with an Acquisition has
been paid or redeemed in full, each holder's Series A Preferred
Stock shall be mandatorily redeemable on a pro rata basis at the
Redemption Price out of funds legally available therefor from
"Acquisition Cash Flow." For purposes of this paragraph (h),
"Acquisition Cash Flow" shall mean Acquisition Net Income with
respect to an Acquisition for the fiscal year in question
calculated in accordance with generally accepted accounting
principles minus all Required Payments under clauses (A), (B) and
(C) of subparagraph (f)(i) above and capital expenditures made in
such fiscal year plus the sum of depreciation, amortization and
other non-cash charges against earnings attributable to such
fiscal year.
Section 10. Conversion. Each share of the Series A Preferred
Stock shall be convertible into shares of Common Stock of the
Corporation on the terms and conditions set forth below in this
Section 10:
(a) Right to Convert. Each share of the Series A Preferred
Stock shall be convertible, at the sole option of the holder
thereof, at any time after the end of the redemption period
provided for in Section 9(a) hereof, in the manner hereinafter
set forth, into 3.84706875 fully paid and nonassessable share(s)
of Common Stock of the Corporation, which number of shares shall
be subject to adjustment in accordance with the terms of
subsection (b) below. The "Conversion Price" per share as used
herein shall be the Market Price per share of Common Stock into
which a share of Series A Preferred Stock is convertible as
determined on the date of the issuance of the Series A Preferred
Stock, subject to adjustment as set forth in subsection (b)
below.
(b) Adjustment. The number of shares of Common Stock into which
each share of the Series A Preferred Stock is convertible shall
be adjusted from time to time as follows:
(i) Stock Splits. In case the Corporation at any time or from
time to time shall effect a subdivision of the outstanding shares
of its Common Stock into a greater number of shares of Common
Stock (otherwise than by payment of a dividend in its Common
Stock), then, and in each such case, the number of shares of
Common Stock into which each share of the Series A Preferred
Stock is convertible shall be adjusted so that the holder of each
share thereof shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (A) the number of shares of Common Stock into which
such share was convertible immediately prior to the occurrence of
such event by (B) a fraction, the numerator of which is the sum
of (1) the number of shares of Common Stock into which such share
was convertible immediately prior to the occurrence of such event
plus (2) the number of shares of Common Stock which such holder
would have been entitled to receive in connection with the
occurrence of such event had such share been converted
immediately prior thereto, and the denominator of which is the
number of shares of Common Stock determined in accordance with
clause (1) above. An adjustment made pursuant to this
subparagraph (b)(i) shall become effective (x) in the case of any
such dividend, immediately prior to the close of business on the
record date for the determination of holders of Common Stock
entitled to receive such dividend, or (y) in the case of any such
subdivision, at the close of business on the day immediately
prior to the day upon which such corporate action becomes
effective;
(ii) Reverse Stock Split. In case the Corporation at any time or
from time to time shall combine or consolidate the outstanding
shares of its Common Stock into a lesser number of shares of
Common Stock, then, and in each such case, the number of shares
of Common Stock into which each share of the Series A Preferred
Stock is convertible shall be adjusted so that the holder of each
share thereof shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (A) the number of shares of Common Stock into which
such share was convertible immediately prior to the occurrence of
such event by (B) a fraction, the numerator of which is the
number of shares which the holder would have owned after giving
effect to such event had such share been converted immediately
prior to the occurrence of such event and the denominator of
which is the number of shares of Common Stock into which such
share was convertible immediately prior to the occurrence of such
event. An adjustment made pursuant to this subparagraph (b)(ii)
shall become effective at the close of business on the day
immediately prior to the day upon which such corporate action
becomes effective;
(iii) Adjustment to Conversion Price. In the event the
Corporation at any time or from time to time shall effect a
subdivision of the outstanding shares of its Common Stock into a
greater number of shares of Common Stock pursuant to subparagraph
(b)(i) above, the Conversion Price in effect as of the record
date for such subdivision shall be proportionately reduced as of
such record date, and conversely, in the event the Corporation at
any time or from time to time shall combine or consolidate the
outstanding shares of its Common Stock into a lesser number of
shares of Common Stock pursuant to subparagraph (b)(ii) above,
the Conversion Price in effect as of the record date for such
combination of consolidation shall be proportionately increased
as of such record date;
(iv) Rights, Options and Warrants.
A. In case the Corporation at any time or from time to time
shall grant, issue or sell rights, options or warrants to
subscribe for or purchase shares of its Common Stock (or
securities convertible into or exchangeable for its Common Stock)
(collectively referred to as "Convertible Securities") at a price
per share (or having a conversion price per share) (1) less than
the Conversion Price in effect on the record date fixed for the
determination of stockholders entitled to receive such right or
warrant, or (2) greater than the Conversion Price in effect
immediately prior to the time of granting such Convertible
Securities but less than the Market Price per share of Common
Stock, then, and in each such case the number of shares of Common
Stock into which each share of the Series A Preferred Stock is
convertible shall be adjusted so that the holder of each share
thereof shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by
multiplying (a) the number of shares of Common Stock into which
such share was convertible immediately prior to the occurrence of
such event by (b) a fraction, the numerator of which is the sum
of (I) the number of shares of Common Stock outstanding on such
record date plus (II) the number of additional shares of Common
Stock so offered for subscription or purchase, and the
denominator of which is the sum of (I) the number of shares of
Common Stock outstanding on such record date plus (II) the number
of shares of Common Stock which the aggregate consideration
receivable by the Corporation for the total number of shares of
Common Stock so offered would purchase at such Conversion Price
or Market Price, as applicable, on such record date. For
purposes of this subparagraph (b)(iv), the aggregate
consideration receivable by the Corporation in connection with
the issuance of rights or warrants to subscribe for or purchase
securities convertible into Common Stock shall be deemed to be
equal to the sum of the aggregate offering price of such
securities plus the minimum aggregate amount, if any, payable
upon conversion of such securities into shares of Common Stock.
