-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pohh+kWg38wclWAg80mpZIPV8gAHv69znZ/Z4QfPp6CRiDg2hxwQ8nLWXMwP6Uq4 6+8WwKN9Z0tZjqfFAZ7ZyA== 0000950129-01-502667.txt : 20010817 0000950129-01-502667.hdr.sgml : 20010817 ACCESSION NUMBER: 0000950129-01-502667 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010816 GROUP MEMBERS: ARTHUR TEMPLE III GROUP MEMBERS: ATSP PARTNERSHIP LTD GROUP MEMBERS: T L L TEMPLE FOUNDATION GROUP MEMBERS: TEMPLE INTERESTS L P GROUP MEMBERS: TEMPLE SOUTHWOOD INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH TEXAS DRILLING & EXPLORATION INC CENTRAL INDEX KEY: 0000320575 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 742088619 STATE OF INCORPORATION: TX FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-33018 FILM NUMBER: 1717134 BUSINESS ADDRESS: STREET 1: 9310 BROADWAY BLDG I CITY: SAN ANTONIO STATE: TX ZIP: 78217 BUSINESS PHONE: 5128287689 FORMER COMPANY: FORMER CONFORMED NAME: SOUTH TEXAS DRILLING CO DATE OF NAME CHANGE: 19810715 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: T L L TEMPLE FOUNDATION CENTRAL INDEX KEY: 0001157453 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 109 TEMPLE BLVD STREET 2: SUITE 300 CITY: LUFKIN STATE: TX ZIP: 75901-7321 BUSINESS PHONE: 9366395197 MAIL ADDRESS: STREET 1: 109 TEMPLE BLVD STREET 2: SUITE 300 CITY: LUKIN STATE: TX ZIP: 75901-7321 SC 13D 1 h89993sc13d.txt T L L TEMPLE FOUNDATION FOR SOUTH TEXAS DRILLING 1 SCHEDULE 13D (Rule 13D-101) Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 SOUTH TEXAS DRILLING & EXPLORATION, INC. (Name of Issuer) Common Stock, $0.10 par value per share (Title of Class of Securities) 840553 (CUSIP Number) A. Wayne Corley 109 Temple Blvd., Suite 300 Lufkin, Texas 75901-7321 (936) 639-5197 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 14, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 CUSIP NO. 840553 13D PAGE 2 OF 14 PAGES - -------------------------------------------------------------------------------- 1 Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons (Entities Only): T.L.L. Temple Foundation - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions): (a) [x] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC Use Only: - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions): WC - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization: Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power: Number of Shares -0- Beneficially ----------------------------------------------------------------- Owned by 8 Shared Voting Power: Each Reporting 1,799,647 * Person ----------------------------------------------------------------- With 9 Sole Dispositive Power: -0- ----------------------------------------------------------------- 10 Shared Dispositive Power: 1,799,647 * - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person: 1,799,647* - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares: (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11): 11.5% ** - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions): OO: Trust - -------------------------------------------------------------------------------- * Represents 800,000 shares of common stock, par value $0.10 per share ("Common Stock"), of South Texas Drilling & Exploration, Inc. and 999,647 shares of Common Stock into which the 153,915 shares of Series B 8% Convertible Preferred Stock ("Series B Preferred Stock") held by T.L.L. Temple Foundation are convertible. Each share of Series B Preferred Stock has the same voting rights as the number of shares of the Common Stock into which it may be converted and the right to vote as a class with respect to certain matters. ** After giving effect to the conversion of 153,915 shares of Series B Preferred Stock into 999,647 shares of Common Stock by T.L.L. Temple Foundation. 3 CUSIP NO. 840553 13D PAGE 3 OF 14 PAGES - -------------------------------------------------------------------------------- 1 Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons (Entities Only): Temple Interests, L.P. - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions): (a) [x] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC Use Only: - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions): WC - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization: Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power: Number of Shares -0- Beneficially ----------------------------------------------------------------- Owned by 8 Shared Voting Power: Each Reporting 199,390 * Person ----------------------------------------------------------------- With 9 Sole Dispositive Power: -0- ----------------------------------------------------------------- 10 Shared Dispositive Power: 199,390 * - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person: 199,390 * - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares: (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11): 1.3%** - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions): PN - -------------------------------------------------------------------------------- * Represents 199,390 shares of Common Stock into which the 30,700 shares of Series B Preferred Stock held by Temple Interests, L.P. are convertible. Each share of Series B Preferred Stock has the same voting rights as the number of shares of Common Stock into which it may be converted and the right to vote as a class with respect to certain matters. ** After giving effect to the conversion of 30,700 shares of Series B Preferred Stock into 199,390 shares of Common Stock. 4 CUSIP NO. 840553 13D PAGE 4 OF 14 PAGES - -------------------------------------------------------------------------------- 1 Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons (Entities Only): Arthur Temple, III - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions): (a) [x] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC Use Only: - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions): AF - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization: Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power: Number of Shares -0- Beneficially ----------------------------------------------------------------- Owned by 8 Shared Voting Power: Each Reporting 1,999,037 * Person ----------------------------------------------------------------- With 9 Sole Dispositive Power: -0- ----------------------------------------------------------------- 10 Shared Dispositive Power: 1,999,037 * - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person: 1,999,037 * - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares: (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11): 12.6% ** - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions): IN - -------------------------------------------------------------------------------- * Represents 800,000 shares of Common Stock and 1,199,037 shares of Common Stock into which 184,615 shares of Series B Preferred Stock are convertible. Each share of Series B Preferred Stock has the same voting rights as the number of shares of Common Stock into which it may be converted and the right to vote as a class with respect to certain matters. ** After giving effect to the conversion of 184,615 shares of Series B Preferred Stock into 1,199,037 shares of Common Stock. 5 CUSIP NO. 840553 13D PAGE 5 OF 14 PAGES - -------------------------------------------------------------------------------- 1 Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons (Entities Only): Temple Southwood, Inc. - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions): (a) [x] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC Use Only: - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions): AF - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization: Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power: Number of Shares -0- Beneficially ----------------------------------------------------------------- Owned by 8 Shared Voting Power: Each Reporting 199,390 * Person ----------------------------------------------------------------- With 9 Sole Dispositive Power: -0- ----------------------------------------------------------------- 10 Shared Dispositive Power: 199,390 * - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person: 199,390 * - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares: (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11): 1.3%** - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions): CO - -------------------------------------------------------------------------------- * Represents 199,390 shares of Common Stock into which 30,700 shares of Series B Preferred Stock are convertible. Each share of Series B Preferred Stock has the same voting rights as the number of shares of Common Stock into which it may be converted and the right to vote as a class with respect to certain matters. ** After giving effect to the conversion of 30,700 shares of Series B Preferred Stock into 199,390 shares of Common Stock. 