SIMON TRANSPORTATION SERVICES INC.
CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS
OF 600,000 SERIES I PREFERRED SHARES
Simon Transportation Services Inc., a corporation organized under the
laws of the State of Nevada (hereinafter called the "Corporation"), in
accordance with Section 78.1955 of the Nevada General Corporation Law, does
hereby certify as follows:
A. That pursuant to Article IV of the Articles of Incorporation of the
Corporation, the Corporation is authorized to issue 5,000,000 Preferred Shares,
par value one cent ($0.01) per share, and the Board of Directors of the
Corporation is expressly authorized to fix, to the extent permitted by Nevada
law and said Article IV the designation, description, and certain of the terms
with respect to each particular series of Preferred Shares.
B. That the Equity Issuance Committee of the Board of Directors of the
Corporation, acting pursuant to the Corporation's Bylaws and the Nevada General
Corporation Law, by unanimous written consent dated June 30, 2001, duly adopted
a resolution authorizing the issuance of up to 600,00 shares of the
Corporation's one cent ($0.01) per share, authorized and unissued, Preferred
Shares designated as "Series I Preferred Shares", and fixed the preferences, and
relative, participating, optional, and special rights and limitations and
restrictions thereof as follows:
1. Voting Rights. Except as herein or by law expressly
provided, each share of the Series I Preferred Shares shall have the right or
power to cast ten votes on any question or in any proceeding or to be
represented at or to receive notice of any meeting of the stockholders of the
Corporation.
2. Preference on Liquidation.
2.1 General. Subject to the remaining provisions of this
Section 2, in the event of any liquidation, dissolution, or winding up
of the affairs of the Corporation, whether voluntary or involuntary, or
any reduction in its capital resulting in any distribution of assets to
its stockholders, after payment or provision for payment of the debts
and liabilities of the Corporation, the holders of the Series I
Preferred Shares shall be entitled to receive, out of the remaining
assets of the Corporation, the amount of $35.00 in cash for each of the
Series I Preferred Shares they then hold, plus an amount equal to all
dividends accumulated and unpaid on each such share through the date
fixed for distribution, before any distribution shall be made to the
holders of any Common Shares or any other class or series of capital
shares of the Corporation ranking junior to the Series I Preferred
Shares. If upon any liquidation, dissolution, or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
assets of the Corporation available for distribution to stockholders
shall be insufficient to permit the payment to the holders of the
Series I Preferred Shares of the aforesaid preferential amounts, then
the entire assets of the Corporation shall be distributed ratably among
the holders of the Series I Preferred Shares then outstanding according
to the number of shares held by each.
2.2 Liquidation Defined. The purchase or redemption by the
Corporation of shares of any class, in any manner permitted by law,
shall not for the purpose of this Section be regarded as a liquidation,
dissolution, or winding up of the Corporation or as a reduction of its
capital. Neither the consolidation nor merger of the Corporation with
or into any other corporation or corporations, nor the sale or transfer
by the Corporation of all or any part of its assets, shall be deemed to
be liquidation, dissolution, or winding up of the Corporation for the
purposes of this section. A dividend or distribution to stockholders
from net profits or surplus earned after the date of any reduction of
capital shall not be deemed to be a distribution resulting from such
reduction in capital. No holder of Series I Preferred Shares shall be
entitled to receive any amounts with respect thereto upon any
liquidation, dissolution, or winding up of the Corporation other than
the amounts provided for in Section 2.1.
2.3 No Restriction on Surplus. No provision of this Section 2
shall in any manner, prior to any liquidation, dissolution, or winding
up of the affairs of the Corporation, whether voluntary or otherwise,
create or be deemed to create any restrictions upon the surplus of the
Corporation or prohibit the payment of dividends on the capital shares
of the Corporation out of the funds of the Corporation legally
available therefor, nor shall any such restriction or prohibition be in
any manner inferred from the provisions of this Section 2.
3. Dividends. Dividends on each share of the Series I Preferred Shares
shall accrue quarterly at the rate of ten-percent per annum from the date of
issuance, based upon the $35.00 per share value. In the event the Corporation,
at any time subsequent to the date the Series I Preferred Shares becomes
convertible to Class A Common Shares pursuant to Section 4, shall pay to the
holders of Common Shares a dividend, the holders of Series I Preferred Shares
shall be entitled to receive the same kind and the same proportionate shares of
such property being paid as a dividend which they would have been entitled to
receive had their Series I Preferred Shares been converted immediately prior to
the record date for payment of such dividend.
4. Conversion.
4.1 Conversion Option. Upon written notice to the Corporation
as described in Section 4.2.1., the holders of all issued and
outstanding Series I Preferred Shares shall have the right to convert
such Series I Preferred Shares into Class A Common Shares on the basis
of one Series I Preferred Share for ten (10) fully paid and
non-assessable Class A Common Shares of the Corporation exercisable at
the earliest to occur of (i) September 30, 2001; (ii) the date
immediately preceding any merger, consolidation, recapitalization,
reorganization, or other similar transaction or series of transactions,
whether or not the Corporation is the surviving corporation, in which
the Moyes Children's Limited Partnership, Jerry Moyes, or Vickie Moyes,
and their affiliates (the "Moyes Group") together beneficially own
shares having the power to cast less than thirty percent of the votes
entitled to be cast at meetings of stockholders; (iii) the date
immediately preceding any sale of stock, tender offer, or other
transaction or series of transactions in which any person, corporation,
or other entity or group thereof, other than the Moyes Group (the
"Acquiror"), acquires the beneficial ownership of shares of the
Corporation's stock which, when added to any other shares, the
beneficial ownership of which is held by the Acquiror, shall have more
than fifty percent of the votes that are entitled to be cast at
meetings of stockholders; or (iv) the date immediately preceding any
sale of all or substantially all assets of the Corporation and its
subsidiaries.
