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EXHIBIT 3.4
[EXECUTION VERSION]
CERTIFICATE OF DESIGNATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
SIERRA WELL SERVICE, INC.
SIERRA WELL SERVICE, INC., a Delaware corporation (the "Corporation"),
DOES HEREBY CERTIFY:
That the following resolutions were duly adopted by the Board of
Directors of the Corporation (the "Board of Directors") at a meeting duly
convened and held on March 29, 1999, pursuant to authority conferred upon the
Board of Directors by the provisions of the Certificate of Incorporation of the
Corporation that authorize the issuance of up to 2,500 shares of preferred stock
(the "Preferred Stock"):
"BE IT RESOLVED, that the issuance of a series of Preferred
Stock of Sierra Well Service, Inc. (the "Corporation") is hereby
authorized, and the designation, voting powers, preferences and
relative, participating, optional and other special rights, and
qualifications, limitations and restrictions thereof, of the shares of
such series, in addition to those set forth in the Certificate of
Incorporation of the Corporation, are hereby fixed as follows.
SECTION 1. DESIGNATION. The distinctive serial designation of such
series shall be "Series B Convertible Preferred Stock" (hereinafter called
"Series B"). Each share of Series B shall have a par value of $1 per share and
shall be identical in all respects with all other shares of Series B.
SECTION 2. RANK. All shares of the Series B shall rank (i) prior to the
Corporation's Common Stock; (ii) junior to the Corporation's Series A Cumulative
Preferred Stock (the "Series A"); and (iii) except as specifically provided
herein, prior to any class or series of capital stock of the Corporation
hereafter created (unless, with the consent of a majority of the holders of
Series B and all other series of the Preferred Stock obtained in accordance with
Section 9(b) hereof, such class or series of capital stock specifically, by its
terms, ranks senior to or pari passu with the Series B).
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SECTION 3. NUMBER OF SHARES. The number of shares of Series B shall
initially be 1,000, which number may from time to time be decreased (but not
below the number of shares of Series B then outstanding) by the Board of
Directors. Shares of Series B that are converted into Common Stock shall be
canceled and shall revert to authorized but unissued shares of Preferred Stock
undesignated as to series.
SECTION 4. DEFINITIONS. As used herein with respect to Series B, the
following terms shall have the following meanings:
a. The term "junior stock" shall mean the Common Stock and any
other class or series of capital stock of the Corporation hereafter
authorized over which Series B has preference or priority in the
payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation.
b. The term "parity stock" shall mean any other class or
series of stock of the Corporation hereafter authorized which ranks on
a parity with Series B in the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of
the Corporation.
c. The term "business day" shall mean each Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in New
York, New York are not authorized or obligated by law, regulation or
executive order to close.
SECTION 5. DIVIDENDS. The holders of record, as of the record date
therefor or, if there is no such record date, as of the date of payment thereof,
of shares of Series B shall be entitled to receive, when, as and if declared by
the Board of Directors of the Corporation, out of funds legally available
therefor, any dividends payable on the Common Stock, as and when paid, in an
amount equal to the amount each such holder would have received if such holder's
shares of Series B had been converted into Common Stock pursuant to Section 8
immediately prior to the record date or, if there is no such record date, on the
date of payment thereof. Except as provided in this Section 5, holders of shares
of Series B shall not be entitled to any dividends unless authorized by
unanimous vote of the Board of Directors.
SECTION 6. LIQUIDATION RIGHTS. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation (an "event of
liquidation"), the holders of the outstanding shares of Series B shall be deemed
to have elected, immediately prior to such event of liquidation, to convert
their shares of Series B into Common Stock pursuant to Section 8 hereof;
provided, however, that each holder of Series B shall have the right upon an
event of liquidation to elect in writing to receive the liquidation preference
(as hereinafter defined) with respect to its shares of Series B in lieu of
converting such shares into Common Stock. Upon an event of liquidation, before
any distribution
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or payment out of the assets of the Corporation shall be made to or set aside
for the holders of any junior stock, the holders of shares of Series B who have
elected to receive the liquidation preference shall be entitled to receive in
full an amount equal to $1.00 per share (which amount is referred to herein as
the "liquidation preference"). In determining whether a distribution (other than
upon voluntary or involuntary liquidation), by dividend, redemption or other
acquisition of shares or otherwise, is permitted under the Delaware General
Corporation Law, amounts that would be needed, if the Corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of holders of shares of Series B whose preferential rights upon
dissolution are superior to those receiving the distribution shall not be added
to the Corporation's total liabilities. If the assets of the Corporation are not
sufficient to pay such amount in full to all holders of shares of Series B and
any parity stock, the amounts paid to holders of shares of Series B and holders
of all parity stock shall be pro rata in accordance with the respective
aggregate liquidation preferences of Series B and all such parity stock.
