CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER RIGHTS, AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS THEREOF, OF $0.925 SERIES D
NON-CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
ONEOK, INC.
PURSUANT TO SECTION 1032 OF THE
GENERAL CORPORATION ACT OF THE STATE OF OKLAHOMA
ONEOK, INC., an Oklahoma corporation (the "Corporation"), does hereby
certify that the Board of Directors of the Corporation duly adopted the
following resolution, at a meeting duly convened and held on [________ __,]
2003, in respect of a series of Preferred Stock, par value $0.01 per share, of
the Corporation, pursuant to authority conferred upon the Board by Article
Fourth of the Certificate of Incorporation of the Corporation and in accordance
with Section 1032 of the General Corporation Act of the State of Oklahoma:
BE IT RESOLVED, that the issuance of a series of Preferred Stock of the
Corporation is hereby authorized, and the designation, amount, powers,
preferences and relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof, of the shares of such
series of Preferred Stock of the Corporation, are hereby fixed as follows:
1. Designation; Class and Amount; Certain Definitions. The Preferred Stock,
the issuance of which is hereby authorized, shall comprise [ ](1) shares the
distinctive serial designation of which shall be "$0.925 Series D Non-Cumulative
Convertible Preferred Stock" which is sometimes herein referred to as "Series D
Preferred Stock." The number of shares of Series D Preferred Stock which are
purchased or otherwise acquired by the Corporation or converted into Common
Stock shall be canceled and shall revert to authorized but unissued shares of
Series D Preferred Stock. Certain capitalized terms used herein have the
meanings specified therefor in Section 11 below.
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1 Will be 39,892,896 less two times the number of shares of Series A
Preferred Stock repurchased by the Corporation.
2. Dividends; Priority
(a) Payments of Dividend; Series D Preferred Stock. Each Holder of shares
of Series D Preferred Stock shall be entitled to receive, when and if declared
by the Board, in respect of each share of Series D Preferred Stock, out of the
funds of the Corporation legally available therefor, for each Dividend Period or
portion thereof, quarterly cash dividends in an amount per share equal to
$0.23125 from and after the date of issuance of the shares of Series D Preferred
Stock (the "Issue Date"), as long as the shares of Series D Preferred Stock
remain outstanding. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on shares of Series D
Preferred Stock, which are not paid.
(b) Payment and Record Dates. Dividends accrued on the Series D Preferred
Stock in respect of each Dividend Period shall be payable, when and if declared
by the Board in arrears within thirty-one (31) days after each date of payment
(each such later date, a "Dividend Payment Date") by the Corporation of
quarterly cash dividends on the Common Stock in respect of such Dividend Period;
provided, however, that if any such day is not a Business Day the applicable
Dividend Payment Date shall be the next succeeding day that is a Business Day;
and provided, further that if no quarterly cash dividends are paid on the Common
Stock in respect of any such Dividend Period, the Dividend Payment Date shall
mean such date as may be determined by the Board within three months following
the end of such Dividend Period; provided, however, dividends payable with
respect to the Dividend Period immediately following the Issue Date shall accrue
from the Issue Date. Dividends on the Series D Preferred Stock shall accrue on a
daily basis from the commencement of each Dividend Period. Dividends will cease
to accrue in respect of any shares of Series D Preferred Stock on the Surrender
Date in respect of a conversion pursuant to Section 8(a) or on the Redemption
Date in respect of a redemption. Dividends payable on the Series D Preferred
Stock for any Dividend Period constituting less than a full fiscal quarter shall
be computed ratably on the basis of a 360-day year of twelve (12) 30-day months.
Dividends for any Dividend Period shall not be cumulative to the extent not paid
in full on each Dividend Payment Date. Dividends on the Series D Preferred Stock
in respect of any Dividend Period unpaid as of the Dividend Payment Date for
such Dividend Period shall permanently remain unpaid. The foregoing
notwithstanding, dividends on account of arrears for any past Dividend Periods
may be declared and paid at any time, without reference to any regular Dividend
Payment Date. Dividends shall be payable to the Holders as they appear on the
Stock Books not exceeding forty (40) days preceding the relevant Dividend
Payment Date. Dividends shall be paid in cash, by wire transfer in immediately
available funds to the accounts designated by the respective Holders in written
notices given to the Corporation at least five (5) Business Days prior to the
payment date or by such other means as may be agreed to by the Corporation and
the respective Holders, such wire transfer to be effected for good value on or
before the Dividend Payment Date.
