EXHIBIT 3.1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:00 AM 03/29/1994
344051804 - 2390003
CERTIFICATE OF INCORPORATION
OF
CALLON PETROLEUM HOLDING COMPANY
ARTICLE ONE
The name of the Corporation is Callon Petroleum Holding Company.
ARTICLE TWO
The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware, 19801,
and the name of its registered agent at such address is The Corporation Trust
Company.
ARTICLE THREE
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware ("Act"),
ARTICLE FOUR
The Corporation shall have authority to issue two classes of stock, and
the total number authorized shall be one (1) share of Common Stock of the par
value of one cent ($.01) each, and one (1) share of Preferred Stock of the par
value of one cent ($.01) each. A description of the different classes of stock
of the Corporation and a statement of the designations and the powers,
preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of each class of such stock are as follows:
1. ISSUANCE IN CLASS OR SERIES. The Common Stock or
Preferred Stock may be issued from time to time in one or more series,
or either or both of the Common and Preferred Stock may be divided into
additional classes and such classes into one or more series. The terms
of a class or series, including all rights and preferences, shall be as
specified in the resolution or resolutions adopted by the Board of
Directors designating such class or series which resolution or
resolutions the Board of Directors is hereby expressly authorized to
adopt. Such resolution or resolutions with respect to a class or series
shall specify all or such of the rights or preferences of such class or
series as the Board of Directors shall determine, including, without
limitation, any or all of the following, if applicable: (a) the number
of shares to constitute such class or series and the distinctive
designation thereof; (b) the dividend or manner for determining the
dividend payable with respect to the shares of such class or series and
the date or dates from which dividends shall accrue, whether such
dividends shall be cumulative, and, if cumulative, the date or dates
from which dividends shall accumulate and whether the shares in such
class or series shall be entitled to preference or priority over any
other class or series of stock of the Corporation with respect to
payment of dividends; (c) the terms and conditions, including price or
a manner for determining the price, of redemption, if any, of the
shares of such class or series; (d) the terms and conditions of a
retirement or sinking fund, if any, for the purchase or redemption of
the shares of such class or series; (e) the amount which the shares of
such class or series shall be entitled to receive, if any, in the event
of any liquidation, dissolution or winding up of the Corporation and
whether such shares shall be entitled to a preference
or priority over shares of another class or series with respect to
amounts received in connection with any liquidation, dissolution or
winding up of the Corporation; (f) whether the shares of such class or
series shall be convertible into, or exchangeable for, shares of stock
of any other class or classes, or any other series of the same or any
other class or classes of stock, of the Corporation and the terms and
conditions of any such conversion or exchange; (g) the voting rights,
if any, of shares of stock of such class or series in addition to those
granted herein, if any; (h) the status as to reissuance or sale of
shares of such class or series redeemed, purchased or otherwise
reacquired or surrendered to the Corporation on conversion; (i) the
conditions and restrictions, if any, on the payment of dividends or on
the making of other distributions on, or the purchase, redemption or
other acquisition by the Corporation or any subsidiary, of any other
class or series of stock of the Corporation ranking junior to such
shares as to dividends or upon liquidation; (j) the conditions, if any,
on the creation of indebtedness of the Corporation, or any subsidiary,
and (k) such other preferences, rights, restrictions and qualifications
as the Board of Directors may determine.
All shares of the Common Stock shall rank equally and all
shares of the Preferred Stock shall rank equally, and be identical
within their classes in all respects regardless of series, except as to
terms which may be specified by the Board of Directors pursuant to the
above provisions. All shares of any one series of a class of Common
Stock or Preferred Stock shall be of equal rank and identical in all
respects, except that shares of any one series issued at different
times may differ as to the dates which dividends thereon shall accrue
and be cumulative.
2. OTHER PROVISIONS. Shares of Common Stock or Preferred
Stock of any class or series may be issued with such voting powers,
full or limited, or no voting powers, and such designations,
preferences and relative participating, option or special rights, and
qualifications, limitations or restrictions thereof, as shall be stated
and expressed in the resolution or resolutions providing for the
issuance of such stock adopted by the Board of Directors. Any of the
voting powers, designations, preferences, rights and qualifications,
limitations or restrictions of any such class or series of stock may be
made dependent upon facts ascertainable outside the resolution or
resolutions of the Board of Directors providing for the issue of such
stock by the Board of Directors, provided the manner in which such
facts shall operate upon the voting powers, designations, preferences,
rights and qualifications, limitations or restrictions of such class or
series is clearly set forth in the resolution or resolutions providing
for the issue of such stock adopted by the Board of Directors.
3. COMMON STOCK. Except as otherwise provided in any
resolution or resolutions adopted by the Board of Directors providing
for the issuance of a class or series of Preferred Stock or Common
Stock, the Common Stock shall (a) have the exclusive voting power of
the corporation; (b) entitle the holders thereof to one vote per share
at all meetings of the stockholders of the Corporation; (c) entitle the
holders to share ratably, without preference over any other shares of
the Corporation, in all assets of the Corporation in the event of any
dissolution, liquidation or winding up of the Corporation; and (d)
entitle the record holders thereof on such record dates as are
determined, from time to time, by the Board of Directors to receive
such dividends, if any, if, as and when declared by the Board of
Directors.
ARTICLE FIVE
The Corporation is to have perpetual existence.
- 2 -
ARTICLE SIX
1. NUMBER, ELECTION AND TERM OF DIRECTORS. The business
and affairs of the Corporation shall be managed by a Board of
Directors, which, subject to the rights of holders of shares of any
class of series of Preferred Stock of the Corporation then outstanding
to elect additional directors under specified circumstances, shall
consist of not less than three nor more than twenty-one persons. The
exact number of directors within the minimum and maximum limitations
specified in the preceding sentence shall be fixed from time to time by
either (i) the Board of Directors pursuant to a resolution adopted by a
majority of the entire Board of Directors or (ii) the affirmative vote
of the holders of 80% or more of the voting power of all of the shares
of the Corporation entitled to vote generally in the election of
directors voting together as a single class. No decrease in the number
of directors constituting the Board of Directors shall shorten the term
of any incumbent director. The directors shall be divided into three
classes as nearly equal in number as possible, with the term of office
of the first class to expire at the 1995 annual meeting of
stockholders, the term of office of the second class to expire at the
1996 annual meeting of stockholders, and the term of office of the
third class to expire at the 1997 annual meeting of stockholders, and
with the members of each class to hold office until their successors
shall have been elected and qualified At each annual meeting of
stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding
annual meeting of stockholders after their election.
2. STOCKHOLDER NOMINATION OF DIRECTOR CANDIDATES.
Advance notice of stockholder nominations for the election of directors
shall be submitted to the Board of Directors at least 120 days in
advance of the scheduled date for the next annual meeting of
stockholders.
3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Subject to
the rights of the holders of any series of any Preferred Stock then
outstanding, newly created directorships resulting from any increase in
the authorized number of directors and any vacancies in the Board of
Directors resulting from the death, resignation, retirement,
disqualification, removal from office or other cause may be filled by a
majority vote of the directors then in office even though less than a
quorum, or by a sole remaining director.
4. REMOVAL. Subject to the rights of the holders of any
series of any Preferred Stock then outstanding, any director or the
entire Board of Directors, may be removed from office at any annual or
special meeting called for such purpose, and then only for cause and
only by the affirmative vote of the holders of 80% or more of the
voting power of all of the shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single
class. As used herein, cause shall mean only the following: conviction
of a felony or proof, beyond the existence of a reasonable doubt, that
a director has committed grossly negligent or wilful misconduct
resulting in a material detriment to the Corporation or committed a
material breach of his fiduciary duty to the Corporation resulting in a
material detriment to the Corporation.
5. AMENDMENT, REPEAT, ETC. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of 80% or more of the voting power of
all of the shares of the Corporation entitled to vote generally in the
election of directors, voting together as a single class, shall be
required to alter, amend or adopt any provision inconsistent with or
repeal this Article Six, or to alter, amend, adopt any provision
inconsistent with or repeal comparable sections of the Bylaws of the
Corporation.
- 3 -
ARTICLE SEVEN
Subject to the rights of the holders of any series of Preferred Shares
then outstanding, Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders unless all of the stockholders
entitled to vote thereon consent thereto in writing. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the affirmative
vote of the holders of 80% or more of the voting power of all the shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to call a special meeting of
stockholders or to alter, amend or adopt any provision inconsistent with or
repeal this Article Seven, or to alter, amend or adopt any provision
inconsistent with comparable sections of the Bylaws.
ARTICLE EIGHT
The Corporation shall have the power to indemnify its present or former
directors, officers, employees and agents or any person who served or is serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise to
the fun extent permitted by the General Corporation Law of Delaware. Such
indemnification shall not be deemed exclusive of any other rights to which such
person may be entitled, under any Bylaws, agreements, vote of stockholders or
disinterested directors, or otherwise.
ARTICLE NINE
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages or breach of fiduciary duty
as a director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (if) for acts or omissions not
in good faith or which involved intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Act, or, (iv) for any transaction from which
the director derived an improper personal benefit.
ARTICLE TEN
In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, alter or repeal
the Bylaws of the corporation.
ARTICLE ELEVEN
The name and address of the incorporator is as follows:
George G. Young III
Butler & Binion
1700 First Interstate Bank Plaza
Houston, Texas 77002
In Witness Whereof, this certificate of incorporation was executed by
the above named individual on this 28th day of March, 1994.
/s/ George G. Young III
--------------------------------
George G. Young III
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 08/04/1994
944145890 - 2390003
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Callon Petroleum Holding Company, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by the
unanimous written consent of its members, filed with the minutes of the Board,
adopted a resolution proposing and declaring advisable the following amendment
to the Certificate of Incorporation of the Corporation:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by chanting Section 1. of the Article thereof
numbered "SIX" so that, as amended, Section 1. of said Article shall be
and read as follow:
"ARTICLE SIX
1. NUMBER, ELECTION AND TERM OF DIRECTORS. The business
and affairs of the Corporation shall be managed by a Board of
Directors, which, subject to the rights of holders of shares of any
class or series of Preferred Stock of the Corporation then outstanding
to elect additional directors under specified circumstances, shall
consist of no more than twenty-one person. The number of initial
directors shall be two. Thereafter, the exact number of director
within the maximum limitations as specified above shall be fixed from
time to time by either (i) the Board of Directors pursuant to a
resolution adopted by a majority of the entire Board of Directors or
(ii) the affirmative vote of the holders of 80% or more of the voting
power of all of the shares of the Corporation entitled to vote
generally in the election of directors voting together as a single
class. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director. The
directors shall be divided into three classes as nearly equal in number
as possible, with the term of office of the first class to expire at
the first annual meeting of stockholders following their election, the
term of office of the second class to expire at the second annual
meeting of stockholders following their election, and the term of
office of the third class to expire at the third annual meeting of
stockholders following their election, and with the members of each
class to hold office until their successors shall have been elected and
qualified. At each annual meeting of stockholders following such
initial classification and election, directors elected to succeed those
directors whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders after
their election. Notwithstanding the foregoing, the above provisions
regarding classification of directors shall be applicable only in the
event that the Board of Directors is composed of three or more
directors. Election of directors need not be by written ballot, except
as otherwise provided in the Bylaws."