An adjustment made pursuant to this subparagraph (b)(iv) shall be
made upon the issuance of any such rights or warrants and shall
be effective retroactively immediately prior to the close of
business on the record date fixed for the determination of
stockholders entitled to receive such rights or warrants. For
purposes of this subparagraph (b)(iv)(A), an adjustment shall not
be made with respect to the issuance of equity securities of the
Corporation pursuant to a valid qualified employee stock
ownership plan to employees who do not own directly or
beneficially (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934) 5% or more of the outstanding
capital stock or securities of the Corporation;
B. No further adjustment of the number of shares issuable upon
conversion of the Series A Preferred Stock will be made when
Convertible Securities are actually issued upon the exercise of
such option, rights or warrants or the conversion or exchange of
such Convertible Securities; and
(v) Sales of Common Stock. In case the Corporation at any time
or from time to time shall issue shares of its Common Stock at a
price per share (A) less than the Conversion Price in effect
immediately prior to the issuance of such Common Stock, or (B)
greater than the Conversion Price in effect immediately prior to
the issuance of such Common Stock but less than the Market Price
per share of Common Stock at such time, then, and in each such
case, the number of shares of Common Stock into which each share
of the Series A Preferred Stock is convertible shall be adjusted
so that the holder of each share thereof shall be entitled to
receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (1) the number of shares
of Common Stock into which such share was convertible immediately
prior to the occurrence of such event by (2) a fraction, the
numerator of which is the sum of (x) the number of shares of
Common Stock outstanding on the date of such issuance plus (y)
the number of additional shares of Common Stock offered for
subscription or purchase, and the denominator of which is the sum
of (x) the number of shares of Common Stock outstanding on the
date of such issuance plus (y) the number of shares of Common
Stock which the aggregate consideration receivable by the
Corporation for the total number of shares of Common Stock so
offered would purchase at such Conversion Price or Market Price,
as applicable, on the date of such issuance. For purposes of
this subparagraph (b)(v), the aggregate consideration receivable
by the Corporation in connection with the issuance of its shares
of Common Stock shall be deemed to be equal to the sum of the
aggregate offering price of such securities plus the minimum
aggregate amount, if any, payable upon such conversion of such
securities into shares of Common Stock. Any adjustment made
pursuant to this subparagraph (b)(v) shall be made upon the
issuance of any such Common Stock. For purposes of this
subparagraph (v), an adjustment shall not be made with respect to
the issuance of equity securities of the Corporation pursuant to
a valid qualified employee stock ownership plan to employees who
do not own directly or beneficially (as determined pursuant to
Rule 13d-3 under the Securities Exchange Act of 1934) 5% or more
of the outstanding capital stock or securities of the Corpora-
tion.
(c) Minimum Adjustment. If any adjustment in the number of
shares of Common Stock into which each share of the Series A
Preferred Stock may be converted required pursuant to this
Section 10 would result in an increase or decrease of less than
one percent (1%) in the number of shares of Common Stock into
which each share of the convertible Preferred Stock is then
convertible, the amount of any such adjustment shall be carried
forward and adjustment with respect thereto shall be made at the
time of and together with any subsequent adjustment; provided
that in any event such adjustments shall be made upon delivery of
written notice of conversion of any part of the Series A
Preferred Stock. All calculations under this paragraph (c) shall
be made to the nearest one-hundredth of a share.
(d) Procedure. The holder of any shares of the Series A
Preferred Stock may exercise his option to convert such shares
into shares of Common Stock by surrendering for such purpose to
the Corporation, at its principal office or at such other office
or agency maintained by the Corporation for that purpose, a
certificate or certificates representing the shares of Series A
Preferred Stock to be converted accompanied by a written notice
stating that such holder elects to convert all or a specified
whole number of such shares in accordance with the provisions of
this Section 10 and specifying the name or names in which such
holder wishes the certificate or certificates for shares of
Common Stock to be issued. In case such notice shall specify a
name or names other than that of such holder the certificate or
certificates so surrendered shall be properly endorsed or
otherwise in proper form for transfer. As promptly as
practicable, and in any event within five business days after the
surrender of such certificate or certificates and the receipt of
such notice relating thereto, the Corporation shall deliver or
cause to be delivered (i) a certificate or certificates
representing the number of validly issued, fully paid and
nonassessable shares of Common Stock of the Corporation to which
the holder of the Series A Preferred Stock so converted shall be
entitled and (ii) if less than the full number of shares of the
Series A Preferred Stock evidenced by the surrendered certificate
or certificates are being converted, a new certificate or
certificates, of like tenor, for the number of shares evidenced
by such surrendered certificate or certificates less the number
of shares converted. Such conversions shall be deemed to have
been made at the close of business on the date on which the
certificate or certificates representing the shares of the Series
A Preferred Stock to be converted have been surrendered. At such
time as the conversion has been effected, the rights of the
holder thereof shall cease except for the right to receive Common
Stock of the Corporation in accordance herewith, and the
converting holder shall be treated for all purposes as having
become the record holder of such Common Stock of the Corporation
at such time.