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(c) Special Dividends; Notice. Notwithstanding anything in this Certificate
of Designations to the contrary, the holders of the Series D Preferred Stock
shall participate in all Special Dividends on a share-for-share basis with the
holders of Common Stock, as if shares of the Series D Preferred Stock were
converted into Common Stock immediately prior to the record date with respect to
each such Special Dividend.
(d) Priority as to Dividends; Restriction on Dividends, Redemption, etc.
The Corporation shall not, for so long as the Series D Preferred Stock shall
remain outstanding, directly or indirectly, declare or pay or set apart for
payment any dividends (including cumulative dividends) or make (or permit any
Subsidiary to make) any other distributions on, or payment on account of the
purchase, redemption or other retirement or acquisition for value of the Common
Stock, any other capital stock of the Corporation ranking junior to the Series D
Preferred Stock as to dividends or as to distribution of assets upon any
liquidation, dissolution or winding-up of the affairs of the Corporation or any
options, warrants or rights to purchase or acquire Common Stock or any such
capital stock or any securities convertible into or exchangeable for shares of
Common Stock or any such capital stock, except that such payment of dividends
and such other distributions and payments may be made so long as full dividends
payable on the Series D Preferred Stock for the Dividend Period commencing
immediately prior to the date of such dividend, distribution or other payment
have been or are concurrently paid (or a sum sufficient for the payment thereof
set apart for such payment subject to declaration thereof); provided, however,
that the foregoing restrictions shall not apply to: (i) any dividend payable
solely in shares of any stock of the Corporation ranking, as to dividends and as
to distribution of assets upon any liquidation, dissolution or winding-up of the
affairs of the Corporation, junior to the Series D Preferred Stock (or payable
solely in options, warrants or rights to purchase or acquire any such stock) or
(ii) any distribution pursuant to any employee or director incentive or benefit
plan or arrangement (including any employment, severance or consulting
agreement) of the Corporation or any Subsidiary heretofore or hereafter adopted
or (iii) any distribution pursuant to a redemption, at the stated redemption
price, of any rights granted to Holders of Common Stock pursuant to a
stockholder rights plan or (iv) any dividend approved in writing by the holders
of at least 66 2/3 percent of all shares of Series D Preferred Stock then
outstanding. Holders of shares of Series D Preferred Stock shall be entitled to
receive dividends in accordance with the foregoing clause (a) of this Section 2
in preference to and in priority over any dividend upon any securities junior to
the Series D Preferred Stock.
3. Voting Rights. Holders of shares of Series D Preferred Stock, voting
together as a single class with holders of shares of Common Stock (and with
holders of any other class or series of stock which may similarly be entitled to
vote with the holders of Common Stock) shall be entitled at any meeting of
stockholders called for the purpose of voting on (or acting by written consent
without need of any advance notice) (i) any proposed amendment to the
Certificate of Incorporation or By-laws which would reasonably have the effect
of modifying in any way Section 1, Article Twelfth of the Amended Certificate of
In-
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corporation of the Corporation dated January 15, 1998, electing that Sections
1145 through 1155 of Title 18 of the Oklahoma General Corporation Law (the
"Control Share Acquisition Statute") shall not apply to the Corporation, or
would reasonably cause the Corporation to become subject to (a) the Control
Share Acquisition Statute or (b) any other provisions which are substantially
similar to the Control Share Acquisition Statute, to abstain or vote for or
against such amendment and (ii) any transaction or series of transactions
submitted to a vote of the stockholders of the Corporation which, if
consummated, would constitute a Change in Control, to vote with respect to such
transaction(s). When voting together with the holders of shares of Common Stock
on any such transaction(s), each share of Series D Preferred Stock shall carry,
as of the record date applicable to such vote, a number of votes equal to the
number of votes carried in the aggregate by the number of shares of Common Stock
issuable upon conversion of one share of Series D Preferred Stock into Common
Stock in accordance with Section 8 below.
(a) Except as provided by this Section 3 and Sections 4 and 9 below, or as
otherwise may be required by applicable law, the Holders of Series D Preferred
Stock shall not be entitled, by virtue of their being Holders thereof, to vote
in any election of directors to the Board of the Corporation, or with respect to
any other matter submitted to the stockholders of the Corporation. Where a vote
of the Holders, voting as a separate class, may be required by applicable law or
by this Section 3 or Section 4 or 9, each share of Series D Preferred Stock
shall carry one vote.
