EXHIBIT C
CERTIFICATE OF INCORPORATION
OF
THE NBC COMPANY
ARTICLE ONE
The name of the Corporation is:
THE NBC 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 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 10,000,000 $.001
The preferences, qualifications, limitations, restrictions 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 limitations
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 designation, 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 preferential amount to which they are entitled,
then such assets shall be distributed ratably among the shares of all
series in accordance 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
NASDAQ 1(b)
NMS 1(b)
Redemption Date 9
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 $0.001 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 $0.001 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 securities 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 ease 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 91,250,
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, $.001 par value per share (the "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 securities 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 bc 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 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 irrevocable. 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
5.129425 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 of 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 p]us 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) shaD 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 Corporation.
(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 liquidation, dissolution
or winding up of the Corporation, after distribution 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
fourteenth (14th) 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, 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 Four (such date is sometimes referred to
herein as the "Expiration Date"):
(1) For purposes of this Article Four, (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 Corporation that
would otherwise be prohibited pursuant to the preceding subsection,
including but no 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 Four 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 Four, 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 Four 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 (i) 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 Four 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 Four, 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 Corporation 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 ownership of shares
of stock of this Corporation that are subject to the restrictions on
Transfer contained in this Article Four shall bear a conspicuous legend
referencing the restrictions set forth in this Article Four.
Section 3.7 FURTHER ACTIONS. Subject to the provisions of Section
3.4 of this Article Four, nothing contained in this Article Four 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 Four; 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 determination 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 Four 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 Four. 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 FIVE
The duration of the Corporation is perpetual.
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 Corporation 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 constitute 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 election, 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 Preferred 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 directors 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 shareholder
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 consummation 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
Corporation 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 subsequent to the public announcement
of, a proposed tender or exchange 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
commissions, 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, dissolution
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 transactions,
except as proportionately as a shareholder of the Corporation,
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
Corporation,
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
proportionate 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, directly 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 determined by the board in
good faith; and (ii) in the case of property other than cash or
stock, the fair market value of such property on the date in
question 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 Corporation 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 Four 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 otherwise, 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," "associate," "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 Certificate of
Incorporation or the Bylaws of the Corporation (and notwithstanding the
fact that a lesser percentage may be specified by law, this 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 Certificate of
Incorporation.
Section 2. Sections 1145 through 1155 of the Act shall not apply from
and after the date of filing this Certificate of Incorporation to any
control shares if the control share acquisition is approved by a majority
of the board of directors prior to such acquisition.
The undersigned hereby makes, files and records this Certificate of
Incoropration, and certifies that the facts herein stated are true, this
_____ day of __________, 1997.
THE BEARD COMPANY
ATTEST:
By
_________________, Secretary Herb Mee, Jr., President