(e) No Fractional Shares. In connection with the conversion of
any shares of the Series A Preferred Stock, no fractions of
shares of Common Stock shall be issued, but the Corporation shall
pay a cash adjustment in respect of such fractional interest in
an amount equal to the Market Value (as of the date deemed to be
converted) of such fractional interest.
(f) Taxes. The Corporation will pay all taxes and other
governmental changes that may be imposed in respect of the
issuance or delivery of shares of Common Stock upon conversion of
shares of Series A Preferred Stock.
(g) Reservation of Stock. The Corporation shall at all times
reserve and keep available out of its authorized Common Stock the
full number of shares of Common Stock of the Corporation issuable
upon the conversion of all outstanding shares of the Series A
Preferred Stock.
(h) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section
10 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the
holders of the Series A Preferred Stock against impairment.
Section 11. Notices.
(a) Whenever the number of shares of Common Stock into which
the shares of the Series A preferred Stock are convertible is
adjusted as provided in Section 10, the Corporation shall
promptly compute such adjustment and furnish to each holder of
Series A Preferred Stock a certificate, signed by a principal
financial officer of the Corporation, setting forth the number of
shares of Common Stock into which each share of the Series A
Preferred Stock is convertible as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the
computation thereof, and when such adjustment became or will
become effective.
(b) The Corporation shall give written notice to all holders of
Series A Preferred Stock at least 10 days prior to the date on
which the Corporation closes its books or takes a record (i) with
respect to any pro rata subscription offer to holders of Common
Stock or (ii) for determining rights to vote with respect to any
dissolution, liquidation, merger, consolidation, or similar
action.
Section 12. Shares Reacquired. Any shares of the Series A
Preferred Stock convened, redeemed, purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof.
Section 13. Notices. All notices or other communications
referred to in this resolution, except as otherwise expressly
provided, shall be hand delivered or given by registered or
certified mail, return receipt requested, postage prepaid, and
shall be deemed to have been given when so hand delivered or
within two days of mailing.
2. COMMON STOCK
Each share of Common Stock of the Corporation shall be
equal in all respects to each other share. The holders of Common
Stock shall be entitled to one vote for each share of Common
Stock held with respect to all matters as to which the Common
Stock is entitled to be voted.
Subject to the preferential and other dividend rights,
if any, applicable to the shares of Preferred Stock, the holders
of the Common Stock shall be entitled to receive such dividends
(payable in cash, stock or otherwise) as may be declared on the
Common Stock by the board of directors at any time or from time
to time out of any funds legally available therefor.
In the event of any voluntary or involuntary liquida-
tion, dissolution or winding up of the Corporation, after dis-
tribution in full of the preferential and/or other amounts to be
distributed to the holders of the shares of the Preferred Stock,
if any shall be outstanding, the holders of the Common Stock
shall be entitled to receive all of the remaining assets of the
Corporation available for distribution to its stockholders,
ratably in proportion to the number of shares of Common Stock
held by them.
3. SECTION 382 TRANSFER RESTRICTIONS
Section 3.1 Transfer Restrictions. In order to preserve
the net operating loss carryovers (including any "net unrealized
built-in loss," as defined under applicable law), capital loss
carryovers, general business credit carryovers, alternative
minimum tax credit carryovers and foreign tax credit carryovers
(the "Tax Benefits") to which the Corporation is entitled
pursuant to the Internal Revenue Code of 1986, as amended, or any
successor statute (collectively, the "Code") and the Treasury
Regulations promulgated thereunder (the "Treasury Regulations"),
the following restrictions shall apply until the earlier of (x)
the day after the thirteenth (13th) anniversary of the filing of
this Certificate of Incorporation with the Secretary of State of
Oklahoma (the "Filing Date"), (y) the repeal of Section 382 of
the Code, if the Board of Directors determines that the
restrictions are no longer necessary after such repeal, and (z)
the beginning of a taxable year of the Corporation to which the
Board of Directors determines that no Tax Benefits may be carried
forward, unless the Board of Directors shall fix an earlier or
later date in accordance with Section 3.7 of this Article Five
(such date is sometimes referred to herein as the "Expiration
Date"):
(1) For the purposes of this Article Five, (a) a
"Prohibited Ownership Percentage" shall mean any ownership of the
Corporation's stock that would cause a person or Public Group to
be a "5-percent shareholder" of the Corporation within the
meaning of Treasury Regulation Section 1.382-2T(g)(1); (b) a
"Public Group" shall have the meaning contained in Treasury
Regulation Section 1.383-2T(f)(13); (c) a "Person" shall mean any
individual, corporation, estate, trust, association, company,
partnership, joint venture, or similar organization (including
the Corporation); (d) "Transfer" refers to any means of conveying
legal or beneficial ownership of shares of stock of the
corporation, whether such means are direct or indirect, voluntary
or involuntary, including, without limitation, the issuance by
the Corporation of shares of stock of the Corporation (without
regard to whether such shares are treasury shares or authorized
but unissued shares) and the transfer of ownership of any entity
that owns shares of stock of the Corporation; and "Transferee"
means any Person to whom stock of the Corporation is Transferred.
(2) From and after the Filing Date, no Person shall Transfer
any shares of stock of the Corporation (other than stock described in
Section 1504(a)(4) of the Code, or stock that is not so described
solely because it is entitled to vote as a result of dividend
arrearages) to any other Person to the extent that such Transfer,
if effective, (i) would cause the Transferee or any Person or
Public Group to have a Prohibited Ownership Percentage; (ii)
would increase the ownership percentage of any Transferee or any
Person or Public Group having a Prohibited Ownership Percentage;
or (iii) would create a new Public Group under Treasury
Regulation Section 1.382-2T(j)(3)(i).