SECOND: That in lieu of a meeting and vote of stockholders,
the sole stockholder of the Corporation has given its written consent to the
amendment in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the amendment was duly adopted in accordance with
the applicable provisions in Sections 242 and 228 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by Fred L. Callon, its President, and attested by H.
Michael Tatum, Jr., its Secretary, this 2nd day of August, 1994.
CALLON PETROLEUM HOLDING COMPANY
By /s/ Fred L. Callon
-----------------------------
Fred L. Callon, President
ATTEST
/s/ H. Michael Tatum Jr.
- --------------------------------
H. Michael Tatum Jr., Secretary
- 2 -
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 09/16/1994
944174625 - 2390003
CERTIFICATE OF MERGER
OF
CALLON CONSOLIDATED PARTNERS, L.P.
(a Delaware limited partnership)
with and into
CALLON PETROLEUM HOLDING COMPANY
(a Delaware corporation)
Callon Consolidated Partners, L.P., a Delaware limited partnership, for
the purpose of merging with Callon Petroleum Holding Company, a Delaware
corporation, hereby certifies as follows:
1. The name and jurisdiction of formation or organization of each
of the constituent entities are:
Name Jurisdiction
Callon Petroleum Holding Company Delaware
Callon Consolidated Partners, L.P. Delaware
2. An agreement and plan of consolidation has been approved,
adopted, certified, executed and acknowledged by each of the
constituent entities in accordance with section 263 of the
Delaware General Corporation Law.
3. The name of the surviving corporation is Callon Petroleum
Holding Company, which shall herewith be changed to Callon
Petroleum Company.
4. The amendments or changes in the Certificate of Incorporation
of the surviving corporation are as follows:
(i) Article One is amended and replaced in its entirety
with the following Article One:
"ARTICLE ONE
The name of the Corporation is Callon Petroleum
Company."
(ii) The first sentence of Article Four is amended and
replaced in its entirety with the following sentence:
"The Corporation shall have authority to issue two
classes of stock, and the total number authorized
shall be 20,000,000 shares of Common Stock of the par
value of one cent ($.01) each, and 2,500,000 shares
of Preferred Stock of the par value of one cent
($.01) each."
5. The executed agreement and plan of consolidation is
on file at the principal place of business of the
surviving corporation, the address of which is:
Callon Petroleum Holding Company
200 North Canal Street
Natchez, Mississippi 39120
6. A copy of the agreement and plan of consolidation
will be furnished by Callon Petroleum Holding
Company, on request and without cost, to any partner
or stockholder of a constituent entity.
IN WITNESS WHEREOF, this Certificate of Merger has been duly
executed as of the 16th day of September 1994, and is being filed by Callon
Petroleum Holding Company, the surviving corporation.
CALLON PETROLEUM HOLDING COMPANY
By: /s/ FRED L. CALLON
----------------------------------
FRED L. CALLON, President
Attest:
/s/ H. Michael Tatum, Jr.
- ---------------------------
H. Michael Tatum, Jr., Secretary
- 2 -
AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
CALLON PETROLEUM COMPANY
The undersigned, Robert A. Mayfield, Corporate Secretary of Callon
Petroleum Company, a corporation organized and existing under the laws of the
State of Delaware (the "CORPORATION"), does hereby certify as follows:
FIRST: The name of the Corporation is Callon Petroleum Company
SECOND: This Amendment (the "AMENDMENT") to the Certificate of
Incorporation of the Corporation (the "CERTIFICATE") was duly adopted in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law. The Board of Directors has duly adopted resolutions setting
forth and declaring advisable this Amendment and the holders of a majority of
the outstanding stock of the Corporation entitled to vote at the special meeting
of the stockholders called for the purpose of voting on the Amendment have voted
in favor of this Amendment.
THIRD: The Certificate is hereby amended by amending and restating
the first sentence of Article Four to be and read as follows:
"The Corporation shall have authority to issue two classes of stock,
and the total number authorized shall be 30,000,000 shares of Common
Stock, par value $.01 per share, and 2,500,000 shares of Preferred
Stock, par value $.01 per share."
IN WITNESS WHEREOF, the undersigned has executed this Amendment on
behalf of the Corporation and has attested such execution and does verify and
affirm, under penalty of perjury, that this Amendment is the act and deed of
the Corporation and that the facts stated herein are true as of this 23rd day of
January, 2004.
CALLON PETROLEUM COMPANY
By: /s/ Robert A. Mayfield
------------------------------
Robert A. Mayfield, Corporate Secretary
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 11/22/1995
950272690 - 2390003
CERTIFICATE OF DESIGNATIONS
CALLON PETROLEUM COMPANY
$2.125 CONVERTIBLE EXCHANGEABLE
PREFERRED STOCK, SERIES A
Callon Petroleum Company, a corporation organized and existing under
and by virtue of The General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
That the following resolutions, establishing and designating a series
of shares and fixing and determining the designations, preferences, limitations
and relative rights thereof, were duly adopted by the Board of Directors of the
Corporation or an authorized committee thereof on November 21, 1995.
RESOLVED, that pursuant to Article Four of the Certificate of
Incorporation of the Corporation, as amended, which authorizes the
issuance of 22,500,000 shares of capital stock ("Stock"), consisting of
2,500,000 shares of Preferred Stock of the par value of $.01 per share,
none of which is currently outstanding, and 20,000,000 shares of Common
Stock of the par value of $.01 per share (the "Common Stock"), the
Corporation hereby provides for the issuance of a series of Preferred
Stock, designated as $2.125 Convertible Exchangeable Preferred Stock,
Series A, and hereby fixes the designations, preferences, limitations
and relative rights of the shares of the $2.125 Convertible
Exchangeable Preferred Stock, Series A, in addition to those set forth
in such Article Four, which shall be as follows:
SECTION 1. DESIGNATION; NUMBER OF SHARES. The shares of the series
authorized by this resolution shall be designated as "$2.125 Convertible
Exchangeable Preferred Stock, Series A" (the "Convertible Preferred Stock"). The
number of shares initially constituting such series shall be limited to one
million three hundred eighty thousand (1,380,000). Such number of shares may be
decreased, at any time and from time to time, by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the number of shares
of Convertible Preferred Stock to a number less than the number of shares then
outstanding. The liquidation value of the Convertible Preferred Stock shall be
$25.00 per share.
SECTION 2. DIVIDENDS.
(a) AMOUNT. The holders of Convertible Preferred Stock shall be
entitled to receive, when and if declared by the Board of Directors, out of
funds legally available for the payment of dividends, cash dividends at the rate
of $2.125 per share per annum, and no more, payable in equal quarterly payments
on January 15, April 15, July 15, and October 15 in each year, commencing
January 15, 1996, except that if such date is not a business day then such
dividend shall be payable on the next succeeding business day (the "Dividend
Payment Date" or "Dividend Payment Dates") (as used herein, the term "business
day" shall mean any day except a Saturday, Sunday or day on which banking
institutions are authorized or required by law to close in New York City or in
the City of Natchez, Mississippi). Such dividends shall be cumulative (whether
or not declared) and shall accrue, without interest, from the first day in which
such dividend may be payable as provided herein, except that with respect to the
first quarterly dividend, such dividend shall accrue from the date of issuance
of such shares of Convertible Preferred Stock. Dividends shall be payable to
holders of record as they appear on the share transfer records of the
Corporation on such record dates as may be fixed by the Board of Directors, not
more than 60 days nor less than 10 days preceding such Dividend Payment Date.
Dividends in arrears may be declared and paid at any time, without reference to
any regular Dividend Payment Date, to holders of record on such date, not more
than 60 days preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. The amount of dividends payable on shares of
Convertible Preferred Stock for each full quarterly dividend period shall be
computed by dividing by four the annual rate per share set forth in this
subsection (a). Dividends payable on the Convertible Preferred Stock for the
initial dividend period and for any period less than a full quarterly period
shall be computed on the basis of a 360-day year of twelve 30-day months.
(b) PRIORITY. If dividends upon any shares of Convertible
Preferred Stock, or any other outstanding class or series of stock of the
Corporation ranking on a parity with the Convertible Preferred Stock as to
dividends, are in arrears, all dividends or other distributions declared upon
each class or series of such stock (other than dividends paid in stock of the
Corporation ranking junior to the Convertible Preferred Stock as to dividends
and upon liquidation, dissolution or winding up) may only be declared pro rata
so that in all cases the amount of dividends or other distributions declared per
share on the Convertible Preferred Stock and such class or series bear to each
other the same ratio that the accrued and unpaid dividends per share on the
shares of the Convertible Preferred Stock and such class or series bear to each
other. Except as set forth above, if dividends upon any shares of Convertible
Preferred Stock, or any other outstanding stock of the Corporation ranking on a
parity with the Convertible Preferred Stock a$ to dividends, are in arrears: (i)
no dividends (in cash, stock or other property) may be paid, declared or set
aside for payment or any other distribution made on any stock of the Corporation
ranking junior to the Convertible Preferred Stock as to dividends (other than
dividends or distributions in stock of the Corporation ranking junior to the
Convertible Preferred Stock as to dividends and upon liquidation, dissolution or
winding up) and upon liquidation, dissolution or winding up; and (ii) DO stock
of the Corporation ranking junior to or on a parity with the Convertible
Preferred Stock as to dividends and upon liquidation, dissolution and winding up
may be redeemed, purchased or otherwise acquired pursuant to a sinking fund or
otherwise, except by conversion of such stock into, or exchange of such stock
for, stock of the Corporation ranking junior to the Convertible Preferred Stock
as to dividends and upon liquidation, dissolution or winding up.
-2-
(c) NO INTEREST. No interest, sum of money in lieu of interest, or
other property or securities shall be payable in respect of any dividend payment
or payments which are accrued but unpaid. Dividends paid on shares of
Convertible Preferred Stock in an amount less than the total amount of such
dividends at the time accumulated and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.
SECTION 3. CONVERSION PRIVILEGE.
(a) RIGHT OF CONVERSION. Each share of Convertible Preferred Stock
shall be convertible at the option of the holder thereof at any time prior to
the close of business on the fifth business day prior to the date fixed for
redemption of such share as herein provided, into fully paid and nonassessable
shares of Common Stock, at a rate per full share of Convertible Preferred Stock
determined by dividing $25.00 by the conversion price per share of Common Stock
in effect on the date such share is surrendered for conversion, or into such
additional or other securities, cash or property and at such other rates as
required in accordance with the provisions of this Section 3. For purposes of
this resolution, the "conversion price" per share of Common Stock shall
initially be $11.00 and shall be adjusted from time to time in accordance with
the provisions of this Section 3. Each share of Convertible Preferred Stock may
be converted in whole or in part.
