ARTICLES OF INCORPORATION
OF
ENDOVASC, INC.
For the purpose of associating to establish a corporation under the provisions
and subject to the requirements of Title 7, Chapter 78 of Nevada Revised
Statutes, and the acts amendatory thereof, and hereinafter sometimes referred to
as the General Corporation Law of the State of Nevada, the undersigned
incorporator does hereby adopt and make the following Articles of Incorporation:
ARTICLE I
NAME
The name of the Corporation is Endovasc, Inc. (hereinafter, the
"Corporation).
ARTICLE II
REGISTERED OFFICE AND AGENT
The name of the Corporation's resident agent in the State of Nevada is CSC
Services of Nevada, Inc., and the street address of the said resident agent
where process may be served on the Corporation is 502 East John Street, Carson
City 89706. The mailing address and the street address of the said resident
agent are identical.
ARTICLE III
POWERS
The purpose for which the Corporation is organized is to transact all
lawful business for which corporations may be incorporated pursuant to the laws
of the State of Nevada. The Corporation shall have all the powers of a
corporation organized under the General Corporation Law of the State of Nevada.
ARTICLE IV
TERM
The Corporation is to have perpetual existence.
ARTICLE V
CAPITAL STOCK
The aggregate number of shares of all classes of capital stock which the
Corporation has authority to issue is 220,000,000 of which 200,000,000 are to be
shares of common stock, $.001 par value per share, and of which 20,000,000 are
to be shares of serial preferred stock, $.001 par value per share. The shares
may be issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of the stockholders except as
otherwise provided in this Article V or the rules of a national securities
exchange if applicable. The consideration for the issuance of the shares shall
be paid to or received by the Corporation in full before their issuance and
shall not be less than the par value per share. The consideration for the
issuance of the shares shall be tangible or intangible property or benefit to
the Corporation, including but not limited to cash, promissory notes, services
rendered, contracts for services to be rendered, securities of the Corporation,
personal property, real property, leases of real property or any combination of
the foregoing. In the absence of actual fraud in the transaction, the judgment
of the board of directors as to the value of such consideration shall be
conclusive. Upon payment of such consideration such shares shall be deemed to
be fully paid and nonassessable. In the case of a stock dividend, the part of
the surplus of the Corporation which is transferred to stated capital upon the
issuance of shares as a stock dividend shall be deemed to be the consideration
for their issuance.
A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:
A. Common Stock. Except as provided in these Articles, the holders of
the common stock shall exclusively posses all voting power. Subject to the
provisions of these Articles, each holder of shares of common stock shall
be entitled to one vote for each share held by such holders. Whenever there
shall have been paid, or declared and set aside for payment, to the holders
of the outstanding shares of any class or series of stock having preference
over the common stock as to the payment of dividends, the full amount of
dividends and sinking fund or retirement fund or other retirement payments,
if any, to which such holders are respectively entitled in preference to
the common stock, then dividends may be paid on the common stock, and on
any class or series of stock entitled to participate therewith as to
dividends, out of any assets legally available for the payment of
dividends, but only when and as declared by the board of directors of the
Corporation. In the event of any liquidation, dissolution or winding up of
the Corporation, after there shall have been paid, or declared and set
aside for payment, to the holders of the outstanding shares of any class
having preference over the common stock in any such event, the full
preferential amounts to which they are respectively entitled, the holders
of the common stock and of any class or series of stock entitled to
participate therewith, in whole or in part, as to distribution of assets
shall be entitled, after payment or provision for payment of all debts and
liabilities of the Corporation, to receive the remaining assets of the
Corporation available for distribution, in cash or in kind. The Corporation
may issue one or more series of common stock, each of which shall have
such relative rights with respect to dividends and liquidations as set
forth in a resolution or resolutions adopted by the board of directors of
the Corporation. Each share of each series of common stock shall have the
same relative powers, preferences and rights as, and shall be identical in
all respects with, all the other shares of the Corporation of the same
series.