(3) Any Transfer of shares of stock of the Corpora-
tion that would otherwise be prohibited pursuant to the preceding
subsection, including but not limited to the issuance of stock by
the Corporation pursuant to the exercise of any warrants, options
or other rights to acquire stock in the Corporation, shall
nonetheless be permitted if information relating to a specific
proposed transaction is presented to the Board of Directors (the
"Board") and the Board determines that, based on the facts in
existence at the time of such determination, such transaction
will not jeopardize the Corporation's full utilization of the Tax
Benefits, based upon the opinion of legal counsel selected by the
Board to that effect.
(4) Notwithstanding anything contained herein to the contrary,
this Article Five shall not apply to any transaction or series of
transactions which the Board, in its sole discretion upon the
exercise of its fiduciary duties in accordance with applicable
law, determines to be in the best interests of the stockholders
of the Corporation.
Section 3.2 Attempted Transfer in Violation of Transfer
Restriction. Unless approval of the Board is obtained as
provided in subsection (3) or subsection (4) of Section 3.1 of
this Article Five, any attempted Transfer of shares of stock of
the Corporation in excess of the shares that could be Transferred
to the Transferee without restriction under subsection (2) of
Section 3.1 of this Article Five is not effective to Transfer
ownership of such excess shares (the "Prohibited Shares") to the
purposed acquiror thereof (the "Purposed Acquiror"), who shall
not be entitled to any rights as a Stockholder of the Corporation
with respect to the Prohibited Shares (including, without
limitation, the right to vote or to receive dividends with
respect thereto). The transfer agent of the stock of the
Corporation shall not recognize the purposed transfer of the
Prohibited Shares to the Purposed Acquiror. All rights with
respect to the Prohibited Shares shall (i) be deemed to have been
acquired in equal amounts by the Charitable Organizations (as
defined below) and (ii) be transferred to a person nominated and
appointed by the Board from time to time (the "Agent") to act as
agent for the Charitable Organizations (in the absence of such
designation the Corporation shall act as Agent), until such time
as the Prohibited Shares are resold as set forth in subsection
(1) or subsection (2) of this Section 3.2. As agent, Agent shall
exercise all rights incident to ownership of the Prohibited
Shares. The Purported Acquiror, by acquiring ownership of shares
of stock of the Corporation that are not Prohibited Shares, shall
be deemed to have consented to all the provisions of this Article
Five and to have agreed to act as provided in the following
subsection (1) of Section 3.2. The Corporation, the Board and
the Agent shall be fully protected in relying in good faith upon
the information, opinions, reports or statements of the chief
executive officer, the chief financial officer, or the chief
accounting officer of the Corporation or of the Corporation's
legal counsel, independent auditors, transfer agent, investment
bankers, and other employees and agents in making the
determinations and findings contemplated by this Section 3.2, and
neither the Corporation, the Board nor the Agent shall be
responsible for any good faith errors made in connection
therewith.
(1) Upon demand by the Agent, the Purported Acquiror shall
transfer any certificate or other evidence of the Purported
Acquiror's possession or control of the Prohibited Shares, along
with any dividends or other distributions paid by the Corporation
with respect to the Prohibited Shares that were received by the
Purported Acquiror (the "Prohibited Distributions"). If the
Purported Acquiror has sold the Prohibited Shares to an unrelated
party in an arms-length transaction after purportedly acquiring
them, the Purported Acquiror shall be deemed to have sold the
Prohibited Shares as agent for the Charitable Organizations, and
in lieu of transferring the Prohibited Shares and Prohibited
Distributions to the Agent shall transfer to the Agent the
Prohibited Distributions and the proceeds of such sale (the
"Resale Proceeds"), except to the extent that the Agent grants
written permission to the Purported acquiror to retain a portion
of the Resale Proceeds not exceeding the amount that would have
been payable by the Agent to the Purported Acquiror pursuant to
the following subsection (2) if the Prohibited Shares had been
sold by the Agent rather than by the Purported Acquiror. Any
purported transfer of the Prohibited Shares by the Purported
Acquiror other than a transfer described in one of the two
preceding sentences shall not be effective to transfer any
ownership of the Prohibited Shares.
(2) The Agent shall sell in an arms-length transaction (through
the American Stock Exchange, if possible) any Prohibited Shares
transferred to the Agent by the Purported Acquiror, and the
proceeds of such sale (the "Sale Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated, after reimbursement
to the Agent of its expenses, to the Purported Acquiror up to the
following amount: (i) where applicable, the purported purchase
price paid or value of consideration surrendered by the Purported
Acquiror for the Prohibited Shares, or (ii) where the purported
Transfer of the Prohibited Shares to the Purported Acquiror was
by gift, inheritance, or any similar purported Transfer, the fair
market value of the Prohibited Shares at the time of such
purported Transfer. Subject to the succeeding provisions of this
subsection, any Resale Proceeds or Sales Proceeds in excess of
the Agent's expenses and the amount allocable to the Purported
Acquiror pursuant to the preceding sentence, together with any
Prohibited Distributions, shall be paid in equal shares to the
charitable organizations designated from time to time by the
Corporation that qualify as entities described in Section
501(c)(3) of the Code (the "Charitable Organizations"). In the
absence of such designation, the Agent shall designate one or
more Charitable Organizations, in its discretion, such that there
is a sufficient number of Charitable Organizations none of which
will own a Prohibited Ownership Percentage. In no event shall
any such amounts due to the Charitable Organizations inure to the
benefit of the Corporation or the Agent, but such amounts may be
used to cover expenses incurred by the Agent.