(b) CONVERSION PROCEDURES. Any holder of shares of Convertible
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates evidencing such shares of Convertible
Preferred Stock at the office of the transfer agent for the Convertible
Preferred Stock, which certificate or certificates, if the Corporation shall so
require, shall be duly endorsed to the Corporation or in blank, or accompanied
by proper instruments of transfer to the Corporation or in blank, accompanied by
irrevocable written notice to the Corporation that the holder elects to convert
such shares of Convertible Preferred Stock and specifying the name or names
(with address or addresses) in which a certificate or certificates evidencing
shares of Common Stock are to be issued.
Except as otherwise described in this paragraph, no payments or
adjustments in respect of dividends on shares of Convertible Preferred Stock
surrendered for conversion, whether paid or unpaid and whether or not in
arrears, or on account of any dividend on the Common Stock issued upon
conversion shall be made by the Corporation upon the conversion of any shares of
Convertible Preferred Stock. The holder of record of shares of Convertible
Preferred Stock on a dividend record date who surrenders such shares for
conversion during the period between such dividend record date and the
corresponding dividend payment date will be entitled to receive the dividend on
such dividend payment date notwithstanding the conversion of such shares;
provided, however, that unless such shares, prior to such surrender, had been
called for redemption on a redemption date
-3-
during the period between such dividend record date and the date after such
dividend payment date, such shares must be accompanied, upon surrender for
conversion, by payment from the holder to the Corporation of an amount equal to
the dividend payable on such shares on that dividend payment date.
The Corporation shall, as soon as practicable after such surrender of
certificates evidencing shares of Convertible Preferred Stock accompanied by the
written notice and compliance with any other conditions herein contained,
deliver at such office of such transfer agent to the person for whose account
such shares of Convertible Preferred Stock were so surrendered, or to the
nominee or nominees of such person, certificates evidencing the number of full
shares of Common Stock to which such person shall be entitled as aforesaid,
together with a cash adjustment in respect of any fraction of a share of Common
Stock as hereinafter provided. Such conversion shall be deemed to have been made
as of the date of such surrender of the shares of Convertible Preferred Stock to
be converted, and the person or persons entitled to receive the Common Stock
deliverable upon conversion of such Convertible Preferred Stock shall be treated
for all purposes as the record bolder or holders of such Common Stock on such
date.
(c) ADJUSTMENT OF CONVERSION PRICE. The conversion price at which
a share of Convertible Preferred Stock is convertible into Common Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend
or other distribution on its Common Stock exclusively in Common Stock
or shall pay or make a dividend or other distribution on any other
class or series of capital stock of the Corporation which dividend or
distribution includes Common Stock, the conversion price in effect at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of
such number of shares and the total number of shares constituting or
included in such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of
this paragraph (i), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the
Corporation. The Corporation shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the
Corporation.
(ii) In case the Corporation shall pay or make a dividend
or other distribution on its Common Stock consisting exclusively of, or
shall otherwise issue
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to all holders of its Common Stock, rights or warrants entitling the
holders thereof to subscribe for or purchase shares of Common Stock at
a price per share less than the current market price per share
(determined as provided in paragraph (vi) of this Section 3(c)) of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the conversion price in
effect at the opening of business on the day following the date fixed
for such determination shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such reduction to become
effective immediately after the opening of business on the day
following the date fixed for such determination. In case any rights or
warrants referred to in this paragraph (ii) in respect of which an
adjustment shall have been made shall expire unexercised, the
conversion price shall be readjusted at the time of such expiration to
the conversion price that would have been in effect if no adjustment
had been made on account of the distribution or issuance of such
expired rights or warrants.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and conversely, in case outstanding shares
of Common Stock shall each be combined into a smaller number of shares
of Common Stock, the conversion price in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(iv) Subject to the last sentence of this paragraph (iv),
in case the Corporation shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares
of any class or series of capital stock, cash or assets (including
securities, but excluding any rights or warrants referred to in
paragraph (ii) of this Section 3(c), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in
paragraph (i) of this Section 3(c)), the conversion price in effect on
the day following the date fixed for the payment of such distribution
(the date fixed for payment being referred to as the "Reference Date")
shall be reduced by
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multiplying such conversion price by a fraction of which the numerator
shall be the current market price per share (determined as provided in
paragraph (vi) of this Section 3(c)) of the Common Stock on the
Reference Date less the fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) on the Reference
Date of the portion of the evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common
Stock, and the denominator shall be such current market price per share
of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the Reference
Date. If the Board of Directors determines the fair market value of any
distribution for purposes of this paragraph (iv) by reference to the
actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market
over the same period used in computing the current market price per
share of Common Stock pursuant to paragraph (vi) of this Section 3(c).
For purposes of this paragraph (iv), any dividend or distribution that
includes shares of Common Stock or rights or warrants to subscribe for
or purchase shares of Common Stock shall be deemed to be (A) a dividend
or distribution of the evidences of indebtedness, cash, assets or
shares of capital stock other than such shares of Common Stock or
rights or warrants (making any conversion price reduction required by
this paragraph (iv)) immediately followed by (B) a dividend or
distribution of such shares of Common Stock or such rights or warrants
(making any further conversion price reduction required by paragraph
(i) or (ii) of this Section 3(c)), except (1) the Reference Date of
such dividend or distribution as defined in this paragraph (iv) shall
be substituted as "the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution," "the date
fixed for the determination of stockholders entitled to receive such
rights or warrants" and "the date fixed for such determination" within
the meaning of paragraphs (i) and (ii) of this Section 3(c) and (2) any
shares of Common Stock included in such dividend or distribution shall
not be deemed "outstanding at the close of business on the date fixed
for such determination" within the meaning of paragraph (i) of this
Section 3(c).
(v) In case the Corporation shall pay or make a dividend
or other distribution on its Common Stock exclusively in cash
(excluding (A) cash that is part of a distribution referred to in
paragraph (iv) above and (B) in the case of any quarterly cash dividend
on the Common Stock, the portion thereof that does not exceed the per
share amount of the next preceding quarterly cash dividend on the
Common Stock (as adjusted to appropriately reflect any of the events
referred to in paragraphs (i), (ii), (iii) and (iv) of this Section
3(c)), or all of such quarterly cash dividend if the amount thereof per
share of Common Stock multiplied by four does not exceed 15% of the
current market price per share (determined as
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provided in paragraph (vi) of this Section 3(c)) of the Common Stock on
the trading day next preceding the date of declaration of such
dividend, the conversion price in effect immediately prior to the
opening of business on the day following the date fixed for the payment
for such distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (vi) of this
Section 3(c)) of the Common Stock on the date fixed for the payment of
such distribution less the amount of cash so distributed and not
excluded as provided above applicable to one share of Common Stock, and
the denominator of which shall be such current market price per share
of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the date fixed
for the payment of such distribution.
(vi) For the purpose of any computation under paragraph
(ii), (iii), (iv) or (v) of this Section 3(c), the current market price
per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices for the five consecutive trading days
ending with and including the date in question; provided, however, that
(A) if the "ex" date (as hereinafter defined) for any event (other than
the issuance or distribution requiring such computation) that requires
an adjustment to the conversion price pursuant to paragraph (i), (ii),
(iii), (iv) or (v) above ("Other Event") occurs after the fifth trading
day prior to the date in question and prior to the "ex" date for the
issuance or distribution requiring such computation (the "Current
Event"), the closing price for each trading day prior to the "ex" date
for such Other Event shall be adjusted by multiplying such closing
price by the same fraction by which the conversion price is so required
to be adjusted as a result of such Other Event, (B) if the "ex" date
for any Other Event occurs after the "ex" date for the Current Event
and on or prior to the date in question, the closing price for each
trading day on and after the "ex" date for such Other Event shall be
adjusted by multiplying such closing price by the reciprocal of the
fraction by which the conversion price is so required to be adjusted as
a result of such Other Event, (C) if the "ex" date for any Other Event
occurs on the "ex" date for the Current Event, one of those events
shall be deemed for purposes of clauses (A) and (B) of this proviso to
have an "ex" date occurring prior to the "ex" date for the other event,
and (D) if the "ex" date for the Current Event is on or prior to the
date in question, after taking into account any adjustment required
pursuant to clause (B) of this proviso, the closing price for each
trading day on or after such "ex" date shall be adjusted by adding
thereto the amount of any cash and the fair market value on the date in
question (as determined in good faith by the Board of Directors in a
manner consistent with any determination of such value for purposes of
paragraph (iv) or (v) of this Section 3(c), whose determination shall
be conclusive and described in a resolution of the Board of Directors)
of the portion of the rights, warrants,
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evidences of indebtedness, shares of capital stock or assets being
distributed applicable to one share of Common Stock. For purposes of
this paragraph, the term "ex" date, (1) when used with respect to any
issuance 01 distribution, means the first date on which the Common
Stock trades regular way on the relevant exchange or in the relevant
market from which the closing price was obtained without the right to
receive such issuance or distribution and (2) when used with respect to
any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective.
(vii) No adjustment in the conversion price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in the conversion price; provided, however, that any
adjustments which by reason of this paragraph (vii) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment.
(viii) Whenever the conversion price is adjusted as herein
provided:
(A) the Corporation shall compute the adjusted
conversion price and shall prepare a certificate signed by a
Vice President or the Treasurer of the Corporation setting
forth the adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the transfer agent
for the Convertible Preferred Stock; and
(B) as soon as practicable after the adjustment,
the Corporation shall mail to all record holders of
Convertible Preferred Stock at their last addresses as they
shall appear in stock transfer books of the Corporation a
notice stating that the conversion price has been adjusted and
setting forth the adjusted conversion price.
(ix) The Corporation from time to time may reduce the
conversion price by any amount for any period of time if the period is
at least twenty days, the reduction is irrevocable during the period
and the Board of Directors shall have made a determination that such
reduction would be in the best interest of the Corporation, which
determination shall be conclusive. Whenever the conversion price is
reduced pursuant to the preceding sentence, the Corporation shall mail
to the record holders of Convertible Preferred Stock a notice of the
reduction at least fifteen days prior to the date the reduced
conversion price takes effect, and such notice shall state the reduced
conversion price and the period it will be in effect
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(d) NO FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the Convertible Preferred Stock. If more than
one certificate evidencing shares of Convertible Preferred Stock shall be
surrendered for conversion at such time by the holder, the number of full shares
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Convertible Preferred Stock so surrendered. Instead of any
fractional share of Common Stock that would otherwise be issuable to a holder
upon conversion of any shares of Convertible Preferred Stock, the Corporation
shall pay a cash adjustment in respect of such fractional share in an amount
equal to the same fraction of the closing price of the Common Stock on the day
of conversion or, if the day of conversion is not a trading day, on the next
preceding trading day.
