-----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, JI4nRI1Su2r0Rtu/6ZO2/AOIcdj4NvzbyvZOE+20KMhdh03XmSU3KpXOF4Bk4xJQ 28UASR3mCwhzIlSE47YdvQ== /in/edgar/work/20000814/0000930661-00-002020/0000930661-00-002020.txt : 20000921 0000930661-00-002020.hdr.sgml : 20000921 ACCESSION NUMBER: 0000930661-00-002020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WISER OIL CO CENTRAL INDEX KEY: 0000107874 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 550522128 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12640 FILM NUMBER: 696750 BUSINESS ADDRESS: STREET 1: 8115 PRESTON RD STE 400 CITY: DALLAS STATE: TX ZIP: 75225 BUSINESS PHONE: 2142650080 MAIL ADDRESS: STREET 1: 8115 PRESTON ROAD STREET 2: SUITE 400 CITY: DALLAS STATE: TX ZIP: 75225 10-Q 1 0001.txt FORM 10-Q =============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter ended June 30, 2000 Commission file number 0-5426 THE WISER OIL COMPANY A DELAWARE CORPORATION I.R.S. Employer Identification No. 55-0522128 8115 Preston Road, Suite 400 Dallas, Texas 75225 Telephone (214) 265-0080 Former name, former address and former fiscal year, if changed since last report. NONE Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. x --- --- Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding at June 30, 2000 ------------- ---------------------------- $.01 par value 8,951,965 =============================================================================== THE WISER OIL COMPANY PART I FINANCIAL INFORMATION Item 1. Financial Statements The consolidated condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly present such information. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies, normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. 2 THE WISER OIL COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31, 2000 1999 ---------- ----------- (000's) except share data Assets Current Assets: Cash and cash equivalents....................................... $ 30,806 $ 21,447 Restricted cash................................................. 992 992 Accounts receivable............................................. 11,652 9,565 Inventories..................................................... 332 335 Prepaid expenses................................................ 872 379 ------------------------ Total current assets........................................ 44,654 32,718 ------------------------ Property, Plant and Equipment, at cost: Oil and gas properties (successful efforts method).............. 284,292 274,760 Other properties................................................ 3,951 3,781 ------------------------ 288,243 278,541 Accumulated depreciation, depletion and amortization............ (127,315) (118,568) ------------------------ Net property, plant and equipment............................... 160,928 159,973 Other Assets..................................................... 3,656 4,035 ------------------------ $ 209,238 $ 196,726 ======================== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable................................................ $ 11,134 $ 11,694 Current portion of long-term debt............................... 500 500 Dividends payable............................................... 100 -- Accrued liabilities............................................. 3,745 2,649 --------- --------- Total current liabilities..................................... 15,479 14,843 --------- --------- Long Term Debt................................................... 124,563 124,526 Deferred Benefit Cost............................................ -- 216 Deferred Income Taxes............................................ -- -- Stockholders' Equity (Note 2): Series C convertible preferred stock - $10 par value; 1,000,000 shares authorized; shares issued and outstanding at June 30, 2000 - 600,000 at $25 liquidation value per share.. 6,000 -- Common stock - $.01 par value at June 30, 2000 and $3 par value at December 31, 1999; shares authorized - 30,000,000 at June 30, 2000 and 20,000,000 at December 31, 1999; shares issued - 9,128,169; shares outstanding - 8,951,965...... 91 27,385 Paid-in capital................................................. 38,201 3,223 Retained earnings............................................... 26,569 28,234 Foreign currency translation.................................... 1,064 1,028 Treasury stock; 176,204 shares, at cost......................... (2,729) (2,729) --------- --------- Total stockholders' equity.................................... 69,196 57,141 --------- --------- $ 209,238 $ 196,726 ========= =========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 3 THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months For the Six Months -------------------- ------------------ Ended June 30, Ended June 30, --------------- -------------- 2000 1999 2000 1999 ------- ------- ------- ------- (000's except per share data) Revenues: Oil and gas sales......................... $16,200 $10,964 $30,878 $22,569 Interest income........................... 