4. Covenants. So long as any shares of Series D Preferred Stock are
outstanding, the Corporation covenants and agrees with and for the benefit of
the Holders of such shares that without the affirmative vote or consent of
Holders of 66 2/3 percent of all shares of the Series D Preferred Stock then
outstanding, voting as a separate class in person or by proxy or by written
consent delivered to the Secretary of the Corporation, the Corporation shall not
amend, alter or repeal any provision of the Certificate of Incorporation of the
Corporation, this Certificate of Designations, or any amendment or supplement to
any of the foregoing, so as to affect adversely the rights, powers, preferences,
qualifications, limitations or restrictions of any Holder of Series D Preferred
Stock.
5. Optional Redemption. Subject to the rights of Holders of shares of
Series D Preferred Stock set forth in Section 8 hereof, the Corporation may, at
its option, redeem, in the manner provided for in Section 6 hereof, on or after
August 1, 2006, all or a portion of the shares of Series D Preferred Stock at
the Redemption Price per share if the Closing Price of the Common Stock has
exceeded $25.00 for 30 consecutive Trading Days prior to the date notice is
given by Corporation pursuant to Section 6 hereof of its intention to redeem all
or a portion of the shares of Series D Preferred Stock pursuant to this Section
5. The "Redemption Price" shall equal the product of (x) $20.00 and (y) the
number of shares of Common Stock then issuable upon the conversion of one share
of Series D Preferred Stock.
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(a) Procedure for Redemption. (i) In the event that the Corporation shall
redeem shares of Series D Preferred Stock pursuant to Section 5 hereof, notice
of such redemption (a "Redemption Notice") shall be mailed by first-class mail,
postage prepaid, not less than 30 days nor more than 90 days, except as provided
below, prior to the redemption date (the "Redemption Date") described in such
notice, to the Holders of record of shares to be redeemed at their respective
addresses as they shall appear in the records of the Corporation; provided,
however, that failure to give such notice or any defect therein or the mailing
thereof shall not affect the validity of the proceeding for the redemption of
any shares so to be redeemed except as to the Holder to whom the Corporation has
failed to give such notice or except as to the Holder to whom notice was
defective. Each such notice shall state: (A) the Redemption Date; (B) the number
of shares of Series D Preferred Stock to be redeemed; (C) the Redemption Price;
(D) the place or places where certificate for such shares are to be surrendered
for payment of the redemption price; (E) that dividends on the shares to be
redeemed ceased to accrue as of the date of such notice; and (F) that the
Holder's right to convert such shares into shares of Common Stock shall
terminate on the close of business on the second Business Day preceding such
Redemption Date. In the event that the Corporation has delivered a Redemption
Notice to the Shareholder and the Shareholder is then precluded under Section
4.2(a), (b) or (c) of the Registration Rights Agreement from effecting an
underwritten offering of Common Stock or Series D Preferred Stock, then the
Redemption Date shall automatically be extended until the ninety-first (91st)
day following the date that the restrictions set forth in Section 4.2(a), (b) or
(c) of the Registration Rights Agreement have expired.
(i) In the event that fewer than all shares of Series D Preferred Stock
represented by a surrendered certificate are to be redeemed hereunder, a new
certificate shall be issued at the Corporation's expense representing the shares
of Series D Preferred Stock not so redeemed.
(ii) Effective on the Redemption Date, any shares of Series D Preferred
Stock redeemed shall no longer be deemed outstanding, all rights of the Holders
thereof as preferred stockholders of the Corporation shall cease and thereupon
the certificate(s) theretofore representing shares of Series D Preferred Stock
shall represent only the right to receive the Redemption Price in respect
thereof.
6. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
Holders of shares of Series D Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its stockholders an amount per share in cash equal to the amount that would be
payable on one share of Common Stock (such amount payable being adjusted
appropriately to reflect any stock split, stock dividend, reverse stock split,
or any transaction with comparable effect upon the Common Stock and assuming
conversion of all shares of Series D Preferred Stock then outstanding into
shares of Common Stock immedi-
-5-
ately prior to such liquidation, dissolution or winding-up), plus all dividends
then due on the Series D Preferred Stock (the "Liquidation Preference"). This
entitlement of the Holders of shares of Series D Preferred Stock shall be
satisfied before any similar payment shall be made or any assets distributed to
the holders of the Common Stock or any other security junior in rank to the
Series D Preferred Stock as to distribution of assets upon such dissolution,
liquidation or winding-up. If the assets of the Corporation are not sufficient
to pay in full the liquidation payments payable to all of the Holders of the
outstanding shares of Series D Preferred Stock, then the Holders of all such
shares shall share ratably in such distribution of assets in accordance with the
respective liquidation preferences to which they are entitled. For the purposes
of this section, neither the voluntary sale, conveyance, exchange or transfer
(for cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with one or more other corporations
shall be deemed to be a liquidation, dissolution or winding-up, voluntary or
involuntary, unless such voluntary sale, conveyance, exchange or transfer shall
be in connection with a dissolution or winding up of the business of the
Corporation.
7. Conversion.
(a) Conversion Right. The Holder of any share or shares of Series D
Preferred Stock shall have the right, at any time, at such Holder's option, to
convert, without the payment of additional consideration, each share of Series D
Preferred Stock held by that Holder into one fully paid and nonassessable share
of Common Stock (as adjusted pursuant to Section 8(c) hereof); provided,
however, that shares of the Series D Preferred Stock Beneficially Owned by any
member of the Shareholder Group shall not be convertible unless the aggregate of
the regular cash dividends for the fiscal year immediately prior to such
conversion that would have been payable with respect to all the shares of Common
Stock issuable upon the conversion of one share of Series D Preferred Stock is
greater than $0.925 (the "Conversion Threshold"); provided, further, that the
shares of Series D Preferred Stock Beneficially Owned by any member of the
Shareholder Group shall not be convertible if such conversion would have a
material adverse effect on the exemptions from the Public Utility Holding
Company Act of 1935, as amended, of the Corporation or any of its Subsidiaries
or Parent, the Shareholder or any affiliate of the Shareholder. Special or
extraordinary dividends shall not be taken into account in determining whether
the Conversion Threshold has been met. Notwithstanding anything in this Section
8(a) to the contrary, any member of the Shareholder Group may convert shares of
Series D Preferred Stock into shares of Common Stock at any time in connection
with, and immediately prior to, a Transfer pursuant to subsections (a), (c), and
(e) of Section 4.3 of the Shareholder Agreement.
(b) Conversion Procedures. Any Holder of shares of Series D Preferred Stock
desiring to convert such shares into Common Stock shall surrender the
certificate(s) evidencing such shares of Series D Preferred Stock of the Holder
at the office of the transfer
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agent appointed for the purpose of such conversion by the Corporation. Such
surrendered certificate(s), 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, and shall be accompanied by written
notice to the Corporation that the Holder elects so to convert such shares of
Series D Preferred Stock, which notice shall specify the name or names (with
address or addresses) in which the Holder wishes the certificate(s) evidencing
shares of Common Stock to be issued, in exchange for that certificate or those
certificates so surrendered.
(i) The Corporation shall, within five (5) Business Days after such
surrender of certificates evidencing shares of Series D Preferred Stock
accompanied by written notice and in compliance with any other conditions
contained herein, issue and deliver, or cause to be issued and delivered, to the
person(s) for whose account such certificate(s) evidencing shares of Series D
Preferred Stock were so surrendered, or to the nominee(s) of such Person(s),
certificates representing the number of full shares of Common Stock to which
such Person shall be entitled pursuant to the then-applicable conversion rate.
Such conversion shall be deemed to have been made on the date of such surrender
of the certificate(s) evidencing shares of Series D Preferred Stock to be
converted (the "Surrender Date") and the Person(s) entitled to receive the
Common Stock deliverable upon conversion of such Series D Preferred Stock shall
be treated for all purposes as the record holder(s) of such Common Stock on such
date and thereafter. Conversion of Series D Preferred Stock may otherwise be
achieved in accordance with such procedures as the Corporation and a majority of
the Holders may agree.
(ii) In the event that fewer than all shares of Series D Preferred Stock
represented by a surrendered certificate are to be converted hereunder, a new
certificate shall be issued at the Corporation's expense representing the shares
of Series D Preferred Stock not so converted.