B. Serial Preferred Stock. Except as provided in these Articles, the
board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of
serial preferred stock in series and to fix and state the powers,
designations, preferences and relative, participating, optional or other
special rights of the shares of each such series, and the qualifications,
limitation or restrictions thereof, including but not limited to
determination of any of the following:
(1) the distinctive serial designation and the number of shares
constituting such series;
(2) the rights in respect of dividends, if any, to be paid on the
shares of such series, whether dividends shall be cumulative and, if so,
from which date or dates, the payment or date or dates for dividends, and
the participating or other special rights, if any, with respect to
dividends;
(3) the voting powers, full or limited, if any, of the shares of
such series;
(4) whether the shares of such series shall be redeemable and, if
so, the price or prices at which, and the terms and conditions upon which
such shares may be redeemed;
(5) the amount or amounts payable upon the shares of such series
in the event of voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
(6) whether the shares of such series shall be entitled to the
benefits of a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and, if so entitled, the amount of such fund and
the manner of its application, including the price or prices at which such
shares may be redeemed or purchased through the application of such funds;
(7) whether the shares of such series shall be convertible into,
or exchangeable for, shares 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, if so convertible or exchangeable, the conversion price or
prices, or the rate or rates of exchange, and the adjustments thereof, if
any, at which such conversion or exchange may be made, and any other terms
and conditions of such conversion or exchange;
(8) the subscription or purchase price and form of consideration
for which the shares of such series shall be issued; and
(9) whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of the
same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series,
except the times from which dividends on shares which may be issued from
time to time of any such series may begin to accrue.
ARTICLE VI
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock or carrying any right to purchase
stock may be issued pursuant to resolution of the board of directors of the
Corporation to such persons, firms, corporations or associations, whether or not
holders thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.
ARTICLE VII
REPURCHASE OF SHARES
The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences or indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE VIII
MEETINGS OF STOCKHOLDERS; CUMULATIVE VOTING
A. No action that is required or permitted to be taken by the
stockholders of the Corporation at any annual or special meeting of
stockholders may be effected by written consent of stockholders in lieu of
a meeting of stockholders, unless the action to be effected by written
consent of stockholders and the taking of such action by such written
consent have expressly been approved in advance by the board of directors
of the Corporation.
B. Special meeting of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors of
the Corporation, or by a committee of the board of directors which as been
duly designated by the board of directors and whose powers and authorities,
as provided in a resolution of the board of directors or in the bylaws of
the Corporation, include the power and authority to call such meetings but
such special meetings may not be called by another person or persons.
C. There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.
D. Meetings of stockholders may be held at such place as the bylaws may
provide.
ARTICLE IX
NOTICE FOR NOMINATIONS AND PROPOSALS
A. Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders
may be made by the board of directors of the Corporation or by any
stockholder of the Corporation entitled to vote generally in the election
of directors. In order for a stockholder of the Corporation to make any
such nominations and/or proposals at an annual meeting or such proposals at
a special meeting, he or she shall give notice thereof in writing,
delivered or mailed by first class United States mail, postage prepaid, to
the Secretary of the Corporation of less than thirty days nor more than
sixty days prior to any such meeting; provided, however, that if less than
forty days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the tenth day following the day on
which notice of the meeting was mailed to stockholders. Each such notice
given by a stockholder with respect to nominations for the election of
directors shall set forth (1) the name, age, business address and, if
known, residence address of each nominee proposed in such notice, (2) the
principal occupation or employment of each such nominee, and (3) the number
of shares of stock of the Corporation which are beneficially owned by each
such nominee. In addition, the stockholder making such nomination shall
promptly provide any other information reasonably requested by the
Corporation.