4.2 Terms and Provisions Applicable to Conversion.
Conversion of Series I Preferred Shares shall be subject to the following
additional terms and provisions:
4.2.1 Any holder of Series I Preferred Shares
converting such Series I Preferred Shares into Class A Common
Shares shall surrender the certificate or certificates
representing the Series I Preferred Shares so to be converted,
duly endorsed to the Corporation or in blank, at the principal
office of the Corporation (or such other place as may be
designated by the Corporation), and shall give written notice
to the Corporation at said office that the certificates are
being submitted for conversion, setting forth the name or
names (with the address or addresses) in which the Class A
Common Shares are to be issued.
4.2.2 As promptly as practicable after the surrender
for conversion of any Series I Preferred Shares, the
Corporation shall deliver or cause to be delivered at the
principal office of the Corporation (or such other place as
may be designated by the Corporation), to or upon the written
order of the holder of such Series I Preferred Shares,
certificates representing the Class A Common Shares issuable
upon such conversion, issued in such name or names as such
holder may direct. Series I Preferred Shares shall be deemed
to have been converted as of the date Certificates
representing the Class A Common Shares of the Corporation have
been issued, and the rights of the holders of such Series I
Preferred Shares shall cease at such time, and the person or
persons in whose name or names the certificates for such
shares are to be issued shall be treated for all purposes as
having become the record holder or holders of such Class A
Common Shares at such time.
4.2.3 The Corporation shall at the time of such
conversion pay to the holder of record of any Series I
Preferred Shares any accrued but unpaid dividends on said
Series I Preferred Shares so surrendered for conversion.
4.2.4 In the event that the Corporation shall at any
time subdivide or combine in a greater or lesser number of
outstanding Common Shares, the number of Common Shares
issuable upon conversion of the Series I Preferred Shares
shall be proportionately increased in the case of subdivision
or decreased in the case of a combination, effective in either
case at the close of business on the date when such
subdivision or combination shall become effective.
4.2.5 In the event that the Corporation shall be
recapitalized, consolidated with or merged into any other
corporation, or shall sell or convey to any other corporation
all or substantially all of its property as an entirety,
provision shall be made as part of the terms of such
recapitalization, consolidation, merger, sale, or conveyance
so that any holder of Series I Preferred Shares shall receive
in such transaction in lieu of the Class A Common Shares
otherwise issuable to it upon conversion of its Series I
Preferred Shares, but at the conversion ratio stated in
Section 4.1, the same kind and amount of securities or assets
as may be distributable upon such recapitalization,
consolidation, merger, sale, or conveyance, with respect to
the Class A Common Shares of the Corporation.
4.2.6 The Corporation shall at all times reserve and
keep available solely for the purpose of issue upon conversion
of Series I Preferred Shares, as herein provided, such number
of Class A Common Shares as shall be issuable upon the
conversion of all outstanding Series I Preferred Shares.
4.2.7 The issuance of certificates for Class A Common
Shares upon conversion of the Series I Preferred Shares shall
be made without charge for any tax in respect of such
issuance. However, if any certificate is to be issued in a
name other than that of the holder of record of the Series I
Preferred Shares so converted, the person or persons
requesting the issuance thereof shall pay to the Corporation
any amount of any tax which may be payable by the Corporation
in respect of any transfer involved in such issuance, or shall
establish to the satisfaction of the Corporation that such tax
has been paid or is not due and payable.
4.2.8 Upon conversion of the Series I Preferred Shares
to Class A Common Shares, the Series I Preferred Shares so
converted shall be deemed cancelled and returned to authorized
and unissued preferred shares, with no stated designation,
rights, or preferences.
5. Restrictions. Certificates evidencing ownership of the Series I
Preferred Shares are subject to stop transfer instructions issued by the
Corporation to the transfer agent prohibiting transfers thereof without
registration under the Securities Act of 1933 or unless an exemption from the
registration requirements of said Act is available in the opinion, addressed to
the Corporation, of counsel acceptable to the Corporation. Certificates
evidencing ownership of Series I Preferred Shares shall bear the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO ANY
STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS SUCH ARE FIRST REGISTERED PURSUANT TO THE APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR UNLESS THE COPORATION RECEIVES A
WRITTEN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE SATISFACTORY
TO THE CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED.
IN WITNESS WHEREOF, Simon Transportation Services Inc., has made
this Certificate under the hand of its President and its Secretary this 16th
day of August, 2001.
SIMON TRANSPORTATION SERVICES INC.
By: /s/ Kelle A. Simon
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Kelle A. Simon, President
By: /s/ Alban B. Lang
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Alban B. Lang, Secretary
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
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The foregoing Certificate was acknowledged before me this 16th day of
August, 2001, by Kelle A. Simon, President, and Alban B. Lang, Secretary, of
Simon Transportation Services Inc., a Nevada corporation, on behalf of the
corporation.
/s/ William J. Baker Jr.
Notary Public
My Commission Expires: March 11, 2003
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