6 CUSIP NO. 840553 13D PAGE 6 OF 14 PAGES - -------------------------------------------------------------------------------- 1 Name of Reporting Persons/ I.R.S. Identification Nos. of Above Persons (Entities Only): ATSP Partnership, Ltd. - -------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions): (a) [x] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC Use Only: - -------------------------------------------------------------------------------- 4 Source of Funds (See Instructions): AF - -------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): [ ] - -------------------------------------------------------------------------------- 6 Citizenship or Place of Organization: Texas - -------------------------------------------------------------------------------- 7 Sole Voting Power: Number of Shares -0- Beneficially ----------------------------------------------------------------- Owned by 8 Shared Voting Power: Each Reporting 199,390 * Person ----------------------------------------------------------------- With 9 Sole Dispositive Power: -0- ----------------------------------------------------------------- 10 Shared Dispositive Power: 199,390 * - -------------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person: 199,390 * - -------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares: (See Instructions) [ ] - -------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11): 1.3%** - -------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions): PN - -------------------------------------------------------------------------------- * Represents 199,390 shares of Common Stock into which 30,700 shares of Series B Preferred Stock are convertible. Each share of Series B Preferred Stock has the same voting rights as the number of shares of Common Stock into which it may be converted and the right to vote as a class with respect to certain matters. ** After giving effect to the conversion of 30,700 shares of Series B Preferred Stock into 199,390 shares of Common Stock. 7 CUSIP NO. 840553 13D PAGE 7 OF 14 PAGES STATEMENT ON SCHEDULE 13D INTRODUCTORY NOTE: All information herein with respect to South Texas Drilling & Exploration, Inc., a Texas corporation, is to the best knowledge and belief of the Reporting Persons, as defined herein. ITEM 1. SECURITY AND ISSUER. This statement relates to shares of the common stock, $0.10 par value per share (the "Common Stock"), of South Texas Drilling & Exploration, Inc., a Texas corporation ("STDE"). STDE's principal place of business is located at 9310 Broadway, Building I, San Antonio, Texas, 78217. ITEM 2. IDENTITY AND BACKGROUND. This statement is filed by T.L.L. Temple Foundation, a Texas trust ("T.L.L."), Temple Interests, L.P., a Texas limited partnership ("Temple Interests"), Arthur Temple, III, both in his capacity as Chairman of the Board of Trustees of T.L.L. and as a general partner of Temple Interests, Temple Southwood, Inc., a Texas corporation and general partner of Temple Interests ("Southwood"), and ATSP Partnership, Ltd., a Texas limited partnership and a general partner of Temple Interests ("ATSP"). The foregoing persons signing this Schedule 13D are hereafter referred to as the "Reporting Persons". The Reporting Persons are making this joint filing because they may be deemed a "group" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934. T.L.L. is a private charitable foundation that invests primarily in publicly traded securities for charitable purposes. The address of the principal business and of the principal office of T.L.L. is 109 Temple Blvd., Suite 300, Lufkin, Texas 75901-7321. Temple Interests is a limited partnership whose primary business is investment in real estate and securities for the benefit of its partners. The address of the principal business and of the principal office of Temple Interests is 109 Temple Blvd., Suite 200, Lufkin, Texas 75901-7321. Arthur Temple, III is a United States citizen and President of Exeter Investment Company, a private investment company investing primarily in real estate and securities. His business address is 109 Temple Blvd., Suite 200, Lufkin, Texas 75901-7321. The primary business of Southwood is to act as managing general partner of Temple Interests. The address of the principal business and of the principal office of Southwood is 109 Temple Blvd., Suite 200, Lufkin, Texas 75901-7321. ATSP is a limited partnership whose primary business is investing in securities and real estate for the benefit of its partners. The address of the principal business and of the principal office of ATSP is 109 Temple Blvd., Suite 100, Lufkin, Texas 75901-7321. The sole general partner of ATSP is Arthur Temple, Inc., a Texas corporation. The primary business of Arthur Temple, Inc. is to act as general partner of ATSP. The address of the principal business and of the principal office of Arthur Temple, Inc. is 109 Temple Blvd., Suite 100, Lufkin, Texas 75901-7321. 8 CUSIP NO. 840553 13D PAGE 8 OF 14 PAGES Attached to this statement as Schedule I is a list of the trustees of T.L.L., a list of officers and directors of Southwood, a list of officers and directors of Arthur Temple, Inc., and the business address, citizenship, and principal occupation or employment of each officer, director, and trustee (including the name, principal business and address of any corporation or organization at which their employment is conducted). During the last five years, none of the Reporting Persons nor to the knowledge of the Reporting Persons any of the persons listed on Schedule I has been (i) convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction, and as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, United States federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. T.L.L. financed the cash portion of the consideration for its shares of Common Stock, including its shares of Series B 8% Convertible Preferred Stock, from working capital totaling $2,501,118.75. Temple Interests financed the cash portion of the consideration for its shares of Series B 8% Convertible Preferred Stock from working capital totaling $498,875. ITEM 4. PURPOSE OF TRANSACTION. Each of the Reporting Persons acquired the shares of Common Stock reported herein primarily for the purpose of investment. Although there is no present intention on the part of any Reporting Person to do so, each Reporting Person may independently decide to make additional purchases of Common Stock in the future, either in the open market or in private transactions, subject to its respective evaluation of STDE's business prospects and financial condition, the market for the Common Stock, other opportunities available to such Reporting Person, general economic conditions, money and stock market conditions and other future developments. Depending upon results of future evaluations and the factors mentioned above, the Reporting Persons, at any time, may decide to change their intention with respect to the acquisition and/or retention of shares of Common Stock, including, without limitation, a determination to increase, decrease or entirely dispose of its holdings of Common Stock, although the Reporting Persons currently have no intention to do so. However, the shares of Common Stock currently held by the Reporting Persons may be resold publicly only following their effective registration under the Securities Act of 1934, as amended, or pursuant to an exemption from the registration requirements of that Act. On April 14, 1997, T.L.L. purchased 400,000 shares of the STDE Series A 8% Convertible Preferred Stock of STDE ("Series A Preferred Stock"). On April 15, 1997, STDE filed a Statement of Designation with the Secretary of State of Texas ("Series A Statement of Designations") 9 CUSIP NO. 840553 13D PAGE 9 OF 14 PAGES designating the voting powers, preferences and rights of 400,000 shares of the Series A Preferred Stock authorized by its board of directors (the Series A Statement of Designations is attached hereto as "Exhibit 1"). Under terms of the Series A Statement of Designations, each share of Series A Preferred Stock is entitled to a liquidation preference of $2.00 plus cumulative unpaid dividends prior