Section 3.3 Prompt Enforcement Against Purported Acquiror.
Within thirty (30) business days of learning of the purported
Transfer of Prohibited Shares to a Purported Acquiror, the
Corporation through its Secretary shall demand that the Purported
Acquiror surrender to the Agent the certificates representing the
Prohibited Shares, or any Resale Proceeds, and any Prohibited
Distributions, and if such surrender is not made by the Purported
Acquiror within thirty (30) business days from the date of such
demand, the Corporation shall institute legal proceedings to
compel such transfer; provided, however, that nothing in this
Section 3.3 shall preclude the Corporation in its discretion from
immediately bringing legal proceedings without a prior demand,
and provided further that failure of the Corporation to act
within the time periods set out in this Section 3.3 shall not
constitute a waiver of any right of the Corporation to compel any
transfer required in subsection (1) of Section 3.2.
Section 3.4 Additional Actions to Prevent Violation or
Attempted Violation. Upon a determination by the Board that
there has been or is threatened a purported Transfer of
Prohibited Shares to a Purported Acquiror, the Board may take
such action in addition to any action required by the preceding
paragraph as it deems advisable to give effect to the provisions
of this Article Five, including, without limitation, refusing to
give effect on the books of this Corporation to such purported
Transfer. Nothing herein shall preclude the settlement of
transactions entered into through the facilities of the American
Stock Exchange.
Section 3.5 Obligation to Provide Information. The Corpo-
ration may require as a condition to the registration of the
Transfer of any shares of its stock that the proposed Transferee
furnish to the Corporation all information reasonably requested
by the Corporation with respect to all the proposed Transferee's
direct or indirect ownership interest in, or options to acquire,
stock of the Corporation.
Section 3.6 Legends. All certificates evidencing owner-
ship of shares of stock of this Corporation that are subject to the
restrictions on Transfer contained in this Article Five shall
bear a conspicuous legend referencing the restrictions set forth
in this Article Five, which shall be generally to the following
effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET
FORTH IN ARTICLE FIVE OF THE CORPORATION'S CER-
TIFICATE OF INCORPORATION. THE RESTRICTIONS
GENERALLY PROHIBIT ANY PERSON (BROADLY DEFINED)
FROM BECOMING A HOLDER (BROADLY DEFINED) OF 5%
OR MORE OF THE CORPORATION'S OUTSTANDING STOCK,
ACTUALLY AND CONSTRUCTIVELY. ANY ATTEMPT TO
ACQUIRE COMMON STOCK OR PREFERRED STOCK OF THE
CORPORATION IN VIOLATION OF SUCH RESTRICTIONS
SHALL BE NULL AND VOID AND MAY RESULT IN FINAN-
CIAL LOSS TO THE PERSON OR ENTITY ATTEMPTING
SUCH ACQUISITION."
Section 3.7 Further Actions. Subject to the provisions
of Section 3.4 of this Article Five, nothing contained in this
Article Five shall limit the authority of the Board to take such
other action to the extent permitted by law as it deems necessary
or advisable to protect the Corporation and the interest of the
holders of its securities in preserving the Tax Benefits.
Without limiting the generality of the foregoing, in the event of
a change in law making one or more of the following actions
necessary or desirable or in the event that the Board believes
that such actions are in the best interest of the Corporation and
its Stockholders, the Board may (i) accelerate or extend the
Expiration Date or modify the definitions of any terms set forth
in this Article Five; provided that the Board shall determine in
writing that such acceleration, extension change or modification
is reasonably necessary or desirable to preserve the Tax Benefits
under the Code and the regulations thereunder or that the
continuation of these restrictions is no longer reasonably
necessary for the preservation of the Tax Benefits, which determi-
nation shall be based upon an opinion of legal counsel to the
Corporation and which determination shall be filed with the
Secretary of the Corporation and mailed by the Secretary to the
Stockholders of this Corporation within ten days after the date
of any such determination. In addition, the Board may, to the
extent permitted by law, from time to time establish, modify,
amend or rescind Bylaws, regulations and procedures of the
Corporation not inconsistent with the express provisions of this
Article Five for purposes of determining whether any acquisition
of stock of the Corporation would jeopardize the Corporation's
ability to preserve and use the Tax Benefits, and for the orderly
application, administration and implementation of the provisions
of this Article Five. Such procedures and regulations shall be
kept on file with the Secretary of the Corporation and with its
transfer agent and shall be made available for inspection by the
public and, upon request, shall be mailed to any holder of stock
of the Corporation.
ARTICLE SIX
Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class
of them, any court within the State of Oklahoma may, on the
application in a summary way of this Corporation under the
provisions of Section 1106 of the Act or on the application of
trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 1100 of the
Act order a meeting of the creditors or class of creditors and/or
of the stockholders or class of stockholders of this Corporation,
as the case may be, to be summoned in such manner as the court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as a consequence of such
compromise or arrangement, the compromise or arrangement and the
reorganization shall, if sanctioned by the court to which the
application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also
on this Corporation.
ARTICLE SEVEN
To the fullest extent permitted by the Act as the same
exists or may hereafter be amended, a director of this Corpora-
tion shall not be liable to the Corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director.