(e) RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS. In
the event that the Corporation shall be a party to any transaction pursuant to
which the Common Stock is converted into the right to receive other securities,
cash or other property (including without limitation any recapitalization or
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination of the Common Stock), any consolidation of the
Corporation with, or merger of the Corporation into, any other person, any
merger or another person into the Corporation (other than a merger which does
not result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock), any sale or transfer of all or
substantially all of the assets of the Corporation or any share exchange), then
lawful provisions shall be made as part of the terms of such transaction whereby
the holder of each share of Convertible Preferred Stock then outstanding shall
have the right thereafter to convert such share only into the kind and amount of
securities, cash and other property receivable upon such transaction by a holder
of the number of shares of Common Stock into which such share might have been
converted immediately prior to such transaction provided, however, that if the
holders of Common Stock were entitled by the terms of the transaction to make an
election to receive securities, cash or property, or any combination of the
foregoing, lawful provision shall be made as part of the terms of such
transaction whereby the holder of each share of Convertible Preferred Stock then
outstanding shall have the right thereafter to convert such share only into the
kind and amount of securities, cash or other property receivable upon such trans
action by a holder of the number of shares of Common Stock who made one of the
elections provided for in such transaction (as determined by the Board of
Directors, whose determination shall be conclusive) into which such share might
have been converted immediately prior to such transaction. The Corporation or
the person formed by such consolidation or resulting from such merger or which
acquires such shares or which acquires the Corporation's shares, as the case may
be, shall make provisions in its certificate or articles of incorporation or
other governing document to establish such right Such certificate or articles of
incorporation or other governing document shall provide for adjustments which,
for events subsequent to the effective date of such certificate or articles
-9-
of incorporation or other governing document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 3. The above
provisions shall similarly apply to successive transactions of the foregoing
type.
(f) RESERVATION OF SHARES; ETC. The Corporation shall at all tunes
reserve and keep available, free from preemptive rights out of its authorized
and unissued Common Stock, solely for the purpose of effecting the conversion of
the Convertible Preferred Stock, such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of all shares of
Convertible Preferred Stock from time to time outstanding. The Corporation shall
from time to time, in accordance with the laws of the State of Delaware, in good
faith and as expeditiously as possible endeavor to cause the authorized number
of shares of Common Stock to be increased if at any time the number of shares of
authorized and unissued Common Stock shall not be sufficient to permit the
conversion of all the then outstanding shares of Convertible Preferred Stock.
If any shares of Common Stock required to be reserved for the purposes
of conversion of the Convertible Preferred Stock hereunder require registration
with or approval of any governmental authority under any Federal or State law
before such shares may be issued upon conversion, the Corporation will in good
faith and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved as the case may be. If the Common Stock is listed on any
national securities exchange, the Corporation will, if permitted by the rules of
such exchange, list and keep listed on such exchange, upon official notice of
issuance, all shares of Common Stock issuable upon conversion of the Convertible
Preferred Stock, for so long as the Common Stock continues to be so listed.
(g) PRIOR NOTICE OF CERTAIN EVENTS. In case:
(i) the Corporation shall (A) declare any dividend (or
any other distribution) on its Common Stock, other than (1) a dividend
payable in shares of Common Stock or (2) a dividend payable in cash out
of its retained earnings other than any special or nonrecurring or
other extraordinary dividend or (B) declare or authorize a redemption
or repurchase of in excess of 10% of the then outstanding shares of
Common Stock; or
(ii) the Corporation shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or series or of any other
rights or warrants; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value
to par value), or of any consolidation or merger to which the
Corporation is party and for which approval
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of any stockholders of the Corporation shall be required, or of the
sale or transfer of all or substantially all of the assets of the
Corporation or of any share exchange whereby the Corporation is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent
for the Convertible Preferred Stock, and shall cause to be mailed to
all holders of record of the Convertible Preferred Stock at their last
addresses as they shall appear upon the stock transfer books of the
Corporation, at least 15 days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such
dividend, distribution, redemption, repurchase, or grant of rights or
warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution, redemption, repurchase, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution,
liquidation or winding up is expected to become effective and the date
as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution,
liquidation or winding up (but no failure to mail such notice or any
defect therein or in the mailing thereof shall affect the validity of
the corporate action required to be specified in such notice).
(h) CERTAIN ADDITIONAL RIGHTS. In case the Corporation shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section 3(c)(iv) or 3(c)(v) (including, without limitation,
dividends or distribution referred to in the last sentence of Section 3(c)(iv)),
the holder of each share of Convertible Preferred Stock upon the conversion
thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the conversion price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which such share of Convertible Preferred Stock is converted, the portion
of the shares of Common Stock, rights, warrants, evidences of indebtedness,
shares of capital stock, cash and assets as distributed applicable to one share
of Common Stock; provided, however, that at the election of the Corporation
(whose election shall be evidenced by a resolution of the Board of Directors)
with respect to all holders so converting, the Corporation may, in lieu of
distributing to such holder any portion of such distribution not consisting of
cash or securities of the Corporation, pay such holder an amount in cash equal
to the fair market value thereof (as determined in good
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faith by the Board of Directors, which determination shall be conclusive). If
any conversion of a share of Convertible Preferred Stock described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the holder of the share of
Convertible Preferred Stock so converted is entitled to receive in accordance
with the immediately preceding sentence, the Corporation may elect (such
election to be evidenced by a resolution of the Board of Directors) to
distribute to such holder a due bill for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such holder is so entitled, provided that such due bill (a) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (b) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital Stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.
SECTION 4. SPECIAL CONVERSION RIGHTS.
(a) CHANGE OF CONTROL. Upon the occurrence of a Change of Control
(as defined in Section 4(e)) with respect to the Corporation, each holder of
Convertible Preferred Stock shall have the right, at the holder's option, for a
period of 30 days after the mailing of a notice by the Corporation that a Change
of Control has occurred, to convert all, but not less than all, of such holder's
Convertible Preferred Stock into Common Stock of the Corporation at an adjusted
conversion price per share equal to the Market Value (as defined in Section
4(e)) of the Common Stock. The Corporation may, at its option, in lieu of
providing Common Stock upon any such special conversion, provide the holder with
cash equal to the Market Value of the Common Stock multiplied by the number of
shares of Common Stock into which such Convertible Preferred Stock would have
been convertible immediately prior to such Change of Control. The special
conversion right arising upon a Change of Control shall only be applicable with
respect to the first Change of Control that occurs after the first date of
issuance of any Convertible Preferred Stock. Convertible Preferred Stock which
becomes convertible pursuant to a special conversion right shall, unless so
converted, remain convertible pursuant to Section 3 at the conversion price in
effect immediately before the effective date of the Change of Control, subject
to subsequent adjustment as provided in Section 3(c).
(b) FUNDAMENTAL CHANGE. Upon the occurrence of a Fundamental
Change (as defined in Section 4(e)) with respect to the Corporation, each holder
of Convertible Preferred Stock shall have a special conversion right, at the
holder's option, for a period of 30 days after the mailing of a notice by the
Corporation that a Fundamental Change has occurred, to convert all, but not less
than all, of such holder's Convertible Preferred Stock into the kind and amount
of cash, securities, property or other assets receivable upon such Fundamental
Change by a holder of the number of shares of Common Stock into which such
Convertible Preferred Stock would have been convertible immediately prior to
such
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Fundamental Change at an adjusted conversion price equal to the Market Value of
the Common Stock. The Corporation or a successor corporation, as the case may
be, may, at its option and in lieu of providing the consideration as required
above upon such conversion, provide the bolder with cash equal to the Market
Value of the Common Stock multiplied by the number of shares of Common Stock
into which such Convertible Preferred Stock would have been convertible
immediately prior to such Fundamental Change. Convertible Preferred Stock which
becomes convertible pursuant to a special conversion right shall, unless
converted, remain convertible pursuant to Section 3 into the kind and amount of
cash, securities, property or other assets that the holders of the Convertible
Preferred Stock would have owned immediately after the Fundamental Change if the
holders had converted the Convertible Preferred Stock immediately before the
effective date of the Fundamental Change, subject to subsequent adjustment under
the provisions contemplated by Section 3(c), if applicable.
(c) NOTICE. Upon the occurrence of a Change of Control or a
Fundamental Change with respect to the Corporation, within 30 days after such
occurrence, the Corporation shall mail to each bolder of Convertible Preferred
Stock a notice of such occurrence (the "Special Conversion Notice") setting
forth the following:
(i) the event constituting the Change of Control or
Fundamental Change;
(ii) the date upon which the applicable special conversion
right will terminate;
(iii) the Market Value of the Common Stock;
(iv) the conversion price then in effect under Section 3
and the continuing conversion rights, if any, under Section 3;
(v) the name and address of the paying agent and
conversion agent;
(vi) that holders who want to convert Convertible
Preferred Stock must satisfy the requirements of Section 4(d) and must
exercise such conversion right within the 30-day period after the
mailing of such notice by the Corporation;
(vii) that exercise of such conversion right shall be
irrevocable and no dividends on the Convertible Preferred Stock (or
portions thereof) tendered for conversion shall accrue from and after
the conversion date; and
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(viii) that the Corporation (or a successor corporation, if
applicable) may, at its option, elect to pay cash (specifying the
amount thereof per share) for all Convertible Preferred Stock tendered
for conversion.
(d) EXERCISE PROCEDURES. A bolder of Convertible Preferred Stock
must exercise the special conversion right within the 30-day period after the
mailing of the Special Conversion Notice or such special conversion right shall
expire. Such right must be exercised in accordance with Section 3(b) to the
extent the procedures in Section 3(b) are consistent with the special provisions
of this Section 4. Exercise of such conversion right shall be irrevocable and no
dividends on the Convertible Preferred Stock tendered for conversion shall be
payable in respect of the period from the list dividend payment date preceding
the conversion date through the conversion date. The conversion date with
respect to the exercise of a special conversion right arising upon a Change of
Control or Fundamental Change shall be the 30th day after the mailing of the
Special Conversion Notice.