If such amount shall have been paid in full to all holders of shares of
Series B, the remaining assets of the Corporation shall be distributed among the
holders of junior stock, according to their respective rights and preferences
and in each case according to their respective numbers of shares. For the
purposes of this Section 6, the consolidation or merger of the Corporation with
any other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
SECTION 7. REDEMPTION.. The Corporation shall not be entitled to redeem
shares of Series B at any time.
SECTION 8. CONVERSION RIGHTS. Each holder of shares of Series B shall
have the right, at such holder's option, to convert any or all of such holder's
shares of Series B into shares of Common Stock of the Corporation at any time on
and subject to the following terms and conditions.
a. The shares of Series B shall be convertible at the
principal office of the Corporation, and at such other office or
offices, if any, as the Board of Directors may designate, into fully
paid and non-assessable shares (calculated as to each conversion to the
nearest 1/100th of a share) of Common Stock of the Corporation, at the
ratio (herein called the "conversion amount") of:
(i) 0.025% of the total number of then outstanding
shares of Common Stock (calculated on a fully
diluted basis) per share of Series B; or
(ii) 0.030% of the total number of then outstanding
shares of Common Stock (calculated on a fully
diluted basis) per share of Series B, if
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Series A is redeemed in full by the Corporation on a
date that was after December 31, 1999 but before
July 1, 2000; or
(iii) 0.035% of the total number of then outstanding
shares of Common Stock (calculated on a fully
diluted basis, as defined below) per share of Series
B, if, as of July 1, 2000, one or more shares of the
Corporation's Series A remain outstanding.
Upon each conversion of Series B, the holder thereof shall be entitled
to receive, in addition to the shares of Common Stock or other capital
stock issuable upon such conversion, all dividends accrued to the date
of conversion on the shares of Series B being converted. The term
"fully diluted" shall mean the total number of shares of Common Stock
outstanding assuming the exercise of all outstanding warrants, stock
options or similar rights to acquire shares of Common Stock and the
conversion of all evidences of indebtedness, shares (other than Common
Stock) and other securities convertible into or exchangeable for shares
of Common Stock; provided, the total number of shares of Common Stock
outstanding shall not include any shares thereof then directly or
indirectly owned or held by or for the account of the Corporation or
its subsidiaries.
b. In order to convert shares of Series B into Common Stock
the holder thereof shall surrender at the office or offices hereinabove
mentioned the certificate or certificates therefor, duly endorsed or
assigned to the Corporation or in blank, and give written notice to the
Corporation at said office or offices that such holder elects to
convert such shares. Except for the payment by the Corporation of
accrued dividends pursuant to paragraph (a) above, no payment or
adjustment shall be made upon any conversion on account of any unpaid
or accrued dividends on the shares or Series B surrendered for
conversion or on account of any dividends on the Common Stock issued
upon conversion. Shares of Series B shall be deemed to have been
converted immediately prior to the close of business on the day of the
surrender of the certificates for such shares for conversion in
accordance with the foregoing provisions, and the person or persons
entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of
such Common Stock at such time. As promptly as practicable on or after
the conversion date, the Corporation shall issue and deliver at such
office a certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with payment in
lieu of any fraction of a share, as hereinafter provided, to the person
or persons entitled to receive the same.
c. No fractional shares of Common Stock shall be issued upon
conversion of shares of Series B, but, instead of any fraction of a
share which would otherwise be issuable, the Corporation shall pay cash
in respect of such fraction in an amount equal to the same
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fraction of the Closing Price on the date on which the certificate or
certificates for such shares were duly surrendered for conversion, or,
if such date is not a Trading Day, on the next Trading Day.