ARTICLE EIGHT
The number of directors which shall constitute the
whole board shall be not more than nine (9) and not less than
three (3). The board of directors shall from time to time by a
vote of a majority of the directors then in office fix within the
maximum and minimum the number of directors which shall consti-
tute the board. The board of directors shall be divided into
three classes as nearly equal in number as possible with the term
of office of one class expiring each year. Of the directors
chosen at the first stockholders' meeting, the term of office of
those of the first class shall expire at the first annual meeting
after their election; the term of office of those of the second
class shall expire at the second annual meeting after their
election; and the term of office of those of the third class
shall expire at the third annual meeting after their election.
At each annual meeting held after such classification and elec-
tion, directors shall be chosen for a full term of three years to
succeed those whose terms expire. When the number of directors
is changed any newly created directorship or any decrease in
directorship shall be so apportioned among the classes as to make
all classes as nearly equal in number as possible.
Subject to the rights, if any, of the holders of Pre-
ferred Stock to elect directors, vacancies and newly created
directorships resulting from any increase in the authorized
number of directors shall be filled by a majority of the direc-
tors then in office, though less than a quorum, or by a sole
remaining director. The directors so chosen shall hold office
until the next annual election of the class for which each such
director has been chosen and until his successor is duly elected
and qualified, or until his earlier resignation or removal. No
decrease in the number of directors constituting the board of
directors shall shorten the term of an incumbent director.
Subject to the rights, if any, of the holders of Preferred Stock
to elect directors, directors shall be chosen by a plurality of
votes cast in an election for directors.
ARTICLE NINE
SECTION A. Notwithstanding any other provisions of the Act,
the Corporation shall not engage in any business combination with
any interested shareholder, unless:
1. prior to the date on which a person becomes an interested
shareholder, the board of directors of the Corporation approved
either the business combination or the transaction which resulted
in the person becoming an interested shareholder;
2. upon consummation of the transaction which resulted in the
person becoming an interested shareholder, the interested share
holder owned of record or beneficially capital stock having at
least eighty-five percent (85%) of all voting power of the
Corporation at the time the transaction commenced, excluding for
purposes of determining such voting power the votes attributable
to those shares owned of record or beneficially by employee stock
plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or
3. on or subsequent to the date a person becomes an interested
shareholder, the business combination is approved by the board of
directors and authorized at an annual or special meeting of
shareholders, and not by written consent, by the affirmative vote
of at least sixty-six and two-thirds percent (66-2/3%) of all
voting power which is not attributable to shares owned of record
or beneficially by the interested shareholder.
Section B. The restrictions contained in Section A of this
Article Nine shall not apply if:
1. the business combination is proposed prior to the con-
summation or abandonment, and subsequent to the earlier of the
public announcement or the notice required hereunder, of a
proposed transaction which:
a. constitutes one of the transactions described in subsection
2 of this Section B,
b. is with or by a person who either is not an interested
shareholder or who became an interested shareholder with the
approval of the Corporation's board of directors, and
c. is approved or not opposed by a majority of the members of
the board of directors then in office who were directors prior to
any person becoming an interested shareholder or were recommended
for election or elected to succeed such directors by a majority
of such directors ("continuing directors");
2. the proposed transactions referred to in subsection 1 of
this Section B are limited to:
a. a share acquisition pursuant to Section 1090.1 of the Act,
or a merger or consolidation of the Corporation, except for a
merger in respect of which, pursuant to subsection F of Section
1081 of the Act, no vote of the shareholders of the Corporation
is required, or
b. a sale, lease, exchange, mortgage, pledge, transfer or other
disposition, in one transaction or a series of transactions,
whether as part of a dissolution or otherwise, of assets of the
Corporation or of any direct or indirect majority-owned
subsidiary of the Corporation, other than to any direct or
indirect wholly-owned subsidiary or to the Corporation, having an
aggregate market value equal to fifty percent (50%) or more of
either the aggregate market value of all the assets of the Corp-
oration determined on a consolidated basis or the aggregate
market value of all the outstanding stock of the Corporation.
The Corporation shall give not less than twenty (20) days notice
to all interested shareholders prior to the consummation of any
of the transactions described in divisions (a) or (b) of this
subsection.
Section C. The restrictions contained in Section A of this
Article Nine shall not apply to a business combination which is
proposed prior to the consummation or abandonment of, and subse-
quent to the public announcement of, a proposed tender or ex-
change offer for the outstanding stock of the Corporation which
represents fifty percent (50%) or more of all voting powers of
the Corporation if all of the following conditions are met:
1. 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 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 (i) within the two-year period immediately
prior to the first public announcement of the proposal of the
business combination (the "Announcement Date") or (ii) in the
transaction in which it became an interested shareholder (the
date of such transaction being referred to herein as the
"Determination Date"), whichever is higher; or
b. the fair market value per share of common stock on the
Announcement Date or the Determination Date, whichever is higher.
This subsection shall be used if the interested shareholder has
not acquired any common stock.
2. 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:
a. the highest per share price (including any brokerage com-
missions, transfer taxes and soliciting dealers' fees) paid by
the interested shareholder for any shares of such class of voting
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;
b. the highest preferential amount per share to which the
holders of shares of such class of voting stock are entitled in
the event of any voluntary or involuntary liquidation, dissolu-
tion or winding up of the Corporation; or
c. the fair market value per share of such class of voting
stock on the Announcement Date or on the Determination Date,
whichever is higher.
3. 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 has
previously paid for the largest number of shares of such class of
voting stock.
4. After such interested shareholder has become an interested
shareholder and prior to the consummation of such business
combination: (a) except as approved by three-fourths (3/4) of the
continuing directors, there shall have been no failure to declare
and pay at the regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding preferred stock
(if any); (b) there shall have been (1) no reduction in the
annual rate of dividends, if any, paid on the common stock,
except as approved by a majority of the continuing directors, and
(2) no failure to increase the 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.