to distributions with respect to STDE's Common Stock. Holders of the Series A Preferred Stock are entitled to dividends at the rate of 8% of the initial liquidation value of $2.00 per share, when declared by the STDE board of directors, on a cumulative basis in priority to all dividends on Common Stock. The Series A Preferred Stock may be redeemed at the election of STDE at any time beginning on the third anniversary of the issuance date for $2.00 per share plus cumulated but unpaid dividends, provided that the average price of STDE Common Stock equals or exceeds $2.50 per share for the preceding thirty day period. Each share of Series A Preferred Stock was initially convertible into 2 shares of Common Stock at the election of the holder and due but unpaid dividends, if any, were initially convertible into Common Stock at the rate of $.50 per share. Under terms of the Series A Statement of Designations, the conversion rate of the Series A Preferred Stock is subject to adjustment on the date of its third and seventh anniversary of issuance depending on the trading value of the Common Stock. If the average trading price of the Common Stock over the thirty day period immediately preceding the third anniversary date (the "Three-Year Market Price for Series A Conversion") is less than $1.00 per share, then the number of shares of Common Stock into which each share of Series A Preferred Stock is convertible will be the quotient of $2.00 divided by such Three-Year Market Price for Series A Conversion. If the average trading price of the Common Stock over the thirty day period immediately preceding the seventh anniversary date (the "Seven-Year Market Price for Series A Conversion") is less than the Three-Year Market Price for Series A Conversion, then the number of shares of Common Stock into which each share of Series A Preferred Stock is convertible will be the quotient of $2.00 divided by such Seven-Year Market Price for Series A Conversion. Due but unpaid dividends, if any, are convertible into Common Stock at a rate equal to the lesser of 1) $.50 per share or 2) the Three-Year Market Price for Series A Conversion or the Seven-Year Market Price for Series A Conversion, as applicable, for each share of Common Stock. On October 4, 2000, T.L.L. converted 400,000 shares of Series A Preferred Stock into 800,000 shares of Common Stock. On or about January 9, 1998, STDE filed a Statement of Designation with the Secretary of State of Texas ("Series B Statement of Designations") designating the voting powers, preferences and rights of 184,615 shares Series B 8% Convertible Preferred Stock of STDE ("Series B Preferred Stock"), authorized by its board of directors (the Series B Statement of Designations is attached hereto as "Exhibit 2"). On January 20, 1998, T.L.L. purchased 153,915 shares and Temple Interests purchased 30,700 shares of Series B Preferred Stock. The shares of the STDE Common Stock beneficially owned by the Reporting Persons include shares of the Series B Preferred Stock. Under terms of the Series B Statement of Designations, each share of Series B Preferred Stock is entitled to a liquidation preference of $16.25 plus cumulative unpaid dividends prior to distributions with respect to STDE's Common Stock. Holders of the Series B Preferred Stock are entitled to dividends at the rate of 8% of the initial liquidation value of $16.25 per share, when 10 CUSIP NO. 840553 13D PAGE 10 OF 14 PAGES declared by the STDE board of directors, on a cumulative basis in priority to all dividends on Common Stock. Each share of Series B Preferred Stock was initially convertible into 5 shares of Common Stock at the election of the holder and due but unpaid dividends, if any, were initially convertible into Common Stock at the rate of $1.625 per share. Under terms of the Series B Statement of Designations, the conversion rate of the Series B Preferred Stock is subject to adjustment on the date of its third and seventh anniversary of issuance depending on the trading value of the Common Stock. If the average trading price of the Common Stock over the thirty day period immediately preceding the third anniversary date (the "Three-Year Market Price for Series B Conversion") is less than $3.25 per share, then the number of shares of Common Stock into which each share of Series B Preferred Stock is convertible will be the quotient of $16.25 divided by such Three-Year Market Price for Series B Conversion. If the average trading price of the Common Stock over the thirty day period immediately preceding the seventh anniversary date (the "Seven-Year Market Price for Series B Conversion") is less than the Three-Year Market Price for Series B Conversion, then the number of shares of Common Stock into which each share of Series B Preferred Stock is convertible will be the quotient of $16.25 divided by such Seven-Year Market Price for Series B Conversion. Due but unpaid dividends, if any, are convertible into Common Stock at a rate equal to the lesser of 1) $1.625 per share or 2) the Three-Year Market Price for Series B Conversion or the Seven-Year Market Price for Series B Conversion, as applicable, for each share of Common Stock. On January 20, 2001 (the third anniversary of the issuance date of the Series B Preferred Stock) the conversion rate was adjusted to 6.4948 shares of Common Stock for each share of Series B Preferred Stock. The Series B Preferred Stock may be redeemed at the election of STDE at any time beginning one year after the issuance date for $16.25 per share plus cumulated but unpaid dividends, provided that the average price of STDE Common Stock equals or exceeds $5.00 per share for the preceding thirty day period. On June 21, 2001, STDE announced that all outstanding Series B Preferred Stock would be redeemed on August 22, 2001 unless earlier converted. T.L.L. and Temple Interests intend to convert 153,915 shares and 30,700 shares of Series B Preferred Stock, into 999,647 shares and 199,390 shares of Common Stock, respectively, on or before August 21, 2001. The board of directors of STDE has proposed and recommended a number of amendments to STDE's Articles of Incorporation which are to be considered and acted on by the shareholders of STDE at their annual meeting to be held August 17, 2001. Those proposals include the amendment and restatement of certain provisions of the STDE Articles of Incorporation which would, among other things: (i) increase the number of authorized shares of Common Stock from 30,000,000 to 100,000,000, increase the number of authorized shares of preferred stock from 1,000,000 to 10,000,000 and increase the authority of the STDE board of directors to establish new series of preferred stock to the fullest extent provided for in the Texas Business Corporation Act; (ii) change the structure of STDE's board of directors to a classified board divided into three classes with staggered terms of office and provide that members of the STDE board of directors may not be removed except for cause and (iii) increase the minimum percentage of the outstanding shares of STDE capital stock necessary to call a special meeting of shareholders from 10% to 50%. Adoption of the proposals to amend the STDE Articles of Incorporation requires the affirmative vote of at least two-thirds of the votes entitled to be cast (including the outstanding Series B Preferred Stock voting 11 CUSIP NO. 840553 13D PAGE 11 OF 14 PAGES together with the Common Stock) and two-thirds of Series B Preferred Stock, voting as a separate class. AT THE PRESENT TIME, EACH OF THE REPORTING PERSONS INTENDS TO VOTE IN FAVOR OF MANAGEMENT'S PROPOSED AMENDMENTS, HOWEVER, ANY OR ALL OF THE REPORTING PERSONS MAY INDEPENDENTLY DECIDE TO WITHHOLD ITS VOTE OR TO VOTE AGAINST ONE OR MORE OF THE PROPOSED AMENDMENTS BASED ON FURTHER EVALUATION OF THE PROPOSED AMENDMENTS AND THEIR IMPLICATIONS. Except as described above, at the present time none of the Reporting Persons has any present plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of STDE, or the disposition of securities of STDE; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving STDE or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of STDE or any of its subsidiaries; (d) Any change in the present board of directors or management of STDE, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of STDE; (f) Any other material change in STDE's business or corporate structure; (g) =Changes in STDE's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of STDE by any person; (h) Causing a class of securities of STDE