(e) DEFINITIONS. The following definitions shall apply to terms
used in this Section 4:
(i) A "Change of Control" with respect to the Corporation
shall be deemed to have occurred at such time as any person (within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act)),
including a group (within the meaning of Rule 13d-5 under the Exchange
Act), together with any of its Affiliates or Associates, files or
becomes obligated to file a report (or any amendment or supplement
thereto) on Schedule 13D or 14D-1 pursuant to the Exchange Act,
disclosing that such person has become the beneficial owner of either
(A) 50% or more of the shares of Common Stock of the Corporation then
outstanding or (B) securities representing 50% or more of the combined
voting power of the Voting Stock (as defined below) of the Corporation
then outstanding; provided a Change of Control shall not be deemed to
have occurred (i) with respect to any transaction that constitutes a
Fundamental Change, (ii) as a result of a person becoming or being
deemed the beneficial owner of Common Stock because such person or an
affiliate of such person is or becomes a party to the Stockholders'
Agreement among the Callon Family and NOCO Enterprises, L.P., dated
September 16,1994 as amended from time to time (the "Stockholders'
Agreement"), or (iii) as a result of a person currently a party to the
Stockholders' Agreement or an affiliate of such person acquiring
beneficial ownership of Common Stock. As used herein, a person shall be
deemed to have "beneficial ownership" with respect to, and shall be
deemed to "beneficially own," any securities of the Corporation in
accordance with Section 13 of the Exchange Act and the rules and
regulations (including Rule 13d-3, Rule 13d-5 and any successor rules)
promulgated by the Securities and Exchange Commission thereunder;
-14-
provided that a person shall be deemed to have beneficial ownership of
all securities that any such person has a right to acquire whether such
right is exercisable immediately or only after the passage of time and
without regard to the 60-day limitation referred to in Rule 13d-3 and,
provided further, that a beneficial owner of Convertible Preferred
Stock shall not be deemed to beneficially own the Common Stock into
which such Convertible Preferred Stock is convertible solely by reason
of ownership of the Convertible Preferred Stock. An "Affiliate" of a
specified person is a person that directly or indirectly controls, or
is controlled by or is under common control with, the person specified.
AN "Associate" of a person means (i) any corporation or organization,
other than the Corporation or any subsidiary of the Corporation, of
which the person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities; (ii) any trust or estate in which the person has a
substantial beneficial interest or as to which the person serves as
trustee or in a similar fiduciary capacity; and (iii) any relative or
spouse of the person or any relative of the spouse, who has the same
home as the person or who is a director or officer of the person or any
of its parents or subsidiaries.
(ii) "Exchange Act" means the Securities Exchange Act of
1934, as amended, and as in effect on the date hereof.
(iii) A "Fundamental Change" with respect to the
Corporation means (A) the occurrence of any transaction or event in
connection with which all or substantially all of the Common Stock of
the Corporation shall be exchanged for, converted into, acquired for or
constitute solely the right to receive cash, securities, property or
other assets (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) or (B) the conveyance, sale, lease,
assignment, transfer or other disposal of all or substantially all for
the Corporation's property, business or assets; provided, however, that
a Fundamental Change shall not be deemed to have occurred with respect
to either of the following transactions or events: (1) any transaction
or event in which more than 50% (by value as determined in good faith
by the Board of Directors) of the consideration received by holders of
Common Stock consists of Marketable Stock (as defined below); or (2)
any consolidation or merger of the Corporation in which the holders of
Common Stock of the Corporation immediately prior to such transaction
own, directly or indirectly, (x) 50% or more of the common stock of the
surviving corporation (or of the ultimate parent of such surviving
corporation) outstanding at the time immediately after such
consolidation or merger and (y) securities representing 50% or more of
the combined voting power of the surviving corporation's Voting Stock
(or for the Voting Stock of the ultimate parent of such surviving
corporation) outstanding at such time. The phrase "all or substantially
-15-
all" as used in this definition in reference to the Common Stock shall
mean 66% or more of the aggregate outstanding Common Stock.
(iv) "Voting Stock" means, with respect to any person,
capital stock of such person having general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of such person (irrespective of whether or not at
the time capital stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).
(v) The "Market Value" of the Common Stock or any other
Marketable Stock shall be the average of the last reported sales prices
of the Common Stock or such other Marketable Stock, as the case may be,
for the five business days ending on the last business day preceding
the date of the Change of Control or Fundamental Change; provided,
however, that if the Marketable Stock is not traded on any national
securities exchange or similar quotation system as described in the
definition of "Marketable Stock" during such period, then the Market
Value of such Marketable Stock shall be the average of the last
reported sales' prices per share of such Marketable Stock during the
first five business days commencing with the first day after the date
on which such Marketable Stock was first distributed to the general
public and traded on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq National Market or any similar system of automated
dissemination of quotations of securities prices in the United States.
(vi) "Marketable Stock" shall mean Common Stock or common
stock of any corporation that is the successor (or of the ultimate
parent of such successor) to all or substantially all of the business
or assets of the Corporation as a result of a Fundamental Change, which
is (or will, upon distribution thereof, be) listed or quoted on the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market or any similar system of automated dissemination of quotations
of securities prices in the United States.
SECTION 5. GENERAL CLASS AND SERIES VOTING RIGHTS. Except as provided
in this Section 5 and in Section 6 hereof or as specifically required by the
laws of the State of Delaware or by the provisions of the Certificate of
Incorporation of the Corporation, as amended, the Convertible Preferred Stock
shall have no voting rights. The shares of Convertible Preferred Stock shall
have the following voting rights:
(a) So long as any shares of Convertible Preferred Stock remain
outstanding, the vote or consent of the holders of at least two-thirds of the
shares of Convertible Preferred Stock outstanding at the time (voting separately
as a class) given in person or by
-16-
proxy, either in writing or at any special or annual meeting called for the
purpose, shall be necessary to permit, effect or validate any one or more of the
following:
(i) The authorization, creation or issuance, or any
increase in the authorized or issued amount, of any class or series of
stock (including any class or series of preferred stock) ranking prior
(as that term is hereinafter defined in this Section 5) to the
Convertible Preferred Stock; or
(ii) The amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of the
Certificate of Incorporation or of these resolutions which would alter,
change or repeal the powers, preferences, or special rights of the
shares of the Convertible Preferred Stock so as to affect them
adversely.
(b) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required shall be effected, all outstanding shares of Convertible Preferred
Stock shall have been redeemed or sufficient funds and/or shares of Common Stock
shall have been deposited in trust to effect such redemption.
(c) For purposes of this resolution, any class or series of stock
of the Corporation shall be deemed to rank:
(i) prior to the Convertible Preferred Stock as to
dividends or as to distribution of assets upon liquidation, dissolution
or winding up, if the holders of such class or series shall be entitled
to the receipt of dividends or amounts distributable upon liquidation,
dissolution or winding up, as the case may be, in preference or
priority to the holders of Convertible Preferred Stock;
(ii) on a parity with the Convertible Preferred Stock as
to dividends or as to distribution of assets upon liquidation,
dissolution or winding up, whether or not the dividend rates, dividend
payment dates, or redemption or liquidation prices per share thereof
shall be different from those of the Convertible Preferred Stock, if
the holders of such class or series of stock and the Convertible
Preferred Stock shall be entitled to the receipt of dividends or of
amounts distributable upon liquidation, dissolution or winding up, as
the case may be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority one over the other;
and
(iii) junior to the Convertible Preferred Stock as to
dividends or as to distribution of assets upon liquidation, dissolution
or winding up, if such class or series shall be Common Stock or if the
holders of the Convertible Preferred
-17-
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of shares of such
class or series.
(d) The holders of Convertible Preferred Stock shall also be
entitled to vote on certain amendments or supplements to the Indenture
establishing the 8.5% Convertible Subordinated Debentures due 2010, of the
Corporation, for which the Convertible Preferred Stock may be exchanged as
described in Section 9 hereof and as provided in Article Nine of such Indenture.
SECTION 6. DEFAULT VOTING RIGHTS.
(a) ELECTION OF DIRECTORS. Whenever, at any time or times,
dividends payable on the shares of Convertible Preferred Stock shall be in
arrears in an amount equal to at least six quarterly dividends (whether or not
consecutive), the holders of the outstanding shares of Convertible Preferred
Stock shall have the exclusive right (voting separately as a class) to elect two
directors of the Corporation.
(b) VOTE PER SHARE. At elections for such directors, each holder
of Convertible Preferred Stock shall be entitled to one vote for each share of
Convertible Preferred Stock held. Upon the vesting of such right with the
holders of Convertible Preferred Stock, the maximum authorized number of members
of the Board of Directors shall automatically be increased by two, which shall
be of the class or classes selected by the Corporation's Board of Directors
which has the least number of director positions then currently filled, and the
two vacancies so created shall be filled by vote of the holders of the
outstanding shares of Convertible Preferred Stock as hereinafter set forth. The
right of the holders of Convertible Preferred Stock, voting separately as a
class to elect members of the Board of Directors of the Corporation shall
continue until such time as all dividends accrued and unpaid on the Convertible
Preferred Stock shall have been paid or declared and funds set aside to provide
for payment in full, at which time such right shall terminate, except as herein
or by law expressly provided, subject to revesting in the event of each and
every subsequent default of the character above mentioned.
(c) MEETINGS. Whenever the voting right described in subsection
(a) above shall have vested in the holders of the Convertible Preferred Stock,
the right may be exercised initially either at a special meeting of the holders
of the Convertible Preferred Stock called as hereinafter provided, or at any
annual meeting of stockholders held for the purpose of electing directors, and
thereafter at each successive annual meeting.
(d) CALL OF MEETING. At any time when the voting right described
in subsection (a) above shall have vested in the holders of the Convertible
Preferred Stock, and if the right shall not already have been initially
exercised, a proper officer of the Corporation
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shall, upon the written request of the holders of record of 10% in number of the
shares of the Convertible Preferred Stock then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of the holders of the
Convertible Preferred Stock for the purpose of electing directors. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding of annual meetings of
stockholders of the Corporation, or, if none, at a place designated by the
Secretary of the Corporation. If the meeting shall not be called by the proper
officers of the Corporation within 30 days after the personal service of such
written request upon the Secretary of the Corporation, or within 30 days after
mailing it within the United States of America, by registered mail, addressed to
the Secretary of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
holders of record of 10% in number of the shares of the Convertible Preferred
Stock then outstanding may designate in writing one of their members to call
such meeting at the expense of the Corporation, and such meeting may be called
by such person so designated upon the notice required for annual meetings of
stockholders and shall be held at the same place as is elsewhere provided for in
this subsection (d). Any holder of the Convertible Preferred Stock shall have
access to the share transfer books of the Corporation as permitted under the
Delaware General Corporation Law for the purpose of causing a meeting of the
stockholders to be called pursuant to the provisions of this subsection (d).
Notwithstanding the provisions of this subsection (d), however, no such special
meeting shall be held during a period within 60 days immediately preceding the
date fixed for the next annual meeting of stockholders.
(e) QUORUM. At any meeting held for the purpose of electing
directors at which the holders of the Convertible Preferred Stock shall have the
right to elect directors as provided herein, the presence in person or by proxy
of the holders of 50% of the then outstanding shares of the Convertible
Preferred Stock shall be required and be sufficient to constitute a quorum of
the holders of the Convertible Preferred Stock for the election of directors. At
any such meeting or adjournment thereof (i) the absence of a quorum of the
holders of the Convertible Preferred Stock shall not prevent the election of
directors other than those to be elected by the holders of the Convertible
Preferred Stock and the absence of a quorum or quorums of the holders of other
classes or series of capital stock entitled to elect such other directors shall
not prevent the election of directors to be elected by the holders of the
Convertible Preferred Stock and (ii) in the absence of a quorum of the holders
of the Convertible Preferred Stock, a majority of the holders present in person
or by proxy of the Convertible Preferred Stock shall have the power to adjourn
the meeting, or appropriate portion thereof for the election of directors which
the holders of the Convertible Preferred Stock are entitled to elect, from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present. The Chairman of the Board or the President of the Corporation
shall preside at any such meeting.