5. A proxy or information statement, describing the proposed
business combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and the rules and regulations thereunder shall be prepared and
mailed by the Corporation, at the expense of the interested
shareholder, to stockholders of the Corporation at least 30 days
prior to the meeting at which such business combination will be
voted upon (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).
Section D. As used in this Article Nine:
1. "affiliate" means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, another person;
2. "all voting power" means the aggregate number of votes which
the holders of all classes of capital stock of the Corporation
would be entitled to cast in an election of directors generally;
3. "associate", when used to indicate a relationship with any
person, means:
a. any corporation or organization of which such person is a
director, officer or partner or is, of record or beneficially,
the owner of outstanding stock of the Corporation having twenty
percent (20%) or more of all voting power of the Corporation,
b. any trust or other estate in which such person has at least
a twenty percent (20%) beneficial interest or as to which such
person serves as trustee or in a similar fiduciary capacity, and
c. any relative or spouse of such person, or any relative of
such spouse, who has the same residence of such person;
4. "beneficial ownership" shall have the meaning ascribed to
such term by Rule 13d-3 under the Exchange Act except that a
person shall be deemed to be the owner or beneficial owner of
securities of which he has the right to acquire ownership either
immediately or only after the passage of any time or the giving
of notice or both; provided, however, that a person shall not be
deemed the owner or beneficial owner of any stock if:
a. the agreement, arrangement or understanding to vote such
stock arises solely from a revocable proxy or consent given in
response to a proxy or consent solicitation made to more than ten
persons, or
b. the stock is tendered pursuant to a tender or exchange offer
made by such person or any of such person's affiliates or
associates, until such tendered stock is accepted for purchase or
exchange;
5. "business combination", when used in reference to the
Corporation and any interested shareholder of the Corporation,
means:
a. any merger or consolidation of the Corporation or any direct
or indirect majority-owned subsidiary of the Corporation with:
(1) the interested shareholder, or
(2) any other corporation if the merger or consolidation is
caused by the interested shareholder and as a result of such
merger or consolidation Section A of this Article is not
applicable to the surviving corporation,
b. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition, in one transaction or a series of transac-
tions, except as proportionately as a shareholder of the Corpora-
tion, to or with the interested shareholder, whether as part of a
dissolution or otherwise, of assets of the Corporation or of any
direct or indirect majority-owned subsidiary of the Corporation
which assets have an aggregate market value equal to ten percent
(10%) or more of either the aggregate market value of all the
assets of the Corporation determined on a consolidated basis or
the aggregate market value of all the outstanding stock of the
Corporation,
c. any transaction, which results in the issuance or transfer
by the Corporation or by any direct or indirect majority-owned
subsidiary of the Corporation of any stock of the Corporation or
of such subsidiary to the interested shareholder, except:
(1) pursuant to the exercise, exchange or conversion of
securities exercisable for, exchangeable for or convertible into
stock of the Corporation or any such subsidiary which securities
were outstanding prior to the time that the interested
shareholder became such,
(2) pursuant to a dividend or distribution paid or made, or the
exercise, exchange or conversion of, securities exercisable for,
exchangeable for or convertible into stock of the Corporation or
any such subsidiary which security is distributed pro rata to all
holders of a class or series of stock of the Corporation
subsequent to the time the interested shareholder became such, or
(3) pursuant to an exchange offer by the Corporation to purchase
stock made on the same terms to all holders of said stock;
provided, however, that in no case under divisions (2) and (3) of
this subparagraph c shall there be an increase in the interested
shareholder's proportionate share of the stock of any class or
series of the Corporation or of all voting power of the Corpo-
ration,
d. any transaction involving the Corporation or any direct or
indirect majority-owned subsidiary of the Corporation which has
the effect, directly or indirectly, of increasing the propor-
tionate share of the stock of any class or series, or securities
convertible into the stock of any class or series, or all voting
power, of the Corporation or of any such subsidiary which is
owned by the interested shareholder, except as a result of
immaterial changes due to fractional share adjustments or as a
result of any purchase or redemption of any shares of stock not
caused, directly or indirectly, by the interested shareholder,
e. any receipt by the interested shareholder of the benefit,
directly or indirectly, except proportionately as a shareholder
of the Corporation, of any loans, advances, guarantees, pledges,
or other financial benefits, other than those expressly permitted
in subparagraphs a through d of this paragraph, provided by or
through the Corporation or any direct or indirect majority-owned
subsidiary, or
f. any share acquisition by the interested shareholder from the
Corporation or any direct or indirect majority-owned subsidiary
of the Corporation pursuant to Section 1090.1 of the Act;
6. "continuing director" has the meaning established in Section
B.1.c.
7. "control", including the terms "controlling", "controlled
by" and "under common control with", means the possession, di-
rectly or indirectly, of the power to direct or cause the direction
of the management and policies of a person, whether through the
ownership of voting stock, by contract, or otherwise. A person
who owns, of record or beneficially, outstanding stock of the
Corporation having twenty percent (20%) or more of all voting
power of the Corporation shall be presumed to have control of the
Corporation, in the absence of proof by a preponderance of the
evidence to the contrary. Notwithstanding the foregoing, a
presumption of control shall not apply where such person holds
stock, in good faith and not for the purpose of circumventing
this section, as an agent, bank, broker, nominee, custodian or
trustee for one or more owners who do no individually or as a
group have control of the Corporation.