B. Each such notice given by a stockholder to the Secretary with
respect to business proposals to bring before a meeting shall set forth in
writing as to each matter: (1) a brief description of the business desired
to be brought before the meeting and the reasons for conducting such
business at the meeting; (2) the name and address, as they appear on the
Corporation's books, of the stockholder proposing such business; (3) the
class and number of shares of the Corporation which are beneficially owned
by the stockholder; and (4) any material interest of the stockholder in
such business. Notwithstanding anything in these Articles to the contrary,
no business shall be conducted at the meeting except in accordance with the
procedures set forth in this Article.
C. The Chairman of the annual or special meeting of stockholders may,
if the facts warrant, determine and declare to such meeting that a
nomination or proposal was not made in accordance with the foregoing
procedure, and, if he should so determine, he shall so declare to the
meeting and the defective nomination or proposal shall be disregarded and
laid over for action at the next succeeding adjourned, special or annual
meeting of the stockholders taking place thirty days or more thereafter.
This provision shall not require the holding of any adjourned or special
meeting of stockholders for the purpose of considering such defective
nomination or proposal.
ARTICLE X
DIRECTORS
A. Initial Board of Directors. The initial board of directors shall
consist of one person, who shall serve until the initial meeting of
directors and the election of his replacement. The initial director shall
be
M. Dwight Cantrell
15001 Walden Road
Suite 201
Montgomery, TX 77356
B. Number; Vacancies. The number of directors of the Corporation shall
be such number, not less than one nor more than 15 (exclusive of directors,
if any, to be elected by holders of preferred stock of the Corporation), as
shall be provided from time to time in a resolution adopted by the board of
directors, provided that no decrease in the number of directors shall have
the effect of shortening the term of any incumbent director, and provided
further that no action shall be taken to decrease or increase the number of
directors from time to time unless at least two-thirds of the directors
then in office shall concur in said action. Exclusive of directors, if any,
elected by holders of preferred stock, vacancies in the board of directors
of the Corporation, however caused, and newly created directorships shall
be filled by a vote of two-thirds of the directors then in office, whether
or not a quorum, and any director so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of the
class to which the director has been chosen expires and when the director's
successor is elected and qualified. The board of directors shall be
classified in accordance with the provisions of Section B of this Article
X.
C. Classified Board. The board of directors of the Corporation (other
than directors which may be elected by the holders of preferred stock)
shall be divided into three classes of directors which shall be designated
Class I, Class II and Class III. The members of each class shall be elected
for a term of three years and until their successors are elected and
qualified. Such classes shall be as nearly equal in number as the then
total number of directors constituting the entire board of directors shall
permit, exclusive of directors, if any, elected by holders of preferred
stock, with the terms of office of all members of one class expiring each
year. Should the number of directors not be equally divisible by three, the
excess director or directors shall be assigned to Classes I or II as
follows: (1) if there shall be an excess of one directorship over the
number equally divisible by
three, such extra directorship shall be classified in Class I; and (2) if
there be an excess of two directorships over a number equally divisible by
three, one shall be classified in Class I and the other in Class II. At the
first meeting of the board of directors of the Corporation, directors of
Class I shall be elected to hold office for a term expiring at the first
annual meeting of stockholders, directors of Class II shall be elected to
hold office for a term expiring at the second succeeding annual meeting of
stockholders and directors of Class III shall be elected to hold office for
a term expiring at the third succeeding annual meeting thereafter.
Thereafter, at each succeeding annual meeting, directors of each class
shall be elected for three-year terms. Notwithstanding the foregoing, the
director whose term shall expire at any annual meeting shall continue to
serve until such time as his successor shall have been duly elected and
shall have qualified unless his position on the board of directors shall
have been abolished by action taken to reduce the size of the board of
directors prior to said meeting.
D. Increase and Reduction in Directors. Should the number of directors
of the Corporation be reduced, the directorship(s) eliminated shall be
allocated among classes as appropriate so that the number of directors in
each class is as specified in the position(s) to be abolished.
Notwithstanding the foregoing, no decrease in the number of directors shall
have the effect of shortening the term of any incumbent director. Should
the number of directors of the Corporation be increased, other than
directors which may be elected by the holders of preferred stock, the
additional directorships shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the
immediately preceding paragraph.