399 139 696 165 Other..................................... 260 2,875 450 3,115 ------------------ ------------------ 16,859 13,978 32,024 25,849 ------------------ ------------------ Costs and Expenses: Production and operating.................. 6,139 4,532 11,418 9,854 Purchased natural gas..................... - - - 336 Depreciation, depletion and amortization.. 3,929 4,650 7,731 10,088 Property impairments...................... 680 - 680 - Exploration............................... 784 481 2,240 1,375 General and administrative................ 3,474 1,772 5,176 3,291 Interest expense.......................... 3,176 3,598 6,344 7,004 ------------------ ------------------ 18,182 15,033 33,589 31,948 ------------------ ------------------ (Loss) Before Income Taxes.................. (1,323) (1,055) (1,565) (6,099) Income Tax (Benefit)........................ - - - (686) ------------------ ------------------ Net (Loss).................................. (1,323) (1,055) (1,565) (5,413) Preferred Stock Dividends................... (100) - (100) - ------------------ ------------------ Net (Loss) Available to Common Stock........ $(1,423) $(1,055) $(1,665) $(5,413) ================== ================== Weighted Average Outstanding Shares......... 8,952 8,952 8,952 8,952 ================== ================== (Loss) Per Share: Basic...................................... ($0.16) ($0.12) ($0.19) ($0.60) ================== ================== Diluted.................................... ($0.16) ($0.12) ($0.19) ($0.60) ================== ==================
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 4 THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Six Months Ended June 30, 2000
Foreign Common Preferred Paid-in Retained Currency Treasury Total Stock Stock Capital Earnings Translation Stock --------- --------- --------- --------- --------- ----------- --------- (000's) December 31, 1999.................... $57,141 $ 27,385 $ -- $ 3,223 $28,234 $1,028 $(2,729) Net (loss) (242) -- -- -- (242) -- -- Other comprehensive income, net of tax...................... 3 -- -- -- -- 3 -- ------- Comprehensive (loss)................. (239) -- -- -- -- -- -- ------- -------- --------- -------- -------- ----------- -------- March 31, 2000....................... 56,902 27,385 -- 3,223 27,992 1,031 (2,729) Net (loss) (1,323) -- -- -- (1,323) -- -- Other comprehensive income, net of tax...................... 33 -- -- -- -- 33 -- ------- Comprehensive (loss)................. (1,290) Issuance of Series C preferred stock 600,000 shares, net of issuance costs.............................. 13,675 -- 6,000 7,675 -- -- -- Issuance of warrants................. 9 -- -- 9 -- -- -- Change in par value of common stock.. -- (27,294) -- 27,294 -- -- -- Dividends - preferred stock.......... (100) -- -- -- (100) -- -- ------- -------- --------- -------- -------- ----------- -------- June 30, 2000........................ $69,196 $ 91 $6,000 $38,201 $26,569 $1,064 $(2,729) ======= ======== ========= ======== ======== =========== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 5 THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months -------------------- Ended June 30, -------------------- 2000 1999 -------- -------- (000's) Cash Flows From Operating Activities: Net (Loss).................................................... $ (1,565) $ (5,413) Adjustments to reconcile net income to operating cash flows: Depreciation, depletion and amortization.................... 7,731 10,088 Deferred income taxes....................................... - (686) Property sale gains......................................... (11) (2,922) Foreign currency translation................................ 36 (92) Property impairments and abandonments....................... 1,701 939 Amortization of other assets................................ 338 242 Other Changes: Accounts receivable....................................... (2,087) 212 Restricted cash........................................... - - Inventories............................................... 3 58 Prepaid expenses.......................................... (493) (305) Other assets.............................................. 78 (176) Accounts payable.......................................... (560) (1,400) Accrued liabilities....................................... 1,096 (465) Deferred benefits cost.................................... (216) (17) -------- -------- Operating Cash Flows................................... 6,051 63 -------- -------- Cash Flows From Investing Activities: Capital expenditures.......................................... (10,387) (4,454) Proceeds from sales of property, plant and equipment.......... 