d. The number and kind of shares of capital stock of the
Corporation issuable on conversion shall be adjusted from time to time
as follows:
i. In case the Corporation shall issue by
reclassification of its outstanding Common Stock (whether
pursuant to a merger or consolidation or otherwise) any other
shares of capital stock of the Corporation, the holder of any
shares of Series B surrendered for conversion after the record
date fixed by the Board of Directors for such reclassification
shall be entitled to receive the aggregate number and kind of
shares of capital stock of the Corporation which, if such
shares of Series B had been converted immediately prior to
such record date, such holder would have been entitled to
receive by virtue of such reclassification.
ii. In case of any consolidation or merger of the
Corporation with or into another corporation or entity (other
than a merger with another corporation in which the
Corporation is the surviving corporation and which does not
result in any reclassification or change in the Common Stock
issuable upon conversion of shares of Series B), or in the
case of a statutory share exchange in which all shares of
Common Stock are exchanged for shares of another corporation
or entity, the holders of shares of Series B shall have, and
the Corporation or such successor entity or purchaser shall
covenant in the constituent documents effecting any of the
foregoing transactions that the holders of shares of Series B
shall have, the right to obtain upon conversion of shares of
Series B, in lieu of each share of Common Stock theretofore
issuable upon exercise of the conversion rights set forth
herein, the kind and amount of shares of stock, other
securities, money and property receivable upon such
consolidation or merger or share exchange by a holder of one
share of Common Stock issuable upon exercise of the conversion
rights set forth herein as if they had been exercised
immediately prior to such consolidation or merger or share
exchange. The constituent documents effecting any such
consolidation or merger or share exchange shall provide for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this paragraph. The
provisions of this paragraph shall apply similarly to
successive consolidations or mergers or shares exchanges.
e. In case:
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i. of any reclassification of the capital stock of
the Corporation (other than a subdivision or combination of
its outstanding shares of Common Stock), or of any
consolidation or merger to which the Corporation is a party
and for which approval of any stockholders of the Corporation
is required, or of the sale, transfer or other disposition of
all or substantially all of the assets of the Corporation; or
ii. of the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
then the Corporation shall cause to be filed with each transfer agent for the
shares of Series B (or, if no transfer agent, shall keep on file at its offices)
and shall cause to be mailed to the holders of record of the outstanding shares
of Series B, at least 20 days prior to the applicable record or effective date
hereinafter specified, a notice stating the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of record of Common Stock shall be entitled to exchange
their shares for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up. Failure to give notice as required by
this subsection (e), or any defect therein, shall not affect the validity of any
such dividend, distribution, right, warrant, reclassification, consolidation,
merger, sale, transfer, disposition, liquidation, dissolution or winding up, or
the vote on any action authorizing such.
f. The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued Common Stock, for the purpose of issuance upon conversion of
shares of Series B, the full number of shares of Common Stock then
deliverable upon the conversion of all shares of Series B then
outstanding.
g. The Corporation shall pay any and all transfer taxes that
may be payable in respect of the issuance or delivery of shares of
Common Stock on conversion of shares of Series B pursuant hereto, other
than any tax in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which
the shares of Series B so converted were registered. No such issuance
or delivery in a name other than that in which the shares of Series B
were registered shall be made unless and until the person requesting
such issuance or delivery has paid to the Corporation the amount of any
such tax or has established to the satisfaction of the Corporation that
such tax has been paid.
h. For the purpose of this Section 8, the term "Common Stock"
shall mean the class of stock of the Corporation which, as of the first
date of issuance of shares of Series B, has no preference or priority
in the payment of dividends or in the distribution of assets in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the
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Corporation and which is not subject to redemption by the Corporation
and shares of the Corporation of any classes or series resulting from
any reclassification or reclassifications thereof.