E. Directors Elected by Preferred Stockholders. Whenever the holders
of any one or more series of preferred stock of the Corporation shall have
the right, voting separately as a class, to elect one or more directors of
the Corporation, the board of directors shall include said directors so
elected in addition to the number of directors fixed as provided in this
Article X. Notwithstanding the foregoing, and except as otherwise may be
required by law, whenever the holders of any one or more series of
preferred stock of the Corporation elect one or more directors of the
Corporation, the terms of the director or directors elected by such holders
shall expire at the next succeeding annual meeting of stockholders.
ARTICLE XI
REMOVAL OF DIRECTORS
Notwithstanding any other provision of these Articles or the bylaws of the
Corporation, any director or all the directors of a single class (but not the
entire board of directors) of the Corporation may be removed, at any time, but
only for cause and only by the affirmative vote of the holders of at least 75%
of the voting power of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at a meeting of the stockholders called for
that purpose. Notwithstanding the
foregoing, whenever the holders of any one or more series of preferred stock of
the Corporation shall have the right, voting separately as a class, to elect one
or more directors of the Corporation, the preceding provisions of this Article
XI shall not apply with respect to the director or directors elected by such
holders of preferred stock.
ARTICLE XII
ACQUISITION OF CAPITAL STOCK
A. Definitions. For the purpose of this Article:
(1) The term "Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute.
(2) The term "acting in concert" shall mean (i) knowing
participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, and (ii) a
combination or pooling of voting or other interest in the Corporation's
outstanding shares of capitol stock for a common purpose, pursuant to any
contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise.
(3) The term "acquire," "acquisition" or "acquiring" with respect
to the acquisition of any security of the Corporation shall refer to the
acquisition of such security by any means whatsoever, including without
limitation, an acquisition of such security by gift, by operation of law,
by will or by intestacy, whether voluntarily or involuntarily.
(4) The term "Code" means the Internal Revenue Code of 1986, as
amended, and any successor statute.
(5) The term "Common Stock" means all Common Stock of the
Corporation and any other securities issued by the Corporation which are
treated as stock for purposes of Section 382 of the Code.
(6) The term "Fair Market Value" of the Common Stock shall mean
the average of the daily closing prices of the Common Stock for 15
consecutive trading days commencing 20 trading days before the date of such
computation. The closing price is the last reported sale price on the
principal securities exchange on which the Common Stock is listed or, if
the Common Stock is not listed on any national securities exchange, the
NASDAQ National Marked System, or, if the Common Stock is not designated
for trading on the NASDAQ National Market System, the average of the
closing bid and asked prices as reported on NASDAQ or, if not so reported,
as furnished by the National Quotation Bureau Incorporated. In the absence
of such a quotation, the Corporation shall determine the current market
price on a reasonable and appropriate basis of the average of the daily
closing prices for 15 consecutive trading days commencing 20 trading days
before the date of such computation.
(7) The term "own," "owing," "ownership" or "owning" refer to the
ownership of securities within the meaning of Section 382 of the Code after
taking into account the attribution rules of Section 382(l)(3) of the Code
and the regulations promulgated hereunder.
(8) The term "Person" shall mean any individual, firm,
corporation, partnership, joint venture or other entity and shall include
any group composed of such person and any other person with whom such
person or any Affiliate or Associate (as those terms are defined in Rule
12b-2 of the General Rules and Regulations under the Act) of such person
has any agreement, arrangement or understanding, directly or indirectly,
for the purposes of acquiring, holding, voting or disposing of Common
Stock, and any other person who is a member of such group.
(9) The term "Transfer Agent" shall mean the transfer agent with
respect to the Common Stock nominated and appointed by the board of
directors from time to time.