11 40,857 -------- -------- Investing Cash Flows................................... (10,376) 36,403 -------- -------- Cash Flows From Financing Activities: Payments on long term debt.................................... - (20,500) Preferred stock issued, net of issuance costs................. 13,675 - Warrants for common stock issued.............................. 9 - -------- -------- Investing Cash Flows................................... 13,684 (20,500) -------- -------- Net Increase In Cash............................................. 9,359 15,966 Cash and Cash Equivalents, beginning of period................... 21,447 2,779 -------- -------- Cash and Cash Equivalents, end of period......................... $ 30,806 $ 18,745 ======== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 6 THE WISER OIL COMPANY Notes to Financial Statements Note 1. Hedging Activities As of August 14, 2000 the Company's hedging arrangements were as follows:
Crude Oil: Daily Volume Price ---------- ------------ ----- July 1, 2000 to September 30, 2000 3,400 Bbls $21.07 per Bbl October 1, 2000 to December 31, 2000 3,300 Bbls $19.78 per Bbl Natural Gas: ------------ February 1, 2000 to September 30, 2000 5,261 MMBTU (1) $2.29 per MMBTU (1) February 1, 2000 to September 30, 2000 5,226 MMBTU (1)(2) $2.01 (Put) per MMBTU (1)(2) March 1, 2000 to September 30, 2000 5,174 MMBTU (1)(2) $2.20 (Put) per MMBTU (1)(2)
(1) Average for period. (2) The 5,226 MMBTU per day the and 5,174 MMBTU per day natural gas hedges are "Put" agreements whereby the Company will receive the actual market price if the actual market price is above the put prices of $2.01 and $2.20 per MMBTU, respectively. If the actual market price is below the put price, the price received by the Company will be limited to the put price. During the first half of 2000, oil and gas sales were reduced $4.0 million from the Company's hedging activities. Based on June 30, 2000 NYMEX futures prices, the fair value of the Company's hedging arrangements at June 30, 2000 was a loss of $6.9 million. A 10% increase in both the oil price and the gas price would increase this loss by $2.1 million and a 10% decrease in both the oil price and the gas price would decrease this loss by $2.1 million. Note 2. Convertible Preferred Stock On December 13, 1999, the Board of Directors approved the sale of not less than 600,000 shares and not more than 1,000,000 shares of Series C Cumulative Convertible Preferred Stock ("Preferred Stock") through a private placement to Wiser Investment Company, LLC ("WIC") for $25 million. The sale of Preferred Stock was approved by the Company's shareholders' on May 16, 2000, and 600,000 shares were issued to WIC on May 26, 2000 for $15 million, or $25 per share. WIC has the option, until November 25, 2000, to purchase up to an additional 400,000 shares of Preferred Stock for $10.0 million, or $25 per share. The Preferred Stock is convertible at the option of the holder into shares of the Company's common stock at a conversion price of $4.25 per common share, subject to customary adjustments. The Preferred Stock pays dividends in cash or in shares of the Company's common stock, at the option of the Company, at an annual rate of 7%. The holders of the Preferred Stock have the same voting rights as the holders of the Company's common stock with each share of the Preferred Stock having one vote for each share of common stock into which it is convertible. The Company received $13.7 million in net proceeds from the sale of Preferred Stock to WIC. 7 THE WISER OIL COMPANY Notes to Financial Statements (continued) Any shares of Preferred Stock not previously converted will convert automatically to common stock on May 26, 2003, or whenever the market price of the Company's common stock exceeds $10.00 per share for a period of 60 consecutive trading days. In addition, WIC acquired warrants to purchase 445,030 shares of the Company's common stock at $4.25 per share. If WIC fully exercises its option to purchase an additional 400,000 shares of Preferred Stock, WIC would be issued warrants to purchase an additional 296,686 shares of the Company's common stock at $4.25 per share. The purchase price of the warrants is $0.02 per warrant. The warrants are not exercisable for two years and will expire after seven years. In connection with the sale of the Preferred Stock, the Board of Directors has been changed to include four of the existing directors and three new directors designated by WIC. The transaction also affected the employment agreements for all four of the officers of the Company. If an officer's employment with the Company is terminated by either the Company or the officer within one year after the transaction, the Company will be required to make a lump-sum termination payment, as defined in the employment agreement, to the terminated officer. The total amount of such termination payments for all of the Company's officers is estimated to be in the range of $2.9 million to $3.1 