(iii) Effective on the day following the Surrender Date, dividends shall
cease to accrue on any shares of Series D Preferred Stock surrendered for
conversion, such shares of Series D Preferred Stock shall no longer be deemed
outstanding, all rights of the Holders thereof as preferred stockholders of the
Corporation shall cease (other than the right to receive dividends declared or
otherwise payable to Holders of Series D Preferred Stock on a record date prior
to the Surrender Date) and thereupon the certificate(s) theretofore representing
shares of Series D Preferred Stock shall represent only the right to receive the
Common Stock deliverable upon conversion in respect thereof. If any shares of
Series D Preferred Stock are surrendered for conversion subsequent to the record
date preceding a Dividend Payment Date but on or prior to such Dividend Payment
Date (except shares called for redemption on a redemption date between such
record date and such Dividend Payment Date), the Holder of such shares at the
close of business on such record date shall be entitled to receive the dividend
payable on such shares on such Dividend Payment Date notwithstanding the
conversion thereof.
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(c) The conversion rate shall be adjusted from time to time as follows:
(i) In case the Corporation shall, at any time or from time to time while
any of the shares of Series D Preferred Stock are outstanding, (A) pay a
dividend in shares of its Common Stock, (B) subdivide its outstanding shares of
Common Stock into a larger number of shares, or (C) combine its outstanding
shares of Common Stock into a smaller number of shares, the conversion rate in
effect immediately prior to such action shall be adjusted so that the Holder of
any shares of Series D Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of Common Stock which such
Holder would have owned or have been entitled to receive immediately following
such action had such shares of Series D Preferred Stock been converted
immediately prior thereto. An adjustment made pursuant to this Section 8(c)(i)
shall become effective retroactively to immediately after the opening of
business on the Business Day following the record date in the case of a dividend
and shall become effective immediately after the opening of business on the
Business Day following the effective date in the case of a subdivision or
combination. If, as a result of an adjustment made pursuant to this Section
8(c)(i), the Holder of any shares of Series D Preferred Stock thereafter
surrendered for conversion shall become entitled to receive shares of two or
more classes of capital stock of the Corporation, the Board of Directors (whose
determination shall be conclusive) shall determine the allocation of the
adjusted conversion rate between or among shares of such classes of capital
stock.
(ii) In case the Corporation shall, at any time or from time to time while
any of the shares of Series D Preferred Stock are outstanding, issue rights or
warrants to all holders of shares of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock (or securities convertible into
or exchangeable for Common Stock) at a price per share less than the current
Market Price per share of Common Stock, at such record date, the conversion rate
shall be adjusted so that it shall equal the rate determined by multiplying the
conversion rate in effect immediately prior to the date of issuance of such
rights or warrants by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Common Stock offered for
subscription or purchase, and the denominator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of the
total number of shares so offered would purchase at such current market price.
For the purposes of this Section 8(c)(ii), the issuance of rights or warrants to
subscribe for or purchase securities convertible into Common Stock shall be
deemed to be the issuance of rights or warrants to purchase the shares of Common
Stock into which such securities are convertible at an aggregate offering price
equal to the aggregate offering price of such securities plus the minimum
aggregate amount (if any) payable upon conversion of such securities into shares
of Common Stock; provided, however, that if all of the shares of Common Stock
subject to such rights or warrants have not been issued when such rights or
warrants expire, then the conversion rate
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shall promptly be readjusted to the conversion rate which would then be in
effect had the adjustment upon the issuance of such rights or warrants been made
on the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights or warrants. The foregoing provision shall not apply to
issuances of rights pursuant to a stockholder rights plan provided that such
rights are issued together with the Common Stock upon conversion of the Series D
Preferred Stock. An adjustment made pursuant to this Section 8(c)(ii) shall
become effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(iii) In case the Corporation shall, at any time or from time to time while
any of the shares of Series D Preferred Stock are outstanding, distribute to all
holders of shares of its Common Stock evidences of its indebtedness or
securities or assets (excluding cash dividends payable out of consolidated
earnings or retained earnings or dividends payable in shares of Common Stock) or
rights or warrants to subscribe for securities of the Corporation or any of its
subsidiaries (excluding those referred to in Section 8(c)(ii)), then in each
such case the conversion rate shall be adjusted so that it shall equal the rate
determined by multiplying the conversion rate in effect immediately prior to the
date of such distribution by a fraction, the numerator of which shall be the
current Market Price per share of the Common Stock on the record date referred
to below, and the denominator of which shall be such current market price per
share of the Common Stock less the then fair market value of the portion of the
assets or evidences of indebtedness or securities or assets so distributed or of
such subscription rights or warrants applicable to one share of Common Stock.