B. Acquisition of Control Shares.
(1) If, at any time during the ten years from the effective date
of these Articles, any Person shall acquire the beneficial ownership (as
determined pursuant to Rules 13d-3 and 13d-5 under the Act) of more than
20% of any class of Common Stock, then the record holders of Common Stock
beneficially owned by such acquiring Person shall have only the voting
rights set forth in this paragraph B on any matter requiring their vote or
consent. With respect to each vote in excess of 20% of the voting power of
the outstanding shares of Common Stock which such record holders would
otherwise be entitled to cast without giving effect to this paragraph B,
the record holders in the aggregate shall be entitled to cast only
one-hundredth of a vote. A Person who is a record owner of shares of Common
Stock that are beneficially owned simultaneously by more than one person
shall have, with respect to such shares, the right to cast the least number
of votes that such person would be entitled to cast under this paragraph B
by virtue of such shares being so beneficially owned by any of such
acquiring Persons. The effect of the reduction in voting power required by
this paragraph B shall be given effect in determination the presence of a
quorum for purposes of convening a meeting of the stockholders of the
Corporation.
(2) The limitation on voting rights prescribed by this paragraph B
shall terminate and be of no force and effect as of the earliest to occur
of: (i) the date that any person becomes the beneficial owner of shares of
stock representing at least 75% of the total number of votes entitled to be
cast in respect of all outstanding shares of stock, before giving effect to
the reduction in votes prescribed by this paragraph B; or (ii) the date
(the "Reference Date") one day prior to the date on which, as a result of
such limitation of voting rights, the Common Stock will be delisted from
(including by ceasing to be temporarily or provisionally authorized for
listing with) the New York Stock Exchange (the "NYSE") or the American
Stock Exchange (the "AMEX"), or be no longer authorized for inclusion
(including by ceasing to be provisionally or temporarily authorized for
inclusion) on the National Association of Securities Dealers, Inc.
Automated Quotation System/National Market System ("NASDAQ/NMS"); provided,
however, that (a) such termination shall not occur until the earlier of (x)
the 90th day after the Reference Date or (y) the first day on or after a
Reference Date that there is not pending a proceeding under the rules of
the NYSE, the AMEX or the NASDAQ/NMS or any other administrative or
judicial proceeding challenging such delisting or removal of authorization
of the Common Stock, an application for listing of the Common stock with
the NYSE or the AMEX or for authorization for the Common Stock to be
including on the NASDAQ/NMS, or an appeal with respect to any such
application, and (b) such termination shall not occur by virtue of such
delisting or lack of authorization if on or prior to the earlier of the
90th day after the Reference Date or the day on which no proceeding,
application or appeal of the type described in (y) above is pending, the
Common Stock is approved for listing or continued listing on the NYSE or
the AMEX or authorized for inclusion or continued inclusion on the
NASDAQ/NMS (including any such approval or authorization which is temporary
or provisional). Nothing contained herein shall be construed so as to
prevent the Common Stock from continuing to be listed with the NYSE or AMEX
or continuing to be authorized for inclusion on the NASDAQ/NMS in the event
that the NYSE, AMEX or NASDAQ/NMS, as the case may be, adopts a rule or is
governed by an order, decree, ruling or regulation of the Securities and
Exchange Commission which provides in whole or in part that companies
having Common Stock with differential voting rights listed on the NYSE or
the Amex or authorized for inclusion on the NASDAQ/NMS may continue to be
so listed or included.