8. "fair market value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period ending on the
date in question of a share of such stock on the principal United
States securities exchange registered under the Exchange Act on
which such stock is listed or on the Nasdaq National Market, or,
if the stock is not listed on any such exchange or the Nasdaq
National Market, the highest closing bid quotation with respect
to a share of such stock during the 30-day period ending on the
date in question on the Nasdaq SmallCap Market 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 deter-
mined by the board in good faith; and (ii) in the case of prop
erty other than cash or stock, the fair market value of such
property on the date in question by the board in good faith.
9. "group" means two or more persons who agree to act together
for the purpose of acquiring, holding, voting or disposing of
securities of the Corporation;
10. a. "interested shareholder" means:
(1) any person, other than the Corporation and any direct or
indirect majority-owned subsidiary of the Corporation, that:
(a) owns of record or beneficially outstanding stock of the
Corporation having ten percent (10%) or more of all voting power
of the Corporation, or
(b) is an affiliate or associate of the Corporation and
owned of record or beneficially outstanding stock of the Corpo-
ration having ten percent (10%) or more of all voting power
of the Corporation, and
(2) the affiliates and associates of such person;
b. the term "interested shareholder" shall not include any
person whose ownership of shares in excess of the ten percent
(10%) limitation set forth herein is the result of action taken
solely by the Corporation provided that such person shall be an
interested shareholder if thereafter he acquires additional
shares of voting stock of the Corporation, except as a result of
further corporate action not caused, directly or indirectly, by
such person;
c. for the purpose of determining whether a person is an
interested shareholder, the stock of the Corporation deemed to be
outstanding shall include stock owned of record or beneficially
by such person, but shall not include any other unissued stock of
the Corporation which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise;
11. "person" means any individual, corporation, partnership,
unincorporated association, any other entity, any group and any
member of a group.
ARTICLE TEN
SECTION 1. Prevention of "Greenmail". Any direct or indirect
purchase or other acquisition by the Corporation of any Equity
Security (as hereinafter defined) of any class from any
Interested Securityholder (as hereinafter defined) who has
beneficially owned such securities for less than two years prior
to the date of such purchase or any agreement in respect thereof
shall, except with respect to any class of Equity Security which
by its terms is redeemable by the Corporation (in accordance with
such terms) or as hereinafter expressly provided, require the
affirmative vote of the holders of at least a majority of the
voting power of the then outstanding shares of Voting Stock,
voting together as a single class (it being understood that for
the purposes of this Article Ten each share of the Voting Stock
shall have the number of votes granted to it pursuant to Article
Five of this Certificate of Incorporation). 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 any agreement of any national securities exchange, or other
wise, but no such affirmative vote shall be required with respect
to any purchase or other acquisition of securities made as part
of a tender or exchange offer by the Corporation to purchase
securities of the same class made on the same terms to all
holders of such securities and complying with the applicable
requirements of the Exchange Act and the rules and regulations
thereunder (or any subsequent provisions replacing the Exchange
Act, rules or regulations).
Section 2. Certain Definitions. For the purposes of this
Article Ten:
A. The terms "affiliate," "all voting power," "asso-
ciate," "beneficial owner" and "person" shall
have the meanings ascribed to such terms in
Article Nine.
B. "Interested Securityholder" shall mean any
person (other than the Corporation or any wholly-
owned subsidiary) who or which:
(i) is the record or beneficial owner of 5% or
more of the class of securities to be
acquired; 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 record or beneficial owner of 5% or more
of the class of securities to be acquired; or
(iii) is an assignee of or has otherwise
succeeded to any shares of the class of
securities to be acquired which were at any
time within the two-year period immediately
prior to the date in question beneficially
owned by an Interested Securityholder, if
such assignment or succession shall have
occurred in the course of a transaction or
transactions not involving a public offering
within the meaning of the Securities Act of
1933; provided, however, a person shall not
be deemed to be an Interested Securityholder
if such person has acquired the class of
securities to be acquired by gift from a
person who has owned such securities for at
least five years.
C. For the purpose of determining whether a person
is an Interested Securityholder pursuant to
paragraph B of this Section 2, the relevant
class of securities outstanding shall be deemed
to comprise all such securities deemed owned
through application of paragraph C of this
Section 2 but shall not include any other
securities of such class which may be issuable
pursuant to any agreement, arrangements or
understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
D. "Equity Security" shall have the meaning
ascribed to such term in Section 3(a)(11) of the
Exchange Act as in effect on the date hereof.
ARTICLE ELEVEN
Section 1. Notwithstanding any other provision of this
Restated Certificate of Incorporation or the Bylaws of the Corpo-
ration (and notwithstanding the fact that a lesser percentage may
be specified by law, this Restated Certificate of Incorporation
or the Bylaws of the Corporation), the affirmative vote of the
holders of 80% or more of the voting power of the Corporation
shall be required to amend or repeal, or adopt any provisions
inconsistent with, Article Nine, Article Ten and this Article
Eleven of this Restated Certificate of Incorporation.
Section 2. Sections 1145 through 1155 of the Act shall not
apply from and after the date of filing the Certificate of
Incorporation to any control shares if the control share acquisi-
tion is approved by a majority of the board of directors prior to
such acquisition.
The undersigned hereby makes, files and records this
Restated Certificate of Incorporation, and certifies that the
facts herein stated are true, this 20th day of September, 2000.
HERB MEE, JR.
Herb Mee, Jr., President
ATTEST:
REBECCA G. WITCHER
Rebecca G. Witcher, Secretary