Such adjustment shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive such
distribution.
(iv) The Corporation shall be entitled at its option to make such
additional adjustments in the conversion rate, in addition to those required by
subsections 8(c)(i), 8(c)(ii) and 8(c)(iii), as shall be necessary in order that
any dividend or distribution in shares of stock, subdivision or combination of
shares of Common Stock, issuance of rights or warrants, evidences of
indebtedness or assets (other than cash dividends payable out of consolidated
earnings or retained earnings) referred to above, shall not be taxable to the
Holders of shares of Series D Preferred Stock.
(v) In any case in which this Section 8(c) shall require that an adjustment
be made retroactively immediately following a record date, the Corporation may
elect to defer (but only for five (5) Business Days following the filing of the
statement referred to in Section 8(c)(vii)) issuing to the holder of any shares
of this Series converted after such record date (A) the shares of Common Stock
and other capital stock of the Corporation issuable upon such conversion over
and above (B) the shares of Common Stock and other capital stock of the
Corporation issuable upon such conversion on the basis of the conversion rate
prior to adjustment.
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(vi) Notwithstanding any other provisions of this Section 8(c), the
Corporation shall not be required to make any adjustment of the conversion rate
(A) in respect of any Special Dividend in which the holders of Series D
Preferred Stock participate as provided in Section 2(c) or (B) unless such
adjustment would require an increase or decrease of at least 1% in such rate
(any lesser adjustment shall be carried forward and shall be made at the time of
and together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an increase or
decrease of at least 1% in such rate).
(vii) Whenever an adjustment in the conversion rate is required, the
Corporation shall forthwith place on file with its Transfer Agent a statement
signed by its Chief Executive Officer, Chief Financial Officer or a Vice
President and by its Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer, stating the adjusted conversion rate determined as provided herein.
Such statements shall set forth in reasonable detail such facts as shall be
necessary to show the reason and the manner of computing such adjustment.
Promptly after the adjustment of the conversion rate, the Corporation shall mail
a notice thereof to each holder of shares of Series D Preferred Stock.
(d) Reservation of Shares; etc. The Corporation shall at all times reserve
and keep available, free from preemptive rights, out of its authorized and
unissued 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 the Series D
Preferred Stock from time to time outstanding, solely for the purpose of
effecting such conversion. The Corporation shall, from time to time, in
accordance with the laws of the State of Oklahoma, increase the authorized
number of shares of Common Stock 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 Series D Preferred Stock.
(i) If any shares of Common Stock required to be reserved hereunder for
purposes of conversion 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 shall, in good faith and as expeditiously as
possible, cause such shares to be duly registered or approved as the case may
be. If the Common Stock is listed on the New York Stock Exchange or any other
national or foreign securities exchange, the Corporation shall, 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
Series D Preferred Stock.
(ii) The Corporation will pay any and all taxes that may be payable in
respect of the issuance or delivery of shares of Common Stock upon conversion of
shares of Series D Preferred Stock pursuant hereto. The Corporation shall not,
however, be required to
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pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in a name other than that in
which the shares of Series D Preferred Stock so converted were registered and no
such issuance or delivery shall be made unless and until the person requesting
such issuance 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.
(e) Reclassifications, Consolidations, Mergers or Sales of Assets. In case
of (i) any reclassification or change of outstanding shares of 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), (ii)
any consolidation or merger of the Corporation with one or more other
corporations (other than a consolidation or merger in which the Corporation is
the continuing corporation and which does not result in any reclassification or
change of outstanding shares of Common Stock issuable upon conversion of Series
D Preferred Stock), (iii) any sale or conveyance to another corporation or other
entity of all or substantially all of the property of the Corporation, or (iv)
any other transaction which would constitute a Change in Control of the
Corporation, then the Corporation, or such successor corporation or other
entity, as the case may be, shall make appropriate provision so that the holder
of each share of Series D Preferred Stock then outstanding shall have the right
to convert such share into the kind and amount of shares of stock or other
securities and property receivable upon such consolidation, merger, sale,
reclassification, change or conveyance by a holder of the number of shares of
Common Stock into which such shares of Series D Preferred Stock might have been
converted immediately prior to such consolidation, merger, sale,
reclassification, change or conveyance, subject to adjustment which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
Section 8(c). The provisions of this paragraph shall apply similarly to
successive consolidations, mergers, sales or conveyances.