C. Exceptions. The restrictions contained in this Article XII shall
not apply to (1) any underwriter or member of an underwriting or selling
group involving a public sale or resale of securities of the Corporation or
a subsidiary thereof; provided, however, that upon completion of the sale
or resale of such securities, no such underwriter or member of such selling
group is a beneficial owner of more than 4.9% of any class of equity
security of the Corporation, (2) any revocable proxy granted pursuant to a
proxy solicitation in compliance with section 14 of the Act by a
stockholder of the Corporation or (3) any employee benefit plans of the
Corporation. In addition, the Continuing Directors of the Corporation, the
officers and employees of the Corporation and its subsidiaries, the
directors of subsidiaries of the Corporation, the employee benefit plans of
the Corporation and its subsidiaries, entities organized or established by
the Corporation or any subsidiary thereof pursuant to the terms of such
plans and trustees and fiduciaries with respect to such plans acting in
such capacity shall not be deemed to be a group with respect to their
beneficial ownership of voting stock of the Corporation solely by virtue of
their being directors, officers or employees of the Corporation or a
subsidiary thereof or by virtue of the Continuing Directors of the
Corporation, the officers and employees of the Corporation and its
subsidiaries and the directors of subsidiaries of the Corporation being
fiduciaries or beneficiaries of an employee benefit plan of the Corporation
or a subsidiary of the Corporation. Notwithstanding the foregoing, no
director, officer or employee of the Corporation or any of its subsidiaries
or group of any of them shall be exempt from the provisions of this Article
XII should any such person or group become a beneficial owner of more than
20% of any class of equity security of the Corporation.
D. Construction. A majority of the Continuing Directors, as defined in
Article XIII, shall have the power to construe and apply the provisions of
paragraphs B, C and D of this Article XII and to make all determinations
necessary or desirable to implement such provisions, including but not
limited to matters with respect to (1) the number of shares beneficially
owned by any person, (2) whether a person has an agreement, arrangement or
understanding with another as to the matters referred to in the definition
of beneficial ownership, (3) the application of any other definition or
operative provision of this Article XII to the given facts or (4) any other
matter relating to the applicability or effect of paragraphs B, C and D of
this Article XII. Any constructions, applications, or determinations made
by the Continuing Directors pursuant to paragraphs B, C and D of this
Article XII in good faith and on the basis of such information and
assistance as was then reasonably available for such purpose shall be
conclusive and binding upon the Corporation and its stockholders.
E. Partial Invalidity. If any provision of this Article XII or any
application of any such provision is determined to be invalid by any
federal or state court having jurisdiction over the issues, the validity of
the remaining provisions shall not be affected and other applications of
such provision shall be affected only to the extent necessary to comply
with the determination of such court.
ARTICLE XIII
APPROVAL OF CERTAIN BUSINESS COMBINATIONS
The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.
A. (1) Except as otherwise expressly provided in this Article XIII, and
in addition to any other vote required by law, the affirmative vote
required by law, the affirmative vote of the holders of (i) at least 75% of
the voting power of the outstanding shares entitled to vote thereon (and,
if any class or series of shares is entitled to vote thereon separately the
affirmative vote of the holders of at least 75% of the outstanding shares
of each such class or series), and (ii) at least a majority of the
outstanding shares entitled to vote thereon, not including shares deemed
beneficially owned by a Related Person (as hereinafter defined), shall be
required in order to authorize (a) any merger or consolidation of the
Corporation or a subsidiary of the Corporation with or into a Related
person (as hereinafter defined); (b) any sale, lease, exchange, transfer or
other disposition, including without limitation, a mortgage or pledge, of
all or any Substantial Part (as hereinafter defined) of the assets of the
Corporation (including without limitation any voting securities of a
subsidiary) or of a subsidiary, to a Related Person; (c) any merger or
consolidation of a Related Person with or into the Corporation or a
subsidiary of the Corporation; (d) any sale, lease, exchange, transfer or
other disposition of all or any Substantial Part of the assets of a Related
Person to the Corporation or a subsidiary of the Corporation; (e) the
issuance of any securities of the Corporation or a subsidiary of the
Corporation to a Related Person other than on a pro rata basis to all
holders of capital stock of the Corporation of the same class or classes
held by the Related person, pursuant
to a stock split, stock dividend or distribution or warrants or rights, and
other than in connection with the exercise or conversion of securities
exercisable for or convertible into securities of the Corporation or any of
its subsidiaries which securities have been distributed pro rata to all
holders of capital stock of the Corporation; (f) the acquisition by the
Corporation or a subsidiary of the Corporation of any securities of a
Related Person; (g) any reclassification of the common stock of the
Corporation, or any recapitalization involving the common stock of the
Corporation or any similar transaction (whether or not with or into or
otherwise involving a Related Person) that has the effect directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Corporation or any subsidiary that are directly or indirectly owned by any
Related Person; and (h) any agreement, contract or other arrangement
providing for any of the transactions described in this Article XIII.