i. As used in this Section 8, the term "Closing Price" on any
day shall mean the reported last sale price per share of Common Stock
regular way on such day or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices regular
way, in each case on the New York Stock Exchange, or if the Common
Stock is not listed or admitted to trading on such Exchange, on the
American Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading, or, if the Common Stock is not listed or admitted to trading
on any national securities exchange, the average of the closing bid and
asked prices in the over-the-counter market as reported by the National
Association of Securities Dealers' Automated Quotation System, or, if
not so reported, as reported by the National Quotation Bureau,
Incorporated, or any successor thereof, or, if not so reported, the
average of the closing bid and asked prices as furnished by any member
of the National Association Securities Dealers, Inc. selected from time
to time by the Corporation for that purpose, or, if such prices are
unavailable, the fair market value per share of Common Stock on the
applicable date as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board resolution ,
provided that in the event the Corporation's stockholders have approved
an incentive stock option plan, such determination shall be made by the
Board of Directors in accordance with such plan and such determination
shall be final and conclusive. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which the Common
Stock is listed or admitted to trading is open for the transaction of
business or, if the Common Stock is not listed or admitted to trading
on any national securities exchange, a business day.
SECTION 9. VOTING RIGHTS.
a. The holders of Series B shall vote together with the
holders of Common Stock (and of any other class or series which may
similarly be entitled to vote with the holders of Common Stock) as a
single class on all matters on which holders of Common Stock are
entitled to vote. Each share of Series B shall entitle its holder to
cast a number of votes equal to the number of votes that could be cast
by a holder of 0.035% of the total number of then outstanding shares of
Common Stock (calculated on a fully diluted basis) as of the record
date for such vote, or if there is no record date for the vote, on the
date such vote is taken.
b. Upon the written request of holders of a majority of the
outstanding shares of Series B addressed to the Secretary of the
Corporation at the principal office of the Corporation, the Secretary
of the Corporation shall call a special meeting of the Series B
stockholders. Such meeting shall be held within thirty (30) days after
delivery of such request to the Secretary, at the place and upon the
notice provided by law and in the bylaws of the Corporation, as then in
effect, for the holding stockholder meetings.
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c. Any action required or permitted to be taken by the Series
B stockholders at any stockholder meeting, whether annual or special,
may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding shares of Series B having not
less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting.
d. So long as any shares of Series B are outstanding, in
addition to any other vote or consent of stockholders required by law
or by the certificate of incorporation, the vote or consent of the
holders of a majority of the shares of Series B and all other series of
the Preferred Stock similarly entitled to vote upon the matters
specified in this paragraph at the time outstanding, voting separately
as a single class regardless of series, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called
for the purpose, shall be necessary for effecting or validating:
i. any amendment, alteration or repeal (including by
merger or consolidation) of any of the provisions of the terms of the
Series B or any other amendment, alteration or repeal of any provisions
of the certificate of incorporation or of the by-laws of the
Corporation;
ii. the authorization or creation of, or increase in
the authorized amount of, any shares of any class or series or any
security convertible into shares of any class or series of capital
stock of the Corporation ranking prior to or on a parity with Series B
in the payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation; or
iii. any (x) merger or consolidation of the
Corporation with or into any other corporation, unless the Corporation
shall be the surviving or resulting corporation and the shares of
Series B remain outstanding immediately upon completion of such merger
or consolidation or (y) sale of all or substantially all of the
Corporation's assets; or
iv. any issuance of shares of Series B other than
pursuant to Section 5(a).
SECTION 10. OTHER RIGHTS. The shares of Series B shall not have any
voting powers, preferences or relative, participating, optional or other special
rights, or qualifications, limitations or restrictions thereof, other than as
set forth herein or in the Certificate of Incorporation of the Corporation.
SECTION 11. RESTATEMENT OF CERTIFICATE. Upon any restatement of the
Certificate of Incorporation of the Corporation, Sections 1 through 10 of this
Certificate of Designations shall be included in the Certificate of
Incorporation under the heading "Series B Cumulative Convertible Preferred
Stock" and this Section 11 may be omitted. If the Board of Directors so
determines, the numbering of Sections 1 through 10 may be changed for
convenience of reference or for any other proper purpose."
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[SIGNATURE PAGE - SERIES B PREFERRED CERTIFICATE OF DESIGNATIONS]
IN WITNESS WHEREOF, Sierra Well Service, Inc. has caused this
certificate to be signed by Bill E. Coggin, its Vice Chairman, this
31st day of March, 1999.
SIERRA WELL SERVICE, INC.,
A Delaware corporation
By: /s/ Bill E. Coggin
-------------------------------------
Name: Bill E. Coggin
Title: Vice Chairman