8. Priority. The Series D Preferred Stock shall be senior in rank, both as
to dividends and as to distribution of assets upon any liquidation, dissolution
or winding-up of the affairs of the Corporation, to the Common Stock, or any
class of equity securities of the Corporation which by its terms are junior to
the Series D Preferred Stock, and shall not be junior in rank with respect to
any class or series of Preferred Stock that may be issued by the Corporation,
unless the Holders of 66 2/3 percent of the outstanding shares of the Series D
Preferred Stock shall consent to the creation, reclassification or authorization
of any class or series of the Corporation's capital stock ranking prior to the
Series D Preferred Stock as to dividends or as to distributions of assets upon
liquidation, dissolution or winding-up of the Corporation, whether voluntary or
involuntary, or any security convertible into shares of such class or series.
9. Notices. The Corporation shall provide notice to each Holder of any
action taken or proposed to be taken or any determination made by the
Corporation and/or the
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Shareholder under the terms of this Certificate of Designations. Notice of any
such action or determination by the Corporation and/or the Shareholder and all
other notices and other communications provided for in this Certificate of
Designations shall be delivered by facsimile and by reputable overnight courier,
(a) if to the Corporation, to:
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74103
Facsimile: (918) 588-7971
Attn: Chief Executive Officer
with a copy to:
ONEOK, Inc.
100 West Fifth Street
Tulsa, Oklahoma 74103
Facsimile: (918) 588-7971
Attn: General Counsel
or such other address as the Corporation shall have furnished to the Holders in
writing,
(b) if to a Holder and/or the Shareholder, to the address and facsimile
number of such Holder listed on the Stock Books of the Corporation.
10. Definitions. Certain capitalized terms are used herein as defined
below:
"Affiliate" shall mean, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such Person. For the purposes of
this definition, "control," when used with respect to any particular Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Beneficial Owner" (and, with correlative meanings, "Beneficially Own" and
"Beneficial Ownership") of any interest means a Person who, together with his,
her or its Affiliates, is or may be deemed a beneficial owner of such interest
for purposes of Rule 13d-3 or 13d-5 under the Securities Exchange Act of 1934,
as amended, or who, together with his, her, or its Affiliates, has the right to
become such a beneficial owner
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of such interest (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding, or
upon the exercise, conversion or exchange of any warrant, right or other
instrument, or otherwise.
"Board" shall mean the Board of Directors of the Corporation in office at
the applicable time, as elected in accordance with the By-Laws of the
Corporation and with the Shareholder Agreement.
"Business Day" means any day other than a Saturday, a Sunday, a day on
which the New York Stock Exchange is closed or a day on which state or federally
chartered banking institutions in New York, New York are not required to be
open.
"By-Laws" shall mean the By-Laws of the Corporation, as they may be amended
from time to time.
"Certificate of Designations" means this Certificate of Designations,
Powers, Preferences and Relative, Participating, Optional or other Rights, and
the Qualifications, Limitations or Restrictions Thereof, creating the Series D
Preferred Stock.
"Certificate of Incorporation" shall mean the Certificate of Incorporation
of the Corporation, as it may be amended from time to time.
"Change in Control" shall mean the occurrence of any one of the following
events:
(1) any Person (other than the Shareholder and/or its Affiliates) becoming
the Beneficial Owner, directly or indirectly, 35% or more of the
Securities entitled to vote generally in the election of directors,
pursuant to the consummation of a merger, consolidation, sale of all
or substantially all of the Corporation's assets, share exchange or
similar form of corporate transaction involving the Corporation or any
of its subsidiaries that requires the approval of the Corporation's
shareholders, whether for such transaction or the issuance of
securities in such transaction; provided, however, that the event
described in this paragraph (1) shall not be deemed to be a Change in
Control if it occurs as the result of any of the following
acquisitions: (A) by any employee benefit plan sponsored or maintained
by the Corporation or any Affiliate, or (B) by any underwriter
temporarily holding Securities pursuant to an offering of such
Securities;
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(2) the consummation of a merger, consolidation, sale of all or
substantially all of the Corporation's assets, share exchange or
similar form of corporate transaction involving the Corporation or any
of its subsidiaries that requires the approval of the Corporation's
shareholders, whether for such transaction or the issuance of
securities in such transaction, unless immediately following such
transaction more than 50 percent of the total voting power of (x) the
corporation resulting from such transaction, or (y) if applicable, the
ultimate parent corporation that directly or indirectly has Beneficial
Ownership of 100 percent of the securities eligible to elect directors
of such resulting corporation, is represented by Securities entitled
to vote generally in the election of directors that were outstanding
immediately prior to such transaction (or, if applicable, shares into
which such Securities were converted pursuant to such transaction),
and such voting power among the holders of such Securities that were
outstanding immediately prior to such transaction is in substantially
the same proportion as the voting power of such Securities among the
holders thereof immediately prior to such transaction; or
(3) the consummation of a plan of complete liquidation or dissolution of
the Corporation.