to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of STDE becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) Any action similar to any of those enumerated above. ITEM 5. INTEREST IN SECURITIES OF ISSUER. (a) As set forth in this Schedule 13D, T.L.L. owns 1,799,647 shares of Common Stock of STDE (giving effect to the conversion of 153,915 shares of Series B Preferred Stock for 999,647 shares of Common Stock by T.L.L.). The 1,799,647 shares of Common Stock represent approximately 11.5% of the outstanding Common Stock of STDE. 12 CUSIP NO. 840553 13D PAGE 12 OF 14 PAGES As further set forth in this Schedule 13D, Temple Interests owns 199,391 shares of Common Stock of STDE (giving effect to the conversion of 30,700 shares of Series B Preferred Stock for 199,391 shares of Common Stock by Temple Interests). The 199,391 shares of Common Stock represent approximately 1.3% of the outstanding Common Stock of STDE. Giving effect to the conversion of all Series B Preferred Stock held by the Reporting Persons (184,615 shares) Arthur Temple, III and the Reporting Persons as a group beneficially own 1,999,037 shares of Common Stock representing approximately 12.6% of the outstanding Common Stock of STDE. (b) T.L.L., acting through its board of trustees comprised of Arthur Temple, Arthur Temple, III, Ward Burke, Phillip Leach, W. Temple Webber, Jr. and H.J. Shands, III possess a shared power to direct the vote and a shared power to direct the disposition of the 1,799,647 shares of Common Stock held by T.L.L. described in Item 5(a) above. Arthur Temple, III, in his capacity as Chairman of the Board of Trustees of T.L.L., possesses a shared power to vote and direct the disposition of the 1,799,647 shares of Common Stock held by T.L.L. described in Item 5(a) above. Arthur Temple, III, Temple Southwood and ATSP as the general partners of Temple Interests, possesses a shared power to direct the vote and a shared power to direct the disposition of the 199,391 shares of Common Stock held by Temple Interests described in Item 5(a) above. (c) T.L.L. purchased 400,000 shares of Series A Preferred Stock on April 14, 1997 which were converted into 800,000 shares of Common Stock on October 20, 2000. T.L.L. purchased 153,915 shares of Series B Preferred Stock on January 20, 1998 which it intends to convert into 999,647 shares of Common Stock on or before August 21, 2001 in response to STDE's June 21, 2001 notice of redemption of all outstanding shares of Series B Preferred Stock on August 22, 2001. Also, in response to STDE's June 21, 2001 notice of redemption, Temple Interests has expressed its intent to convert 30,700 shares of Series B Preferred Stock held by Temple Interests (acquired on January 20, 1998) into 199,391 shares of Common Stock of STDE on or before August 21, 2001. (d) No person other than the Reporting Persons is known to have the right to direct the receipt of dividends from, or the proceeds from the sale of, such securities beneficially owned by the Reporting Persons. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF ISSUER. To the best knowledge of the Reporting Persons, there are no contracts, agreements, arrangements, understandings or relationships (legal or otherwise) between the persons enumerated in Item 2 and any other person with respect to the securities of STDE other than those described in items 4 and 5 above, including, but not limited to, transfer or voting arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1 Certificate of Designation of Series A 8% Convertible Preferred Stock 13 CUSIP NO. 840553 13D PAGE 13 OF 14 PAGES Exhibit 2 Certificate of Designation of Series B 8% Convertible Preferred Stock Exhibit 3 Power of Attorney of Temple Interests, Ltd. Exhibit 4 Joint Filing Agreement between the Reporting Persons. 14 CUSIP NO. 840553 13D PAGE 14 OF 14 PAGES SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: August 14, 2001 T.L.L. TEMPLE FOUNDATION By: /s/ ARTHUR TEMPLE, III ------------------------------------- Name: Arthur Temple, III Title: Chairman of the Board of Trustees Dated: August 14, 2001 TEMPLE INTERESTS, LTD. By: TEMPLE SOUTHWOOD, INC. its Managing General Partner By: /s/ ARTHUR TEMPLE, III ------------------------------- Arthur Temple, III President, Secretary and Treasurer Dated: August 14, 2001 /s/ ARTHUR TEMPLE, III --------------------------------------- ARTHUR TEMPLE, III Dated: August 14, 2001 TEMPLE SOUTHWOOD, INC., By: /s/ ARTHUR TEMPLE, III ------------------------------------- Name: Arthur Temple, III Title: President, Secretary and Treasurer Dated: August 14, 2001 ATSP PARTNERSHIP, LTD., By: ARTHUR TEMPLE, INC. its General Partner By: /s/ ARTHUR TEMPLE ------------------------------------- Name: Arthur Temple Title: President 15 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - -------- ----------- Exhibit 1 Certificate of Designation of Series A 8% Convertible Preferred Stock Exhibit 2 Certificate of Designation of Series B 8% Convertible Preferred Stock Exhibit 3 Power of Attorney of Temple Interests, Ltd. Exhibit 4 Joint Filing Agreement between the Reporting Persons.
EX-99.1 3 h89993ex99-1.txt CERTIFICATE OF DESIGNATION OF SERIES A STOCK 1 EXHIBIT 1 CERTIFICATE OF DESIGNATION OF SERIES A 8% CONVERTIBLE PREFERRED STOCK 1. Designation. The series of Preferred Stock established by this resolution shall be designated "Series A 8% Convertible Preferred Stock," which 400,000 shares shall be designated having a par value of $2.00 per share. 2. Preferences, Limitations and Rights of Series A 8% Convertible Preferred Stock. (A) General. Except as otherwise expressly provided by law, shares of Series A 8% Convertible Preferred Stock shall have only the preferences and relative rights expressly stated in this Certificate of Designation. (B) Dividends. (1) Amount; Time. Each share of Series A 8% Convertible Preferred Stock at the time outstanding shall be entitled to receive, when and as declared by the Board of Directors, out of any funds legally available therefor, dividends at the rate of 8% of the initial liquidation value of $2.00 for each share per annum and no more. (2) Cumulativity. Dividends payable in respect of Series A 8% Convertible Preferred Stock shall accrue from day to day, whether or not earned or declared and shall be cumulative. Accumulation or dividends on the Series A 8% Convertible Preferred Stock shall not bear interest. (3) Priority Over Common Stock; Restriction on Purchases of Common Stock. No dividend shall be declared or paid on the Corporation's Common Stock ("Common Stock"), unless any dividends on outstanding Series A 8% Convertible Preferred Stock for the current dividend period shall have been declared and paid. No Common Stock shall be purchased for cash or tangible assets by the Corporation so long as any Series A 8% Convertible Preferred Stock remains outstanding. (C) Liquidation Preference. In the event of dissolution, liquidation, or winding up of the Corporation (whether voluntary or involuntary), after payment or provision for payment of debts but before any distribution to the holders of Common Stock, the holders of Series A Convertible Preferred Stock then outstanding shall be entitled to receive $2.00 per share, and an amount per share equal to cumulated but unpaid dividends in respect of such shares or Series A 8% Convertible Preferred Stock, and no more. All remaining assets shall be distributed pro rata among the holders of Common Stock. If the assets distributable among the holders of Series A 8% Convertible Preferred Stock are insufficient to permit full payment to them, the entire assets shall be distributed among the holders of the Series A 8% Convertible Preferred Stock. Neither the consolidation, merger, or reorganization of the Corporation with any other corporation or corporations, nor the purchase or redemption by 1 2 the Corporation of any of its outstanding shares shall be deemed to be dissolution, liquidation, or winding up within the meaning of this paragraph. (D) Redemption at Option of Corporation. (1) Right; Method. All of the Series A Convertible Preferred Stock may be redeemed at or following the third anniversary of the issuance of any such Series A Convertible Preferred Stock at the option of the Corporation, by resolution of the Board of Directors, provided that the Thirty Day Average Stock Transaction Price of the Corporation's Common Stock shall equal or exceed $2.50 for the Thirty Day Trading Period immediately preceding the sending of notice of redemption as provided below. The "Thirty Day Average Stock Transaction Price" shall mean