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(f) TERM. Each director elected by the holders of shares of
Convertible Preferred Stock shall continue to serve as a director until such
time as all dividends accrued and unpaid on the Convertible Preferred shall have
been paid or declared and funds set aside to provide for payments in full, at
which time the term of office of all persons elected as directors by the holders
of shares of Convertible Preferred Stock shall forthwith terminate and the
number of members of the Board of Directors of the Corporation shall be reduced
accordingly. Whenever the term of office of the directors elected by the holders
of Convertible Preferred Stock voting as a class shall end and the special
voting powers vested in the holders of Convertible Preferred Stock as provided
in this Section 6 shall have expired, the number of directors shall be such
number as may be provided for in the By-Laws irrespective of any increase made
pursuant to the provisions of this Section 6.
SECTION 7. OPTIONAL REDEMPTION.
(a) REDEMPTION PRICE. The Corporation may at its option, at any
time during the twelve-month periods beginning on or after December 31, 1998, in
the years indicated below, redeem all, or any numbers less than all, of the
outstanding shares of Convertible Preferred Stock, provided that the Convertible
Preferred Stock may not be redeemed, in whole or in part, prior to December 31,
1998. All redemption of shares of Convertible Preferred Stock shall be effected
at the applicable redemption prices set forth below:
If Redemption Date During the Redemption Price
Twelve-Month Period Beginning Per Share
- ----------------------------- ----------------
1998.............................................. $ 26.488
1999.............................................. 26.275
2000.............................................. 26.063
2001.............................................. 25.850
2002.............................................. 25.638
2003.............................................. 25.425
2004.............................................. 25.213
2005 and thereafter .............................. 25.000
-20-
plus, in each case, an amount equal to all dividends (whether or not declared)
accrued and unpaid on such share of Convertible Preferred Stock to the date
fixed for redemption (the price from time to time to redeem the Convertible
Preferred Stock excluding any dividends (whether or not declared) accrued and
unpaid, is referred to herein as the "Redemption Price").
(b) ACCRUED DIVIDENDS. The Corporation may not purchase, redeem or
otherwise acquire for value any shares of Convertible Preferred Stock or shares
of any other series of preferred stock then outstanding ranking on a parity with
or junior to the Convertible Preferred Stock unless all accrued dividends on all
shares of Convertible Preferred Stock then outstanding shall have been paid or
declared and a sum sufficient for the payment thereof set apart. No sinking find
shall be established for the Convertible Preferred Stock.
(c) NOTICE OF REDEMPTION. Notice of any proposed redemption of
shares of Convertible Preferred Stock shall be mailed to each record holder of
the shares of Convertible Preferred Stock to be redeemed at least 30 but not
more than 60 days prior to the date fixed for such redemption (herein referred
to as the "Redemption Date"). Each such notice shall set forth the following:
(i) the Redemption Date;
(ii) the Redemption Price per share;
(iii) the place for payment and for delivering the stock
certificate(s) and transfer instrument(s) in order to receive the
Redemption Price;
(iv) the shares of Convertible Preferred Stock to be
redeemed;
(v) the then effective Conversion Price;
(vi) the price of the Common Stock on the last trading day
prior to the date of the notice: and
(vii) that the right of holders of shares of Convertible
Preferred Stock being redeemed to exercise their conversion right shall
terminate as to such shares at the close of business on fifth business
day prior to the date fixed for redemption (provided that no default by
the Corporation in the payment of the applicable Redemption Price
(including any accrued and unpaid dividends) shall have occurred and be
continuing).
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Any notice mailed in such manner shall be conclusively deemed to have
been duly given regardless of whether such notice is in fact received. If less
than all the outstanding shares of Convertible Preferred Stock are to be
redeemed, the Corporation will select those to be redeemed ratably or by lot in
a manner determined by the Board of Directors. In order to facilitate the
redemption of the Convertible Preferred Stock, the Board of Directors may fix a
record date for determination of holders of Convertible Preferred Stock to be
redeemed, which shall not be more than 30 days prior to the Redemption Date with
respect thereto.
The holder of any shares of Convertible Preferred Stock redeemed
pursuant to this Section 7 upon any exercise of the Corporation's redemption
right shall not be entitled to receive payment of the Redemption Price for such
shares until such bolder shall cause to be delivered to the place specified in
the notice given with respect to such redemption (i) the certificate(s)
representing such share of Convertible Preferred Stock and (ii) transfer
instrument(s) sufficient to transfer such shares of Convertible Preferred Stock
to the Corporation free of any adverse interest. No interest shall accrue on the
Redemption Price of any share of Convertible Preferred Stock after the
Redemption Date.
At the close of business on the Redemption Date for any share of
Convertible Preferred Stock, such share shall (provided the Redemption Price
(including any accrued and unpaid dividends to the Redemption Date) of such
shares has been paid or properly provided for) be deemed to cease to be
outstanding and all rights of any person other than the Corporation in such
share shall be extinguished on the Redemption Date for such share (including all
rights to receive future dividends with respect to such share) except for the
right to receive the Redemption Price (including any accrued and unpaid
dividends to the Redemption Date), without interest for such share in accordance
with the provisions of this Section 7, subject to applicable escheat laws.
In the event that any shares of Convertible Preferred Stock shall be
converted into Common Stock prior to the Redemption Date pursuant to Section 3
or 4, then (i) the Corporation shall not have the right to redeem such shares
and (ii) any funds, securities or other property which shall have been deposited
for the payment of the Redemption Price for such shares shall be returned to the
Corporation immediately after such conversion (subject to declared dividends
payable to holders of shares of Convertible Preferred Stock on the record date
for such dividends being so payable, to the extent set forth in Section 3
hereof, regardless of whether such shares are converted subsequent to such
record date and prior to the related Dividend Payment Date) and any shares of
Common Stock reserved for issuance upon redemption of such converted shares need
no longer be so reserved.
Notwithstanding the foregoing provisions of this Section 7, and subject
to the provisions of Section 2 hereof, if a dividend upon any shares of
Convertible Preferred Stock is past due, (i) no share of the Convertible
Preferred Stock may be redeemed, except by
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means of a redemption pursuant to which all outstanding shares of the
Convertible Preferred Stock are simultaneously redeemed and all accrued
dividends paid and (ii) the Corporation shall not purchase or otherwise acquire
any shares of the Convertible Preferred Stock, except pursuant to a purchase or
exchange offer made on the same terms to all holders of the Convertible
Preferred Stock.
SECTION 8. RANK; LIQUIDATION. Upon any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation (for the purposes of
this Section 8, a "Liquidation"), the holders of Convertible Preferred Stock
shall be entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders, an amount equal to $25.00 per share of
Convertible Preferred Stock then held by such stockholder plus all dividends
(whether or not declared or due) accrued and unpaid on such share on the date
fixed for the distribution of assets of the Corporation to the holders of
Convertible Preferred Stock. The shares of Convertible Preferred Stock shall
rank prior to the shares of Common Stock and any other class or series of stock
of the Corporation ranking junior to the Convertible Preferred Stock, so that
the holders of the Convertible Preferred Stock shall receive the full amount to
which they shall be entitled before any distribution of assets shall be made to
the holders of the Common Stock or the holders of any other stock that ranks
junior to the Convertible Preferred Stock in respect of distributions upon the
Liquidation of the Corporation.
If upon any Liquidation of the Corporation, the assets available for
distribution to the holders of Convertible Preferred Stock and any other stock
of the Corporation ranking on a parity with the Convertible Preferred Stock upon
Liquidation which shall then be outstanding (hereinafter in this paragraph
called the "Total Amount Available") shall be insufficient to pay the holders of
all outstanding shares of Convertible Preferred Stock and all other such parity
stock the full amounts (including all dividends accrued and unpaid) to which
they shall be entitled by reason of such Liquidation of the Corporation, then
there shall be paid to the holders of the Convertible Preferred Stock in
connection with such Liquidation of the Corporation, an amount equal to the
product derived by multiplying the Total Amount Available times a fraction, the
numerator of which shall be the full amount to which the holders of the
Convertible Preferred Stock shall be entitled under the terms of the preceding
paragraph by reason of such Liquidation of the Corporation and the denominator
of which shall be the total amount which would have been distributed by reason
of such Liquidation of the Corporation with respect to the Convertible Preferred
Stock and all other stock ranking on a parity with the Convertible Preferred
Stock upon Liquidation then outstanding had the Corporation possessed sufficient
assets to pay the maximum amount which the holders of all such stock would be
entitled to receive in connection with such Liquidation of the Corporation.
The voluntary sale, conveyance, lease, exchange or transfer of all or
substantially all of the property or assets of the Corporation, or the merger or
consolidation of the
-23-
Corporation into or with any other corporation, or the merger of any other
corporation into the Corporation, or any purchase or redemption of some or all
of the shares of any class or series of stock of the Corporation, shall not be
deemed to be a Liquidation of the Corporation of the purposes of this Section 8
(unless in connection therewith the Liquidation of the Corporation is
specifically approved).
The holder of any shares of Convertible Preferred Stock shall not be
entitled to receive any payment owed for such shares under this Section 8 until
such holder shall cause to be delivered to the Corporation (i) the
certificate(s) representing such shares of Convertible Preferred Stock and (ii)
transfer instrument(s) satisfactory to the Corporation and sufficient to
transfer such shares of Convertible Preferred Stock to the Corporation free of
any adverse interest. No interest shall accrue on any payment upon Liquidation
after the due date thereof.
After payment of the full amount of the liquidating distribution to
which they are entitled, the holders of shares of the Convertible Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Corporation.
SECTION 9. EXCHANGE.
(a) EXCHANGE FOR DEBENTURES. The shares of Convertible Preferred
Stock may be exchanged, in whole but not in part, at the option of the
Corporation, for its 8.5% Convertible Subordinated Debentures due 2010 (the
"Debentures") on any Dividend Payment Date commencing on January 15,1998. The
Debentures are to be issued under an Indenture (the "Indenture") between the
Corporation and Bank One, Columbus, N.A., as trustee (together with any
successor trustee, the "Trustee"), substantially in the form filed as an exhibit
to the Corporation's Registration Statement on Form S-1 (Registration No.