"Closing Price" for each Trading 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 of the New York Stock
Exchange or, if the Common Stock is no longer listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to the principal national securities
exchange on which the Common Stock is then listed or admitted to trading or if
the Common Stock is no longer 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 Quotations 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 such
security selected by a majority of the Board or, if on any such date no market
maker is making a market in such security, the fair value as determined in good
faith by a majority of the Board based upon the opinion of an independent
investment banking firm of recognized standing.
"Common Stock" means the Common Stock of Oneok, Inc.
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"Control Share Acquisition Statute" has the meaning specified in Section
3(a) above.
"Corporation" has the meaning specified in the preamble.
"Dividend Payment Date" has the meaning specified in Section 2(b) above.
"Dividend Period" means the applicable period from (and including) the
Issue Date to the end of the first fiscal quarter after the Issue Date, and each
fiscal quarter thereafter.
"Holder" means a holder of record of a share or shares of Series D
Preferred Stock.
"Issue Date" has the meaning specified in Section 2(a) above.
"Liquidation Preference" has the meaning specified in Section 7 above.
The "Market Price" for the Common Stock shall mean the average of the
Closing Prices for such Common Stock for the twenty (20) Trading Days
immediately prior to the date on which the Market Price is being determined;
provided, however, that in the event that the current per share market price of
the Common Stock is determined during a period following the announcement by the
Corporation of (a) a dividend or distribution on the Common Stock payable in
shares of Common Stock or securities convertible into Common Stock or (b) any
subdivision, combination or reclassification of the Common Stock and prior to
the expiration of 20 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or the effects of such subdivision, combination or reclassification.
"Parent" means Westar Energy, Inc., a Kansas corporation.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization, government or any agency or political
subdivision thereof, or any other entity.
"Redemption Date" has the meaning specified in Section 6.
"Redemption Price" has the meaning specified in Section 5.
"Securities" shall mean any securities of the Corporation.
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"Series D Preferred Stock" has the meaning specified in Section 1 above.
"Shareholder" means Westar Industries, Inc., a Delaware corporation.
"Shareholder Agreement" means the Shareholder Agreement, dated as of
January __, 2003 among ONEOK, Parent and the Shareholder.
"Shareholder Group" shall mean Parent, the Shareholder, any Affiliate of
the Shareholder and any Person with whom any Shareholder or any Affiliate of any
Shareholder is part of a 13D Group.
"Special Dividend" means a dividend declared or paid on the Common Stock in
respect of a recapitalization, spin-off, reorganization or other extraordinary
transaction of the Corporation.
"Stock Books" means the stock transfer books of the Corporation relating to
its Common Stock and Preferred Stock.
"Subsidiary" shall mean, with respect to any corporation (the "ultimate
parent") any other corporation, association, or other business entity of which
more than 50% of the shares of the voting stock are owned or controlled,
directly or indirectly, by the ultimate parent or one or more Subsidiaries of
the ultimate parent, or by the ultimate parent and one or more of its
Subsidiaries.
"Surrender Date" has the meaning specified in Section 8(b)(ii) above.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business.
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IN WITNESS WHEREOF, ONEOK, INC. has caused this Certificate of Designations
to be made under the seal of the Corporation and signed and attested by the
undersigned officers of the Corporation this [___] day of [ ], 2003.
ONEOK, INC.
By:
-------------------------------------
Name:
Title:
(Corporate Seal)
Attest:
By:
-----------------------------
Name:
Title:
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