the average price, without regard to volume, of the last reported trade or the Corporation's Common Stock on any nationally recognized exchange or trading system such as the NASDAQ Electronic Bulletin Board or the inter-broker trading system commonly known as the "pink sheets." The "Thirty Day Trading Period" shall mean the period which consists of thirty consecutive days, whether or not any shares or Common Stock of the Corporation are actually traded in each of such days, when the exchanges or trading systems in which the Corporation's Common Stock is trading are open, without regard to weekends, holidays or other days when such exchanges or trading systems are closed. (2) Notice. Notice shall be in writing and given to the holders of shares to be redeemed, either personally or by mail, not less than sixty nor more than ninety days before the date fixed for redemption. (E) Manner of Payment Upon Any Redemption. (1) Payment. Holders or redeemed shares shall be paid in cash an amount equal to par plus cumulated but unpaid dividends, and no more. (2) Provision for Payment. On or before the date fixed for redemption, the Corporation may provide for payment of a sum sufficient to redeem the shares called for redemption either (a) by setting aside the sum, separate from its other funds, in trust for the benefit of the holders of the shares to be redeemed, or (b) by depositing such sum in a bank or trust company (either one in Texas having capital and surplus of at least. $20,000,000 according to its latest. statement of condition, or one anywhere in the United States duly appointed and acting as transfer agent of the Corporation) as a trust fund, with irrevocable instructions and authority to the bank or trust company to give or complete the notice of redemption and to pay to the holders of the shares to be redeemed, on or after the date fixed for redemption, the redemption price on surrender of their respective share certificates. The holders of shares to be redeemed may be evidenced by a list certified by the Corporation (by its president or a vice president and by its secretary or an assistance secretary) or by its transfer agent, it the Corporation so provides for payment, then from and after the date fixed for redemption (a) the shares shall be deemed to be redeemed, (b) such setting aside or deposit shall be deemed to constitute full payment for the shares, (c) the shares shall no longer be deemed to be outstanding, (d) the holders thereof shall 2 3 cease to be shareholders with respect to such shares, and (e) the holders shall have no rights with respect thereto except. the right to receive (without interest) their proportionate shares of the funds so set aside or deposited upon surrender of their respective certificates. Any interest accrued on funds so set aside or deposited shall belong to the Corporation. If the holders or the shares do not, within six years after such deposit, claim any amount so deposited for redemption thereof, the bank or trust company shall upon demand pay over to the Corporation the balance or the funds so deposited, and the bank or trust company shall thereupon be relieved of all responsibility to such holders. If fewer than all outstanding shares of Series A Convertible Preferred Stock are to be redeemed, the Corporation shall determine which shares shall be redeemed by lot, pro rata, or other methods determined to be appropriate by the Corporation. (F) Status of Redeemed Shares. Shares of Series A 8% Convertible Preferred Stock which are redeemed shall be canceled and shall be restored to the status of authorized but unissued shares. (G) Purchase. Except as specified in Section 2 (B) (3) of this Designation, nothing herein shall limit the right of the Corporation to purchase any of its outstanding shares in accordance with law, by public or private transaction. (H) Voting. Each share of Series A 8% Convertible Preferred Stock shall have the same voting rights as the shares of the Corporation's Common Stock into which it may be converted. (I) Rights of Conversion. The holders of Series A 8% Convertible Preferred Stock shall have the conversion rights as follows: (1) Right to Convert. (i) Initial Rights. Each share of Series A 8% Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share and prior to the close of business on any date fixed for redemption which applies to such share, at the office of the Corporation or any transfer agent for the Series A 8% Convertible Preferred Stock, into two shares of Common Stock in respect of each share of Series A 8% Convertible Preferred Stock and one share of Common Stock for each $.50 of due but unpaid dividends on such share or Series A 8% Convertible Preferred Stock converted; provided, however, that the number of shares of Common Stock into which each share of Series A 8% Convertible Preferred Stock may be converted shall be subject to adjustment as follows: (ii) Rights at Three Years. If, at the third anniversary of the date of issuance of any Series A 8% Convertible Preferred Stock, the Thirty Day Average Stock Transaction Price of Common Stock during the immediately preceding Thirty Day Trading Period (the 3 4 "Three Year Conversion Price") is below $1.00, the number of shares of Common Stock to be received upon conversion of each share of Series A 8% Convertible Preferred Stock shall be determined by dividing the sum of Two Dollars by the Three Year Conversion Price, and to the extent of any due but unpaid dividends on shares of Series A 8% Convertible Preferred Stock converted, the amount of such due but unpaid dividends shall likewise be convertible into Common Stock at a rate of $.50 or the amount of the Three Year Conversion Price, whichever is lesser, for each share of Common Stock (the "Three Year Conversion Rate"). The Three Year Conversion Rate shall remain in effect thereafter unless adjusted at the 7th anniversary date of the issuance of any Series A 8% Convertible Preferred Stock. (iii) Rights at Seven Years. If, at the seventh anniversary of the date of issuance or any Series A 8% Convertible Preferred Stock, the Thirty Day Average Stock Transaction Price of Common Stock during the immediately preceding Thirty Day Trading Period (the "Seven Year Conversion Price") is below the Three Year Conversion Price, the number of shares of Common Stock to be received upon conversion of each share of Series A 8% Convertible Preferred Stock shall be determined by dividing the sum of Two Dollars by the Seven Year Conversion Price, and to the extent of any due but unpaid dividends on shares of Series A 8% Convertible Preferred Stock converted, the amount of such due but unpaid dividends shall likewise be convertible into Common Stock at a rate of $.50 or the amount of the Seven Year Conversion Price, whichever is lesser, for each share of Common Stock (the "Seven Year Conversion Rate"). The Seven Year Conversion Rate shall remain in effect at all times from and after the seventh anniversary date of the issuance of any Series A 8 % Convertible Preferred Stock. (iv) Conversion After Redemption Notice. In the event of a call for redemption of any shares of Series A 8% Convertible Preferred Stock, the conversion rights shall terminate as to the shares designated for redemption at the close of business on the date fixed for redemption, unless default is made in payment of the redemption price (2) Mechanics of Conversion. Before any holder of Series A 8% Convertible Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or: certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series A 8% Convertible Preferred Stock, and shall give written notice by mail, postage prepaid, to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series A 8% Convertible Preferred Stock, or to the nominee or nominees of such holder, a 4 5 certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A 8% Convertible Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversions shall be treated for all purposes as the record holder or holders of such shares or Common Stock as or such date. (3) Adjustments in the Average Stock Transaction Price Thresholds and in the Number of shares Issuable Upon Conversion. The Average Stock Transaction price thresholds referred to in Section 2D, and 2I (the "Price Thresholds") and the number of shares of Common Stock issuable upon the conversion of Series A 8% Convertible Preferred Stock shall be subject to adjustments from time to time as follows: (i) In the event the Corporation should at any time or from time to time fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the