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EXHIBIT 4.3
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
COMSTOCK RESOURCES, INC.
We, M. Jay Allison, President, and Robert L. Cook, Secretary, of
Comstock Resources, Inc., a corporation organized and existing under the
General Corporation Law of the State of Nevada (the "Corporation"), DO HEREBY
CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation of the Corporation, the Board of Directors on
December 4, 1990, adopted the following resolution creating a series of one
hunderd-fifty thousand (150,000) shares of Preferred Stock, ten dollars
($10.00) par value per share (the "Preferred Stock"), designated as Series A
Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation in accordance with the
provisions of its Articles of Incorporation, a series of
Preferred Stock of the Corporation be, and it hereby is, created and
that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special
rights of such series, and the qualifications, limitations or
restrictions thereof are as follows:
SECTION 1
DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Series A
Junior Participating Preferred Stock" and the number of shares
constituting such series shall be 150,000.
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 A Junior Participating Preferred Stock
with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock shall be entitlted to receive, when, as
and if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Divident Payment Date
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after the first issuance of a share or a fraction of a share of Series
A Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $37.50 or
(b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100
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 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 A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after December 4, 1990 (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 amount to which holders of shares
of Series A Junior Participating 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 immediatley 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 A Junior Participating Preferred Stock as
provided in the preceding paragraph immediatley 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 $37.50
per share on the Series A Junior Participating 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 A Junior Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceidng the date of
issue of such shares of Series A Junior Participating 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
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determination of holders of shares of Series A Junior Participating
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 A Junior
Participating 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 A Junior
Participating Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
SECTION 3
VOTING RIGHTS
The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to one hundred votes on all matters
submitted to a vote of the stockholders 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 A Junior Participating 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 shares of Common
Stock that were outstanding immediately prior to such event.
(B) In addition to such voting rights as may from time to
time be required by the laws of Nevada, the holders of Series A Junior
Participating Preferred Stock shall vote at such times and in a like
manner as holders of Common Stock may vote, one hundred votes for each
share of Series A Junior Participating Preferred Stock held, and all
shares of the Corporation shall be voted as a single class, except
where specifically required by law to vote separately.
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SECTION 4
CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Junior Participating
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 A Junior Participatig Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not:
(i) declare or pay dividends on, make any
other distributions on (other than dividends or distributions
in shares of stock junior to the Series A Junior Participating
Preferred Stock), 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 A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on (other than dividends or distributions
in shares of stock junior to the Series A Junior Participating
Preferred Stock) any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity 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) except as permitted by subparagraph
(iv) immediately below, redeem or purchase or otherwise
acquire for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating 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 A Junior Participating Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance with a
purchase offer made in
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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 A Junior Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled 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 ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto,
the holders of shares of Series A Junior Participating Preferred Stock
shall have received the greater of (a) $1,500.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment or (b) an amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to be distributed per
share to holders of Common Stock. 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
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amount to which holders of shares of Series A Participating Junior
Preferred Stock were entitled immediately prior to such event pursuant
to 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) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A liquidation
preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series A
Junior Participating Preferred Stock, then such assets shall be
distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences.
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 are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time
be similarly exchanged or changed into an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to 100
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 (iii)
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 A Junior
Participating 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.
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SECTION 8
OPTIONAL REDEMPTION
(A) The Corporation shall have the option to redeem the whole
or any pat of the Series A Junior Participating Preferred Stock at any
time at a redemption price equal to the greater of (x) $1,500.00 per
share or (y) 100 times the "current per share market price" of the
Common Stock on the date of the mailing of the notice of redemption,
plus unpaid accumulated dividends to the date of such redemption. 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 amount to which holders of shares
of Series A Junior Participating Preferred Stock were otherwise
entitled immediately prior to such event 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. The
"current per share market price" on any date shall be deemed to be the
average of the closing price per share of such Common Stock for the 10
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common
Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock
is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use or, if on
any such date the Common Stock is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected
by the Board of Directors of the Corporation. If on such date no such
market maker is making a market in the Common Stock, the fair value of
the Common Stock on such date as determined in good faith by the Board
of Directors of the Corporation shall be used. The term "Trading Day"
shall mean a day on which the principal
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national securitites exchange or association on which the Common Stock
is listed or admitted to trading is open for the transaction of
business or, if the Common Stock is not listed or admitted to trading
on any national securities exchange association, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the
State of Texas are not authorized or obligated by law or executive
order to close.
(B) Notice of any such redemption shall be given by mailing
to the holders of the Series A Junior Participating Preferred Stock a
notice of such redemption, first class postage prepaid, not later than
the thirtieth day and not earlier than the sixtieth day before the
date fixed for redemption, at their last address as the same shall
appear upon the books of the Corporation. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have
been duly given, whether or not the shareholder received such notice,
and failure duly to give such notice by mail, or any defect in such
notice to any holder of Series A Junior Participating Preferred Stock
shall not affect the validity of the proceedings for the redemption of
such Series A Junior Participating Preferred Stock.
(C) If less than all the outstanding shares of the Series A
Junior Participating Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors
and the shares to be redemmed shall be determined by lot or pro rata
or in such other fair and equitable manner as may be prescribed by
resolution of the Board of Directors.
(D) The notice of redemption to each holder of Series A
Junior Participating Preferred Stock shall specify (a) the number of
shares of Series A Junior Participating Preferred Stock of such holder
to be redeemed, (b) the date fixed for redemption, (c) the redemption
price and (d) the place of payment of the redemption price.
(E) If any such notice of redemption shall have been duly
given or if the Corporation shall have given to the bank or trust
company hereinafter referred to irrevocable written authorization
promptly to give or complete such notice, and if on or before the
redemption date specified therein the funds necessary for such
redemption shall have been deposited by the Corporation with the bank
or trust company designated in such notice, doing business in the
United States of America and having a capital surplus and undivided
profits aggregating at least $25,000,000 according to its last
published statement of condition, in trust for the benefit of the
holders of Series A Junior Participating Preferred Stock called for
redemption, then, notwithstanding that any certificate for such share
so called for redemption
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shall not have been surrendered for cancellation, from and after the
time of such deposit all such shares called for redemption shall no
longer be deemed outstanding and all rights with respect to such
shares shall no longer be deemed outstanding and all rights with
respect to such shares shall forthwith cease and terminate, except the
right of the holders thereof to receive from such bank or trust company
at any time after the time of such deposit the funds so deposited,
without interest, and the right to exercise, up to the close of
business on the fifth day before the date fixed for redemption, all
privileges of conversion or exchange, if any. In case less than all
the shares represented by any surrendered certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares.
Any interest accrued on such funds shall be paid to the Corporation
from time to time. Any funds so deposited and unclaimed at the end of
six years from such redemption date shall be repaid to the
Corporation, after which the holders of shares of Series A Junior
Participating Preferred Stock called for redemption shall look only to
the Corporation for payment thereof; provided that any funds so
deposited which shall not be required for redemption because of the
exercise of any privilege of conversion or exchange subsequent to the
date of deposit shall be repaid to the Corporation forthwith.
SECTION 9
RANKING
The Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to
the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
SECTION 10
AMENDMENT
So long as any share of Series A Junior Participating Preferred
Stock are outstanding, the Articles of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
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SECTION 11
FRACTIONAL SHARES
Series A Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to
such holders' fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred
Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under penalties of perjury as of this 6th
day of December, 1990.
/s/ M . JAY ALLISON
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M. Jay Allison
President
Attest:
/s/ ROBERT L. COOK
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Robert L. Cook
Secretary