(2) Such affirmative vote shall be required notwithstanding any
other provision of these Articles, any provision of law, or any agreement
with any regulatory agency or national securities exchange which might
otherwise permit a lesser vote or no vote; provided, however, that in no
instance shall the provisions of this Article XIII require the vote of
greater than 85% of the voting power of the outstanding shares entitled to
vote thereon for the approval of a Business Combination.
(3) The term "Business Combination" as used in this Article XIII
shall mean any transaction which is referred to in any one or more of
subparagraphs A(1)(a) through (h) above.
B. The provisions of paragraph A shall not be applicable to any
particular Business Combination, and such Business Combination shall
require only such affirmative vote as is required by any other provision of
these Articles, any provision of law, or any agreement with any regulatory
agency or national securities exchange, if the Business Combination shall
have been approved in advance by a two-thirds vote of the Continuing
Directors (as hereinafter defined; provided, however, that such approval
shall only be effective if obtained at a meeting at which a continuing
Director Quorum (as hereinafter defined) is present.
C. For the purposes of this Article XIII the following definitions
apply:
(3) The term "Related Person" shall mean and include (i) any
individual, corporation, partnership or other person or entity which
together with its "affiliates" or "associates" (as those terms are defined
in the Act) "beneficially owns" (as that there is defined in the Act) in
the aggregate 10% or more of the outstanding shares of the common stock of
the Corporation; and (ii) any "affiliate" or "associate" (as those terms
are defined in the Act) of any such individual, Corporation, partnership or
other person or entity; provided, however, that the term "Related Person"
shall not include the Corporation, any subsidiary of the Corporation, any
employee benefit plan, employee stock plan of the Corporation or of any
subsidiary of the Corporation, or any trust established by the Corporation
in connection with the foregoing, or any person or entity organized,
appointed, established
or holding shares of capital stock of the Corporation for or pursuant to
the terms of any such plan, nor shall such term encompass shares of capital
stock of the Corporation held by any of the foregoing (whether or not held
in a fiduciary capacity or otherwise). Without limitation, any shares of
the common stock of the Corporation which any Related Person has the right
to acquire pursuant to any agreement, or upon exercise or conversion
rights, warrants or options, or otherwise, shall be deemed "beneficially
owned" by such Related Person.
(4) The term "Substantial Part" shall mean more than 25% of the
total assets of the entity at issue, as of the end of its most recent
fiscal year ending prior to the time the determination is made.
(5) The term "Continuing Director" shall mean any member of the
board of directors of the Corporation who is unaffiliated with and who is
not the Related Person and was a member of the board prior to the time that
the Related Person became a Related Person, and any successor of a
Continuing Director who is unaffiliated with and who is not the Related
Person and is recommended to succeed a Continuing Director by a majority of
Continuing Directors then on the board. (4) The term "Continuing Director
Quorum" shall mean two-thirds of the Continuing Directors capable of
exercising the powers conferred on them.
ARTICLE XIV
EVALUATION OF BUSINESS COMBINATIONS
In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the stockholders, when evaluating a
Business Combination (as defined in Article XIII) or a tender or exchange offer,
the board of directors of the Corporation shall, in addition to considering the
adequacy of the amount to be paid in connection with any such transaction,
consider all of the following factors and any other factors which it deems
relevant; (A) the social and economic effects of the transaction on the
Corporation and its subsidiaries, employees and customers, creditors and other
elements of the communities in which the Corporation and its subsidiaries
operate or are located; (B) the business and financial condition and earnings
prospects of the acquiring person or entity, including, but not limited to, debt
service and other existing financial obligations, financial obligations to be
incurred in connection with the acquisition and other likely financial
obligations of the acquiring person or entity and the possible effect of such
conditions upon the Corporation and its subsidiaries and the other elements of
the communities in which the Corporation and its subsidiaries operate or are
located; and (C) the competence, experience, and integrity of the acquiring
person or entity and its or their management.