shares of Common Stock into which the Series A 8% Convertible Preferred Stock may be converted shall include any such Stock Equivalents which may be issued from time to time to the same effect as if the Series A 8% Convertible Preferred Stock had been converted into shares of Common stock on the date of its issuance. Likewise, the Price Thresholds shall as of such record date, apply to the Common Stock plus the Stock Equivalents issued in respect of such Common Stock on such record date. (ii) If the number of shares of Common Stock outstanding at any time is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the conversion ratio for the Series A 8% Convertible Preferred Stock shall be appropriately adjusted so that the number of shares of Series A 8% Convertible Preferred Stock surrendered on conversion for each two shares of Common Stock to be issued shall be increased in proportion to such decrease in outstanding shares of Common Stock. Likewise, the Price Thresholds shall be increased in proportion to such decrease in outstanding shares of Common Stock (iii) In the case of any reorganization of the Corporation or consolidation of the Corporation with or any merger of the Corporation with or into another entity or in case of any sale or transfer to another entity of the 5 6 property of the Corporation as an entirety or substantially as an entirety, the corporation or other entity resulting from such reorganization, or consolidation or surviving such merger or to which such sale or transfer shall be made, as the case may be, shall make suitable provisions so that the Series A 8% Convertible Preferred Stock shall thereafter be convertible into the kind and amount of shares of common stock or other securities or property receivable upon such reorganization, consolidation, merger, sale or transfer by the holder of the number of shares of Common Stock into which such shares of Series A 8% Convertible Preferred Stock might have been converted immediately prior to such consolidation, merger, sale or transfer. Likewise, the Price Thresholds shall apply to the shares of common stock or other securities or property receivable upon such reorganization, merger, consolidation, sale or transfer, as appropriately adjusted to reflect the amount of common stock or other securities or property received by a holder of one share of Common Stock upon such reorganization, merger, consolidation, transfer or sale. The provisions of this subparagraph (iii) shall similarly apply to successive reorganizations, consolidations, mergers, sales or transfers. (iv) In the event that the Corporation effects a split, subdivision of its Common Stock, or in the event that the number of shares of its Common Stock is decreased by a combination of the outstanding shares of Common Stock, the Price Thresholds shall be appropriately adjusted so that the Price Thresholds are raised or decreased in proportion to the number of outstanding 6 7 shares of the Corporation's Common Stock resulting from such split, subdivision or combination as compared to the number of shares of Common Stock outstanding immediately prior to such split, subdivision or combination. 3. No Senior Capital Stock Authorized as to Dividend Priority or Liquidation. The Corporation shall not authorize or issue, or obligate itself to authorize or issue, any other equity security senior to the Series A 8% Convertible Preferred Stock as to priority or payment of dividends or liquidation preference. 7 EX-99.2 4 h89993ex99-2.txt CERTIFICATE OF DESIGNATION OF SERIES B STOCK 1 EXHIBIT 2 CERTIFICATE OF DESIGNATION OF SERIES B 8% CONVERTIBLE PREFERRED STOCK 1. Designation. The series of Preferred Stock established by this resolution shall be designated "Series B 8% Convertible Preferred Stock," of which 184,615 shares shall be designated having a par value of $1.00 per share. 2. Preferences, Limitations and Rights of Series B 8% Convertible Preferred Stock. (A) General. Except as otherwise expressly provided by law, shares of Series B 8% Convertible Preferred Stock shall have only the preferences and relative rights expressly stated in this Certificate of Designation. (B) Dividends. (1) Amount; Time. Each share of Series B 8% Convertible Preferred Stock at the time outstanding shall be entitled to receive, when and as declared by the Board of Directors, out of any funds legally available therefor, dividends at the rate of 8% of the initial liquidation value or $16.25 for each share per annum and no more. (2) Cumulativity. Dividends payable in respect of Series B 8% Convertible Preferred Stock shall accrue from day to day, whether or not earned or declared and shall be cumulative. Accumulation of dividends on the Series B 8% Convertible Preferred Stock shall not bear interest. (3) Priority Over Common Stock; Restriction an Purchases of Common Stock. No dividend shall be declared or paid on the Corporation's Common Stock ("Common Stock"), unless any dividends on outstanding Series B 8% Convertible Preferred Stock for the current dividend period shall have been declared and paid. No Common stock shall be purchased for cash or tangible assets by the Corporation so long as any Series B 8% Convertible Preferred Stock remains outstanding. (C) Liquidation Preference. In the event or dissolution, liquidation, or winding up of the Corporation (whether voluntary or involuntary), after payment or provision for payment of debts and after the payment to of the Liquidation Preference owing to the holders of the Corporation's Series A 8% Convertible Preferred Stock, but before any distribution to the holders of Common Stock, the holders of Series B Convertible Preferred Stock then outstanding shall be entitled to receive $16.25 per share, and an amount per share equal to cumulated but unpaid dividends in respect of such shares of Series B 8% Convertible Preferred Stock, and no more. All remaining assets shall be distributed pro rata among the holders of Common Stock. If the assets distributable among the holders or Series B 8% Convertible Preferred Stock are insufficient to permit full payment to them, the entire remaining assets (after the payment of or provision for payment of debts and after the payment to of the Liquidation Preference owing to the holders of the Corporation's Series A 8% Convertible Preferred Stock) shall be distributed among the holders of the Series B 8% Convertible Preferred Stock. Neither the consolidation, merger, or reorganization of the 1 2 Corporation with any other corporation or corporations, nor the purchase or redemption by the Corporation of any of its outstanding shares shall be deemed to be dissolution, liquidation, or winding up within the meaning of this paragraph. (D) Redemption at Option of Corporation. (1) Right; Method. All of the Series B Convertible Preferred Stock may be redeemed at or following the first anniversary of the issuance of any such Series B Convertible Preferred Stock at the option of the Corporation, by resolution of the Board of Directors, provided that (i) the Thirty Day Average Stock Transaction Price or the Corporation's Common Stock shall equal or exceed $5.00 for the Thirty Day Trading Period immediately preceding the sending of notice of redemption as provided below, and (ii) to the extent that any such redemption may occur during the three year period following the issuance of such Series B Convertible Preferred Stock, during such Thirty Day Trading Period, the Corporation's Common Stock is listed on the NASDAQ Stock Market, the NASDAQ Small Cap quotation system, the American Stock Exchange or any successor to such trading exchanges. The "Thirty Day Average Stock Transaction Price" shall mean the average price, without regard to volume, of the last reported trade or the Corporation's Common Stock on any nationally recognized exchange or trading system such as the NASDAQ Electronic Bulletin Board or the inter-broker trading system commonly known as the "pink sheets." The "Thirty Day Trading Period" shall mean the period which consists of thirty consecutive days, whether or not any shares of Common Stock of the Corporation are actually traded in each of such days, when the exchanges or trading systems in which the Corporation's Common Stock is trading are open, without regard to weekends, holidays or other days when such exchanges or trading systems are closed. (2) Notice. Notice shall be in writing and given to the holders of shares to be redeemed, either personally or by mail, not less than sixty nor more than ninety days before the date fixed for