33-96700) as filed with the Securities and Exchange Commission, completed as set
forth therein and with such changes as may be required by law or usage. Holders
of the outstanding shares of Convertible Preferred Stock will be entitled to
receive $25.00 principal amount of the Debentures in exchange for each share of
Convertible Preferred Stock held by them at the time of exchange, provided that
such exchange may not occur unless all accrued and unpaid dividends on the
Convertible Preferred Stock through the Dividend Payment Date established as the
exchange date have been paid or set aside for payment. Any such exchange shall
be effected in the same manner and, upon the same notice, as a redemption of the
Convertible Preferred Stock pursuant to Section 7, as aforesaid. Upon any such
exchange, the shares of Convertible Preferred Stock shall (provided such
exchange is duly and properly effected) be deemed to cease to be outstanding as
of the close of business on the date established for such exchange, and all
rights of any holder thereof shall be extinguished except the right to receive
Debentures in exchange therefore and the right to receive accrued and unpaid
dividends on such shares of Convertible Preferred Stock to the date established
for such exchange. As in the case of a redemption of shares of
-24-
Convertible Preferred Stock pursuant to Section 7, holders of shares of
Convertible Preferred Stock must surrender such shares a order to receive the
Debentures for which such shares have been exchanged, but upon such surrender
such holders will be entitled to receive all interest accrued and unpaid on such
Debentures from the date of exchange at the time and in the manner that such
interest would be paid in the ordinary course pursuant to the Indenture pursuant
to which such Debentures shall be issued. Dividends due on the shares of
Convertible Preferred Stock on the Dividend Payment Date on which the exchange
is effected will be mailed to holders in the regular course.
(b) DELIVERY OF DOCUMENTS. No exchange of the Convertible
Preferred Stock for Debentures may be effected unless prior to such exchange the
Corporation causes to be delivered to the Trustee the documents specified in
Section 303 the Indenture.
SECTION 10. PAYMENTS. The Corporation may provide funds for any
payment of the Redemption Price for any shares of Convertible Preferred Stock or
any amount distributable with respect to any Convertible Preferred Stock under
Sections 7 and 8 hereof by depositing such funds with a bank or trust company
selected by the Corporation having a net worth of at least $50,000,000, in trust
for the benefit of the holders of such shares of Convertible Preferred Stock
under arrangements providing irrevocably for payment upon satisfaction of any
conditions to such payments by the holders of such shares of Convertible
Preferred Stock which shall reasonably be required by the Corporation. The
Corporation shall be entitled to make any deposit of funds contemplated by this
Section 10 under arrangements designed to permit such funds to generate interest
or other income for the Corporation, and the Corporation shall be entitled to
receive all interest and other income earned by any funds while they shall be
deposited as contemplated by this Section 10, provided that the Corporation
shall maintain on deposit funds sufficient to satisfy all payments which the
deposit arrangement shall require to be paid by the Corporation.
Any payment which may be owed for the payment of the Redemption Price
for any shares of Convertible Preferred Stock pursuant to Section 7 or the
payment of any amount distributable with respect to any shares of Convertible
Preferred Stock under Section 8 shall be deemed to have been "paid or properly
provided for" upon the earlier to occur of: (i) the date upon which such funds
sufficient to make such payment shall be deposited in a manner contemplated by
the preceding paragraph or (ii) the date upon which a check payable to the
person entitled to receive such payment shall be delivered to such person or
mailed to such person at either the address of such person then appearing on the
books of the Corporation or such other address as the Corporation shall deem
reasonable. The Corporation may deposit Debentures or shares of Common Stock to
be exchanged for shares of Convertible Preferred Stock in the manner
contemplated by the preceding paragraph, but, with respect to Debentures, the
interest accruing on such Debentures shall accrue to the former holders of the
Convertible Preferred Stock entitled thereto.
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Subject to applicable escheat laws, if the conditions precedent to the
disbursement of any funds deposited by the Corporation pursuant to this Section
10 shall not have been satisfied within six months after the establishment of
the trust for such funds, then (i) such funds shall be returned to the
Corporation upon its request; (ii) after such return, such funds shall be free
of any trust which shall have been impressed upon them; (iii) the person
entitled to this payment for which such funds shall have been originally
intended shall have the right to look only to the Corporation for such payment,
subject to applicable escheat laws; and (iv) the trustee which shall have held
such funds shall be relieved of any responsibility for such funds upon the
return of such funds to the Corporation.
SECTION 11. STATUS OF REACQUIRED SHARES. Shares of Convertible
Preferred Stock issued and reacquired by the Corporation (including, without
limitation, shares of Convertible Preferred Stock which have been redeemed
pursuant to the terms of Section 7 hereof; shares of Convertible Preferred Stock
which have been converted into shares of Common Stock and shares of Convertible
Preferred Stock which have been exchanged for Debentures) shall have the status
of authorized and unissued shares of preferred stock, undesignated as to series,
subject to later issuance.
SECTION 12. PREEMPTIVE RIGHTS. The Convertible Preferred Stock is not
entitled to any preemptive or subscription rights in respect of any securities
of the Corporation.
SECTION 13. MISCELLANEOUS.
(a) TRANSFER TAXES. The Corporation shall pay any and all stock
transfer and documentary stamp taxes that may be payable in respect of any
issuance and delivery of shares of Convertible Preferred Stock or shares of
Common Stock or other securities issued on account of Convertible Preferred
Stock pursuant hereto or certificates or instruments evidencing such shares or
securities. The Corporation shall not, however, be required to pay any such tax
which may be payable in respect of any transfer involved in the issuance or
delivery of shares of Convertible Preferred Stock or Common Stock or other
securities in a name other than that in which the shares of Convertible
Preferred Stock with respect to which such shares or other securities are issued
or delivered were registered, or in respect of any payment to any person with
respect to any such shares or securities other than a payment to the registered
holder thereof; and shall not be required to make any such issuance, delivery or
payment unless and until the person otherwise entitled to such issuance,
delivery or payment 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 or is not payable.
(b) FAILURE TO DESIGNATE STOCKHOLDER OR PAYEE. In the event that a
holder of shares of Convertible Preferred Stock shall not by written notice
designate the name in
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which shares of Common Stock to be issued upon conversion or redemption of such
shares, or Debentures to be issued upon exchange of such shares, should be
registered or to whom payment upon redemption of shares of Convertible Preferred
Stock should be made or the address to which the certificates or instruments
evidencing such shares, Debentures or such payment should be sent, the
Corporation shall be entitled to register such shares or Debentures and make
such payment in the name of the holder of such Convertible Preferred Stock as
shown on the records of the Corporation and to send the certificates or
instruments evidencing such shares or such payment to the address of such holder
shown on the records of the Corporation.
(c) REGISTRAR AND TRANSFER AGENT. The Corporation may appoint, and
from time to time discharge and change, a transfer agent for the Convertible
Preferred Stock.
(d) SEVERABILITY. Whenever possible, each provision hereof shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased, then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.
IN WITNESS WHEREOF, this Statement of Designation establishing a series
of shares has been made under the hand of the undersigned, the President of the
Corporation, this 22nd day of November, 1995.
CALLON PETROLEUM COMPANY
By /s/ Fred L. Callon
-------------------------
Fred L. Callon, President
Attest
By /s/ H. Michael Tatum, Jr.
-----------------------------
H. Michael Tatum, Jr.
Secretary
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:30 PM 11/27/1995
950274310 - 2390003
CERTIFICATE OF CORRECTION
CALLON PETROLEUM COMPANY
Callon Petroleum Company, a corporation organized and existing under
and by virtue of The General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
1. That the Corporation filed a Certificate of Designations (the
"Original Certificate") with the Delaware Secretary of State on November 22,
1995, setting forth the resolutions, establishing and designating a series of
shares and fixing and determining the designations, preferences, limitations and
relative rights thereof, for the Corporation's $2.125 Convertible Exchangeable
Preferred Stock, Series A (the "Convertible Preferred Stock"); and
2. That the Original Certificate contained certain inaccuracies
in Section 3 (a), Section 3(c)(vi), Section 6(f), the third paragraph of Section
8 and the third paragraph of Section 10 that the Corporation desires to correct
with this Certificate of Correction pursuant to Section 103(f) of The General
Corporation Law of the State of Delaware; and
3. That, as corrected, Section 3(a) of the Original Certificate
shall be and read as follows:
(a) RIGHT OF CONVERSION. Each share of Convertible
Preferred Stock shall be convertible at the option of the holder
thereof at any time prior to the close of business on the day prior to
the date fixed for redemption of such share as herein provided, into
fully paid and nonassessable shares of Common Stock, at a rate per full
share of Convertible Preferred Stock determined by dividing $25.00 by
the conversion price per share of Common Stock in effect on the date
such share is surrendered for conversion, or into such additional or
other securities, cash or property and at such other rates as required
in accordance with the provisions of this Section 3. For purposes of
this resolution, the "conversion price" per share of Common Stock shall
initially be $11.00 and shall be adjusted from tine to time in
accordance with the provisions of this Section 3. Each share of
Convertible Preferred Stock may be converted in whole or in part.
4. That, as corrected, Section 3(c)(vi) of the Original
Certificate shall be and read as follows:
(vi) For the purpose of any computation under paragraph
(ii), (iii), (iv) or (v) of this Section 3(c), the current market price
per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices for the five consecutive trading days
ending with and including the date in question; provided, however, that
(A) if the "ex" date (as hereinafter
defined) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the
conversion price pursuant to paragraph (i), (ii), (iii), (iv) or (v)
above ("Other Event") occurs after the third trading day prior to the
date in question and prior to the "ex" date for the issuance or
distribution requiring such computation (the "Current Event"), the
closing price for each trading day prior to the "ex" date for such
Other Event shall be adjusted by multiplying such closing price by the
same fraction by which the conversion price is so required to be
adjusted as a result of such Other Event, (B) if the "ex" date for any
Other Event occurs after the "ex" date for the Current Event and on or
prior to the date in question, the closing price for each trading day
on and after the "ex" date for such Other Event shall be adjusted by
multiplying such closing price by the reciprocal of the fraction by
which the conversion price is so required to be adjusted as a result of
such Other Event, (C) if the "ex" date for any Other Event occurs on
the "ex" date for the Current Event, one of those events shall be
deemed for purposes of clauses (A) and (B) of this proviso to have an
"ex" date occurring prior to the "ex" date for the other event, and (D)
if the "ex" date for the Current Event is on or prior to the date in
question, after taking into account any adjustment required pursuant to
clause (B) of this proviso, the closing price for each trading day on
or after such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value on the date in question (as
determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for purposes of
paragraph (iv) or (v) of this Section 3(c), whose determination shall
be conclusive and described in a resolution of the Board of Directors)
of the portion of the rights, warrants, evidences of indebtedness,
shares of capital stock or assets being distributed applicable to one
share of Common Stock. For purposes of this paragraph, the term "ex"
date, (1) when used with respect to any issuance or distribution, means
the first date on which the Common Stock trades regular way on the
relevant exchange or in the relevant market from which the closing
price was obtained without the right to receive such issuance or
distribution and (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which
the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes
effective.