ARTICLE XV
INDEMNIFICATION
Any person who was or is a party or is or is threatened to be made a party
to any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative (whether or not by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, incorporator, employee, or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, incorporator,
employee, partner, trustee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise (including an employee benefit plan), shall
be entitled to be indemnified by the Corporation to the full extent then
permitted by law against expenses (including counsel fees and disbursements),
judgments, fines (including excise taxes assessed on a person with respect to an
employee benefit plan), and amounts paid in settlement incurred by him in
connection with such action, suit, or proceeding. Such right of indemnification
shall inure whether or not the claim asserted is based on matters which antedate
the adoption of this Article XV. Such right of indemnification shall continue
as to a person who has ceased to be a director, officer, incorporator, employee,
partner, trustee, or agent and shall inure to the benefit of the heirs and
personal representatives of such a person. The indemnification provided by this
Article XV shall not be deemed exclusive of any other rights which may be
provided now or in the future under any provision currently in effect or
hereafter adopted of the bylaws, by any agreement, by vote of stockholders, by
resolution of disinterested directors, by provisions of law, or otherwise.
ARTICLE XVI
LIMITATIONS ON DIRECTORS' LIABILITY
No director or officer of the Corporation shall be personally liable to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, except: (A) for acts or omissions that involve intentional
misconduct, fraud or a knowing violation of law; or (B) the payment of
distributions in violation of Nevada Revised Statutes Sec.78.300. If the
General Corporation law of the State of Nevada is amended after the date of
filing of these Articles to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General Corporation
Law of the State of Nevada, as so amended. Any repeal or modification of the
foregoing paragraph by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
ARTICLE XVII
AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to adopt,
repeal, alter, amend and rescind the bylaws of the Corporation by a vote of
two-thirds of the board of directors. Notwithstanding any other provision of
these Articles or the bylaws of the Corporation, and in addition to any
affirmative vote required by law (and notwithstanding the fact that some lesser
percentage may
be specified by law), the bylaws shall be adopted, repealed, altered, amended or
rescinded by the stockholders of the Corporation only by the vote of the holders
of not less than 75% of the voting power of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the stockholders
called for that purpose (provided that notice of such proposed adoption, repeal,
alteration, amendment or rescission is included in the notice of such meeting),
or, as set forth above, by the board of directors.
ARTICLE XVIII
AMENDMENT OF ARTICLES OF INCORPORATION
Subject to the provisions hereof, the Corporation reserves the right to
repeal, alter, amend or rescind any provision contained in these Articles in the
manner now or hereafter prescribed by law, and all rights conferred on
stockholders herein are granted subject to this reservation. Notwithstanding
the foregoing at any time and from time to time, the provisions set forth in
Articles VIII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII and this Article XVIII
may be repealed, altered, amended or rescinded in any respect only if the same
is approved by the affirmative vote of the holders of not less than 75% of the
voting power of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for this
purpose as a single class) cast at a meeting of the stockholders called for that
purpose (provided that notice of such proposed adoption, repeal, alteration,
amendment or rescission is included in the notice of such meeting).
ARTICLE XIX
INCORPORATOR
The name and address of the incorporator is:
Lawrence E. Wilson
1001 McKinney, 18th Floor
Houston, TX 77002
THE UNDERSIGNED, being the sole incorporator, for the purpose of forming a
corporation pursuant to the General Corporation Law of Nevada, does make and
file these Articles of Incorporation, hereby declaring and certifying that the
facts herein stated are true, and accordingly have hereunto set my hand this
February 17, 2003.
/s/ Lawrence E. Wilson
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Lawrence E. Wilson