redemption. (E) Manner of Payment Upon Any Redemption. (1) Payment. Holders of redeemed shares shall be paid in cash an amount equal to $16.25 plus cumulated but unpaid dividends, and no more. (2) Provision for Payment. On or before the date fixed for redemption, the Corporation may provide for payment of a sum sufficient to redeem the shares called for redemption either (a) by setting aside the sum, separate from its other funds, in trust for the benefit of the holders or the shares to be redeemed, or (b) by depositing such sum in a bank or trust company (either one in Texas having capital and surplus or at least $20,000,000 according to its latest statement of condition, or one anywhere in the United States duly appointed and acting as transfer agent of the Corporation) as a trust fund, with irrevocable instructions and authority to the bank or trust company to give or complete the notice of redemption and to pay to the holders of the shares to be redeemed, on or after the date fixed for redemption, the redemption price on surrender of their respective share certificates. The holders of shares to be 2 3 redeemed may be evidenced by a list certified by the Corporation (by its president or a vice president and by its secretary or an assistance secretary) or by its transfer agent. If the Corporation so provides for payment, then from and after the date fixed for redemption (a) the shares shall be deemed to be redeemed, (b) such setting aside or deposit shall be deemed to constitute full payment for the shares, (c) the shares shall no longer be deemed to be outstanding, (d) the holders thereof shall cease to be shareholders with respect to such shares, and (e) the holders shall have no rights with respect thereto except the right to receive (without interest) their proportionate shares of the funds so set aside or deposited upon surrender of their respective certificates. Any interest accrued on funds so set aside or deposited shall belong to the Corporation. If the holders of the shares do not, within six years after such deposit, claim any amount so deposited for redemption thereof, the bank or trust company shall upon demand pay over to the Corporation the balance of the funds so deposited, and the bank or trust company shall thereupon be relieved of all responsibility to such holders. If fewer than all outstanding shares of Series B Convertible Preferred Stock are to be redeemed, the Corporation shall determine which shares shall be redeemed by lot, pro rata, or other methods determined to be appropriate by the Corporation. (F) Status of Redeemed Shares. Shares of Series B 8% Convertible Preferred Stock which are redeemed shall be canceled and shall be restored to the status of authorized but unissued shares. (G) Purchase. Except as specified in Section 2(B)(3) of this Designation, nothing herein shall limit the right of the Corporation to purchase any of its outstanding shares in accordance with law, by public or private transaction. (H) Voting. Each share of Series B 8% Convertible Preferred Stock shall have the same voting rights as the shares of the Corporation's Common Stock into which it may be converted. (I) Rights of Conversion. The holders of Series B 8% Convertible Preferred Stock shall have the conversion rights as follows: (1) Right to Convert. (i) Initial Rights. Each share of Series B 8% Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share and prior to the close of business on any date fixed for redemption which applies to such share, at the office of the Corporation or any transfer agent for the Series B 8% Convertible Preferred Stock, into five shares of Common Stock in respect of each share of Series B 8% Convertible Preferred Stock and one share of Common Stock for each $1.625 of due but unpaid dividends on such share of Series B 8% Convertible Preferred Stock converted; provided, however, that the number of shares of Common Stock into which each share of Series B 8% Convertible Preferred Stock may be converted shall be subject to adjustment as follows: 3 4 (ii) Rights at Three Years. If, at the third anniversary of the date of issuance of any Series B 8% Convertible Preferred Stock, the Thirty Day Average Stock Transaction Price of Common Stock during the immediately preceding Thirty Day Trading Period (the "Three Year Conversion Price") is below $3.25, the number of shares of Common Stock to be received upon conversion of each share of Series B 8% Convertible Preferred Stock shall be determined by dividing the sum of $16.25 by the Three Year Conversion price, and to the extent of any due but unpaid dividends on shares of Series B 8% Convertible Preferred Stock converted, the amount of such due but unpaid dividends shall likewise be convertible into Common Stock at a rate of $1.625 or the amount of the Three Year Conversion price, whichever is lesser, for each share of Common Stock (the "Three Year Conversion Rate"). The Three Year Conversion Rate shall remain in effect thereafter unless adjusted at the 7th anniversary date of the issuance of any Series B 8% Convertible Preferred Stock. (iii) Rights at Seven Years. If, at the seventh anniversary of the date of issuance of any Series B 8% Convertible Preferred Stock, the Thirty Day Average Stock Transaction Price of Common Stock during the immediately preceding Thirty Day Trading Period (the "Seven Year Conversion Price") is below the Three Year Conversion price, the number of shares of Common Stock to be received upon conversion of each share of Series B 8% Convertible Preferred Stock shall be determined by dividing the sum of $16.25 by the Seven Year Conversion price, and to the extent of any due but unpaid dividends on shares of Series B 8% Convertible Preferred Stock converted, the amount of such due but unpaid dividends shall likewise be convertible into Common Stock at a rate of $1.625 or the amount of the Seven Year Conversion price, whichever is lesser, for each share of Common Stock (the "Seven Year Conversion Rate"). The Seven Year Conversion Rate shall remain in effect at all times from and after the seventh anniversary date of the issuance of any Series B 8% Convertible Preferred Stock. (iv) Conversion After Redemption Notice. In the event of a call for redemption of any shares of Series B 8% Convertible Preferred Stock, the conversion rights shall terminate as to the shares designated for redemption at the close of business on the date fixed for redemption, unless default is made in payment of the redemption price. (2) Mechanics or Conversion. Before any holder of Series B 8% Convertible Preferred stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series B 8% Convertible Preferred Stock, and shall give written notice by mail, postage prepaid, to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series B 8% Convertible Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series 4 5 B 8% Convertible Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversions shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. (3) Adjustments in the Average Stock Transaction Price Thresholds and in the Number of Shares Issuable Upon Conversion. The Average Stock Transaction Price thresholds referred to in Section 2D, and 2I (the "Price Thresholds") and the number of shares of Common Stock issuable upon the conversion of Series B 8% Convertible Preferred Stock shall be subject to adjustments from time to time as follows: (i) In the event the Corporation should at any time or from time to time fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock the determination of holders of Common stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the shares of Common Stock into which the Series B 8% Convertible Preferred Stock may be converted shall include any such Stock Equivalents which may be issued from time to time to the same effect as if the Series B 8% Convertible Preferred Stock had been converted into shares of Common Stock on the date of its issuance. Likewise, the Price Thresholds shall as of such record date, apply to the Common Stock plus the Stock Equivalents issued in respect of such Common Stock on such record date. (ii) If the number of shares of Common Stock outstanding at any time is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the conversion ratio for the Series B 8% Convertible Preferred Stock shall be appropriately adjusted so that the number of shares of Series B 8% Convertible Preferred Stock surrendered on conversion for each five shares of Common Stock to be issued shall be increased in proportion to such decrease in outstanding shares of Common