5. That, as corrected, Section 6(f) of the Original Certificate
shall be and read as follows:
(f) TERM. Each director elected by the holders of shares
of Convertible Preferred Stock shall continue to serve as a director
until such time as (i) his successor shall have been duly elected and
shall qualify or (ii)
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all dividends accrued and unpaid on the Convertible Preferred Stock
shall have been paid or declared and funds set aside to provide for
payment in full, at which time the term of office of all persons
elected as directors by the holders of shares of Convertible Preferred
Stock shall forthwith terminate and the number of members of the Board
of Directors of the Corporation shall be reduced accordingly. Whenever
the term of office of the directors elected by the holders of
Convertible Preferred Stock voting as a class shall end and the special
voting powers vested in the holders of Convertible Preferred Stock as
provided in this Section 6 shall have expired, the number of directors
shall be such number as may be provided for in the By-Laws irrespective
of any increase made pursuant to the provisions of this Section 6.
6. That, as corrected, the third paragraph of Section 8 of the
Original Certificate shall be and read as follows:
The voluntary sale, conveyance, lease, exchange or transfer of
all or substantially all of the property or assets of the Corporation,
or the merger or consolidation of the Corporation into or with any
other corporation, or the merger of any other corporation into the
Corporation, or any purchase or redemption of some or all of the shares
of any class or series of stock of the Corporation, shall not be deemed
to be a Liquidation of the Corporation for purposes of this Section 8
(unless in connection therewith the Liquidation of the Corporation is
specifically approved).
7. That, as corrected, the third paragraph of Section 10 of the
Original Certificate shall be and read as follows:
Subject to applicable escheat laws, if the conditions
precedent to the disbursement of any funds deposited by the Corporation
pursuant to this Section 10 shall not have been satisfied within six
months after the later of (a) the redemption payment date and (b) the
establishment of the trust for such funds, then (i) such funds shall be
returned to the Corporation upon its request; (ii) after such return,
such funds shall be free of any trust which shall have been impressed
upon them; (iii) the person entitled to this payment for which such
funds shall have been originally intended shall have the right to look
only to the Corporation for such payment, subject to applicable escheat
laws; and (iv) the trustee which shall have held such funds shall be
relieved of any responsibility for such funds upon the return of such
funds to the Corporation.
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IN WITNESS WHEREOF, this Statement of Correction has been made under
the hand of the undersigned, the President of the Corporation, this 27th day of
November, 1995.
CALLON PETROLEUM COMPANY
By /s/ Fred L. Callon
-------------------------
Fred L. Callon, President
Attest
By /s/ H. Michael Tatum, Jr.
--------------------------
H. Michael Tatum, Jr.
Secretary
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 01:00 PM 04/07/2000
001178331 - 2390003
CERTIFICATE OF
DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES B PREFERRED STOCK
OF
CALLON PETROLEUM COMPANY
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware
We, Fred L. Callon, President, and Robert A. Mayfield, Secretary, of
Callon Petroleum Company (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (UK "GCL"),
in accordance with the provisions of Section 103 of the GCL, DO HEREBY CERTIFY;
That pursuant to the authority conferred upon the Board of Directors
(the "Board") by the Certificate of Incorporation of the Corporation, as
amended, the said Board on March 30, 2000, adopted the following resolutions
creating a series of one hundred thousand shares of Preferred Stock, par value
$0.01 per share, designated as Series B Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board In
accordance with the provisions of its Certificate of Incorporation, as amended,
the Board does hereby create, authorize and provide for the issuance upon the
exercise of the Corporation's Preferred Stock Purchase Rights, of a series of
Preferred Stock of the Corporation, and does hereby fix and state that the
designations, amounts, powers, preferences and relative and other special rights
and the qualifications, limitations or restrictions thereof are as follows:
SERIES B PREFERRED STOCK
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as Series B Preferred Stock and the number of shares
constituting such series shall be 100,000.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series B Preferred Stock with respect to dividends,
the holders of shares of Series B Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for that purpose, quarterly dividends payable to cash on the 1st day
of July, October, January, April, in each year commencing July 1, 2000 (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b)
subject to the provision for adjustment hereinafter set forth, one thousand
(1,000) times the aggregate per share amount of all cash dividends, and one
thousand (1,000) times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of the common stock of the Corporation, par value $0.01 per share ("the
Common Stock"), or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise),
declared on the Common Stock, since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series B
Preferred Stock. In the event the Corporation shall at any time after March 30,
2000 (the "Rights Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
than in each such case the amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
B Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than thirty
(30) days prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, share of Series B Preferred Stock shall entitle the holder thereof to
one thousand (1,000) votes on all matters submitted to a vote of the
stockholder of the Corporation. In the event the Corporation Shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series B Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction the numerator of which is
the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of sham
of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series B Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation. Except as otherwise provided herein or by
law, the holders of the shares of Series B Preferred Stock shall not be entitled
to vote as a separate class on any matters submitted to a vote of the
stockholders.
(C) (i) If at any time dividends on any Series B
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the holders of the Series B Preferred Stock, voting at a
separate series from all other series of Preferred Stock and classes of capital
stock, shall be entitled to elect two members of the Board of Directors in
addition to any directors elected by any other series, class or classes of
securities, and the authorized number of directors will automatically be
increased by two. Promptly thereafter, the Board of Directors of this
Corporation shall, as soon as may be practicable, call a special meeting of
holders of Series B Preferred Stock for the purpose of electing such members of
the Board of Directors. Said special meeting shall in any event be held within
45 days of the occurrence of such arrearage.
(ii) During any period when the holders of Series
B Preferred Stock, voting as a separate series, shall be entitled and shall have
exercised their right to elect two directors, then and during such time as such
right continues (a) the then authorized number of directors shall be increased
by two, and the holders of Series B Preferred Stock, voting as a separate
series, shall be entitled to elect the additional directors so provided for, and
(b) each such additional director shall not be a member of any existing class of
the Board of Directors, but shall serve until the next annual meeting of
stockholders for the election directors, or until his successor shall be elected
and shall qualify, or until his right to hold such office terminates pursuant to
the provisions of this Section 3(C).
(iii) A director elected pursuant to the terms
hereof may be removed with or without cause by the holders of Series B Preferred
Stock entitled to vote in an election of such Director.
(iv) If during any interval between annual
meetings of stockholders for the election of directors and while the holders of
Series B Preferred Stock shall be entitled to elect two directors, there is no
such director in office by reason of resignation, death or removal, then,
promptly thereafter, the Board of Directors shall call a special meeting of the
holders of Series B Preferred Stock for the purpose of filling such vacancy and
such vacancy shall be filled at such special meeting. Such special meeting shall
in any event be held within 90 days of the occurrence of such vacancy, unless an
annual meeting of stockholders is scheduled during such 90-day period.
(v) At such time as the arrearage is My cured,
and all dividends accumulated and unpaid on any shares of Series B Preferred
Stock outstanding are paid, and, in addition thereto, at least one regular
dividend has been paid subsequent to curing such arrearage, the term of office
of any directors elected pursuant to this Section 3(C), or his successor, shall
automatically terminates, and the authorized number of directors shall
automatically decrease by two, the rights of the holders of the shares of the
Series B Preferred Stock to vote as provided in
this Section 3(C) shall cease, subject to renewal from time to time upon the
same terms and conditions, and the holders of shares of the Series B Preferred
Stock shall have only the limited voting rights elsewhere herein set forth.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of (stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to, the Series B Preferred Stock:
(ii) declare or pay dividends on, or make any
other distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock, except dividends paid ratably on the Series B Preferred Stock
and all such junior stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either is to dividends or
upon liquidation, dissolution or winding up) with the Series B Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Preferred Stock; or
(iv) purchase not otherwise acquire for
consideration any shares of Series B Preferred Stock, or any shares of stock
ranking on a parity with the Series B Preferred Stock, except in accordance with
purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranting junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $180 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series B Liquidation Preference"), plus the Series B Pro Rata Liquidation
Preference, as defined below. The "Series B Pro Rata Liquidation Preference"
means the ratable and proportionate share of to assets to be distributed to the
holders of Series B Preferred Stock after subtracting (i) the amount of the
Series B Liquidation Preference to be distributed to the holders of shares of
Series B Preferred Stock as provided in the previous sentence and (ii) the
amount of the Common Adjustment to be distributed to the holders of shares of
Common Stock, as provided in the next sentence, in the ratio of the Adjustment
Number (as defined below) to one (1) with respect to all outstanding shares of
Preferred Stock and Common Stock, on a per share basis, respectively. Following
the payment of the full amount of me Series B Liquidation Preference and the
Series B Pro Rata Liquidation Preference, the holders of shares of Common Stock
shall receive an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series B Liquidation Preference by (ii)
one thousand (1,000) (as appropriately adjusted as set forth in paragraph (C) of
this Section to reflect such events as stock spirits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii)
immediately above being referred to as the "Adjustment Number"). Following the
payment of the full amount of the Series B Liquidation Preference, the Series B
Pro Rata Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series B Preferred Stock and Common Stock, respectively,
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Series B Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In me event,
however, that there are not sufficient assets available to permit payment in
full of fee Common Adjustment, than such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock an exchanged for or changed into other stock,
securities, cash or any other property, then in any such case the shares of
Series B Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one thousand (1,000) times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (ii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
SECTIONS 8. REDEMPTION. The outstanding shares of Series B
Preferred Stock may be redeemed at the option of the Board of Directors as a
whole, but not in part, at any time, or from to time to time, at a cash price
per share equal to one hundred five percent (105%) of (i) the product of the
Adjustment Number times the Average Market Value (as such term hereinafter
defined) of the Common Stock, plus (ii) all dividends which on the redemption
date have accrued on the shares to be redeemed and have not been paid, or
declared and a sum sufficient for the payment thereof set apart, without
interest The "Average Market Value" is the average of the closing sale prices of
the Common Stock during the thirty (30) day period immediately preceding the
date before the redemption date on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934, as amended, on which such stock is listed,
or, if such stock is not listed on any such exchange, the average of the closing
sale prices with respect to a share of Common Stock during such thirty (30) day
period, as quoted on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no such quotations
are available, the fair market value of the Common Stock as determined by the
Board of Directors in good faith.
SECTION 9. RANKING. The Series B Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment at dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
SECTION 10. AMENDMENT. Except as otherwise provided in the
Certificate of Incorporation, as amended, or by law, the Certificate of
Incorporation of the Corporation, as amended, shall not be further amended in
any manner which would materially after or change the powers, preferences or
special rights of the Series B Pretend Stock so as to affect them
diversely without the affirmative vote of the holders of a majority or more of
the outstanding shares of Series B Preferred Stock, voting separately as a
class.
SECTION 11. FRACTIONAL SHARES. At the Corporation's sole
discretion, Series B Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series B Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true as of March 30, 2000.
/s/ Fred L. Callon
------------------------------
Fred L. Callon, President
Attest:
/s/ Robert A. Mayfield
- -----------------------------
Robert A. Mayfield, Secretary