Stock. Likewise, the Price Thresholds shall be increased in proportion to such decrease in outstanding shares of Common Stock. (iii) In the case of any reorganization or the Corporation or consolidation of the Corporation with or any merger of the Corporation with or into another entity or in case of any sale or transfer to another entity of the property of the Corporation as an entirety or substantially as an entirety, the corporation or other entity resulting from such reorganization, or consolidation or surviving such merger or to which such sale or transfer shall be made, as the case may be, shall make suitable provisions so that the Series B 8% Convertible Preferred Stock shall thereafter be convertible into the kind and amount of shares of common stock or other securities or property receivable upon such reorganization, consolidation, merger, sale or transfer by the holder of the number of shares of Common Stock into which such shares of Series 5 6 B 8% Convertible preferred Stock might have been converted immediately prior to such consolidation, merger, sale or transfer. Likewise, the Price Thresholds shall apply to the shares of common stock or other securities or property receivable upon such reorganization, merger, consolidation, sale or transfer, as appropriately adjusted to reflect the amount of common stock or other securities or property received by a holder of one share of Common Stock upon such reorganization, merger, consolidation, transfer or sale. The provisions of this subparagraph (iii) shall similarly apply to successive reorganizations, consolidations, mergers, sales or transfers. (iv) In the event that the Corporation effects a split, subdivision of its Common Stock, or in the event that the number of shares of its Common Stock is decreased by a combination of the outstanding shares of Common Stock, the Price Thresholds shall be appropriately adjusted so that the Price Thresholds are raised or decreased in proportion to the number of outstanding shares of the Corporation's Common Stock resulting from such split, subdivision or combination as compared to the number of shares of Common Stock outstanding immediately prior to such split, subdivision or combination. 3. No Senior Capital Stock Authorized as to Dividend Priority or Liquidation. The Corporation shall not authorize or issue, or obligate itself to authorize or issue, any other equity security senior to the Series B 8% Convertible Preferred Stock as to priority of payment of dividends or liquidation preference. 6 EX-99.3 5 h89993ex99-3.txt POWER OF ATTORNEY OF TEMPLE INTERESTS LTD 1 EXHIBIT 3 POWER OF ATTORNEY The undersigned do hereby make, constitute and appoint Arthur Temple, III, acting jointly or singly, the undersigned's attorney-in-fact (hereinafter referred to as "Attorney") with power to act for the undersigned and in the undersigned's name, place and stead, with or without the other and with full power of substitution and resubstitution, for the sole purpose of executing, making, declaring, certifying and filing on behalf of the undersigned with the Securities and Exchange Commission, and other appropriate governmental or private entities, any and all statements, reports and other information required to be filed by the undersigned under the Securities Exchange Act of 1934, as amended, or other state or federal statutes, by virtue of or relating to the undersigned's beneficial ownership of equity securities of South Texas Drilling and Exploration, Inc., including without limitation any Schedule 13D, any and all amendments to any such schedule, any Joint Filing Agreement and any and all amendments thereto, any Form 3, 4 or 5 and any and all amendments thereto, and all other documents and information incidental or related thereto required to be executed, made or filed by the undersigned, in the form and manner in which such Attorney deems necessary, appropriate, convenient or desirable to be done pursuant to and in accordance with the authorization contained in this Power of Attorney, as fully and to all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts of the Attorneys and each of them. IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on August 14, 2001. T.L.L. TEMPLE FOUNDATION By: -------------------------------------- Name: Arthur Temple, III Title: Chairman of the Board of Trustees TEMPLE INTERESTS, LTD. By: TEMPLE SOUTHWOOD, INC. its Managing General Partner By: ------------------------------ Arthur Temple, III President, Secretary and Treasurer ------------------------------------ ARTHUR TEMPLE, III 1 2 TEMPLE SOUTHWOOD, INC., By: ------------------------------------- Name: Arthur Temple, III Title: President, Secretary and Treasurer ATSP PARTNERSHIP, LTD., By: ARTHUR TEMPLE, INC. its Managing Partner By: ----------------------------- Name: Arthur Temple Title: President 2 EX-99.4 6 h89993ex99-4.txt JOINT FILING AGREEMENT 1 EXHIBIT 4 JOINT FILING AGREEMENT The undersigned each agree that the Statement on Schedule 13D relating to the Common Stock, $.10 par value, of South Texas Drilling & Exploration, Inc. is adopted and filed on behalf of each of them, (ii) all future amendments to such Statement on Schedule 13D will, unless written notice to the contrary is delivered as described below, be jointly filed on behalf of each of them, and (iii) the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934 apply to each of them. This Agreement may be terminated with respect to the obligation to jointly file future amendments to such Statement on Schedule 13D as to any of the undersigned upon such person giving written notice thereof to the other person signatory hereto, at the principal office thereof. This Agreement may be executed in any number of counterparts all of which taken together shall constitute one and the same instrument. T.L.L. TEMPLE FOUNDATION By: ----------------------------------- Name: Arthur Temple, III Title: Chairman of the Board of Trustees TEMPLE INTERESTS, LTD. By: TEMPLE SOUTHWOOD, INC. its Managing General Partner By: ------------------------------ Arthur Temple, III President, Secretary and Treasurer ------------------------------------ ARTHUR TEMPLE, III 1 2 TEMPLE SOUTHWOOD, INC., By: ---------------------------------- Name: Arthur Temple, III Title: President, Secretary and Treasurer ATSP PARTNERSHIP, LTD., By: ARTHUR TEMPLE, INC. its Managing Partner By: -------------------------- Name: Arthur Temple Title: President 2 3 SCHEDULE I (to Item 2) TRUSTEES OF T.L.L. TEMPLE FOUNDATION AND GENERAL PARTNERS OF TEMPLE INTERESTS, LTD. The name, residence or business address, present principal occupation or employment, and citizenship of each trustee of T.L.L., of each officer and director of Southwood, and of each partner of ATSP, Ltd. are as set forth below.
NAME AND POSITION RESIDENCE OR BUSINESS WITH RESPECT TO T.L.L. ADDRESS CITIZENSHIP - --------------------- --------------------- ----------- Arthur Temple 109 Temple Blvd., Suite 100 United States Trustee (Chairman Emeritus) Lufkin, Texas 75901-7321 Arthur Temple, III 109 Temple Blvd., Suite 200 United States (Trustee Chairman) Lufkin, Texas 75901-7321 Ward Burke 109 Temple Blvd., Suite 300 United States Trustee Lufkin, Texas 75901-7321 * Phillip Leach 109 Temple Blvd., Suite 300 United States Trustee (Secretary, and Treasurer) Lufkin, Texas 75901-7321 W. Temple Webber, Jr. 2001 Kirby Drive, Suite 1200 United States Trustee Houston, Texas 77019 H.J. Shands, III P.O. Box 610 United States Trustee Diboll, Texas 75941-0610
NAME AND POSITION RESIDENCE OR BUSINESS WITH RESPECT TO SOUTHWOOD ADDRESS CITIZENSHIP - ------------------------- ---------------------- ----------- Arthur Temple, III 109 Temple Blvd., Suite 200 United States President, Secretary, and Treasurer Lufkin, Texas 75901-7321 * Ellen Temple 109 Temple Blvd., Suite 200 United States Vice President and Director Lufkin, Texas 75901-7321
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NAME AND POSITION RESIDENCE OR BUSINESS WITH RESPECT TO ARTHUR TEMPLE, INC. ADDRESS CITIZENSHIP - ----------------------------------- ---------------------- ----------- Arthur Temple 109 Temple Blvd., Suite 100 United States President Lufkin, Texas 75901-7321
Arthur Temple is retired. Ward Burke is retired. H.J. Shands, III is President of First Bank & Trust of East Texas at the address set forth above. Ellen Temple is engaged primarily in work for charitable and community service organizations. * The principal occupation of the named person is the position indicated in the table. 2 -----END PRIVACY-ENHANCED MESSAGE-----