million. In the second quarter of 2000, three of the Company's four officers were terminated and the Company recognized $2.2 million of expense related to such terminations which is included in general and administrative expense in the Consolidated Statements of Income. In May 2000, the Company also adopted an amended and restated certificate of incorporation which increased the number of authorized shares of common stock from 20,000,000 to 30,000,000, and the number of authorized shares of preferred stock from 300,000 shares to 1,3000,000 shares. The par value of the common stock was also decreased from $3.00 per share to $.01 per share. Note 3. Summary of Guaranties of 9 1/2% Senior Subordinated Notes In May 1998, the Company issued $125 million aggregate principal amount of its 9 1/2% Senior Subordinated Notes due 2007 pursuant to an offering exempt from registration under the Securities Act of 1933. The notes are unsecured obligations of the Company, subordinated in right of payment to all existing and any future senior indebtedness of the Company. The notes rank pari passu with any future senior subordinated indebtedness and senior to any future junior subordinated indebtedness of the Company. The notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior subordinated basis by certain wholly owned subsidiaries of the Company (the "Subsidiary Guarantors"). At the time of the initial issuance of the notes, Wiser Oil Delaware, Inc., The Wiser Marketing Company, Wiser Delaware LLC, T.W.O.C., Inc. and The Wiser Oil Company of Canada were the Subsidiary Guarantors (the "Initial Subsidiary Guarantors"). Except for two wholly owned 8 THE WISER OIL COMPANY Notes to Financial Statements (continued) subsidiaries that are inconsequential to the Company on a consolidated basis, the Initial Subsidiary Guarantors comprise all of the Company's direct and indirect subsidiaries. Sections 13 and 15(d) of the Securities Exchange Act of 1934 require presentation of the following unaudited summarized financial information of the Subsidiary Guarantors. The Company has not presented separate financial statements and other disclosures concerning each Subsidiary Guarantor because such information is not material to investors. There are no significant contractual restrictions on distributions from each of the Subsidiary Guarantors to the Company.
THE WISER OIL COMPANY Subsidiary Guarantors ------------------------------------------ The Wiser Wiser T.W.O.C. Marketing Combined Canada(1) Inc. Company Total ---------- -------- --------- --------- (000's) Revenues - -------- For the quarter ended June 30, 2000..... $ 6,362 $ - $ - $ 6,362 For the quarter ended June 30, 1999..... 3,615 - - 3,615 For the six months ended June 30,1999... 11,656 - - 11,656 For the six months ended June 30, 1999.. 6,773 - 523 7,296 Income (Loss) Before Income Taxes - --------------------------------- For the quarter ended June 30, 2000..... 2,107 - - 2,107 For the quarter ended June 30, 1999..... 345 - - 345 For the six months ended June 30, 2000.. 3,288 - - 3,288 For the six months ended June 30, 1999.. (165) - 68 (97) Net Income (Loss) - ----------------- For the quarter ended June 30, 2000..... 2,107 - - 2,107 For the quarter ended June 30, 1999..... 345 - - 345 For the six months ended June 30, 2000.. 3,288 - - 3,288 For the six months ended June 30, 1999.. (165) - 68 (97) Cash Flows from Operating Activities - ------------------------------------ For the quarter ended June 30, 2000..... 3,289 - - 3,289 For the quarter ended June 30, 1999..... 520 - - 520 For the six months ended June 30, 2000.. 6,254 - - 6,254 For the six months ended June 30, 1999.. 2,372 - 68 2,440 Cash Flows from Investing Activities - ------------------------------------ For the quarter ended June 30, 2000..... (1,570) - - (1,570) For the quarter ended June 30, 1999..... (875) - - (875) For the six months ended June 30, 2000.. (5,900) - - (5,900) For the six months ended June 30, 1999.. (3,242) - - (3,242)
9 THE WISER OIL COMPANY Notes to Financial Statements (continued)
THE WISER OIL COMPANY Subsidiary Guarantors ------------------------------------------ The Wiser Wiser T.W.O.C. Marketing Combined Canada(1) Inc. Company Total ---------- -------- --------- --------- (000's) Cash Flows from Financing Activities - ------------------------------------ For the quarter ended June 30, 2000..... $ - $ - $ - $ - For the quarter ended June 30, 1999..... - - - - For the six months ended June 30, 2000.. - - - - For the six months ended June 30, 1999.. - - - - Net Increase (Decrease) in Cash - ------------------------------- For the quarter ended June 30, 2000..... 1,719 - - 1,719 For the quarter ended June 30, 1999..... (355) - - (355) For the six months ended June 30, 2000.. 354 - - 354 For the six months ended June 30, 1999.. (870) - 68 (802) Current Assets - -------------- June 30, 2000........................... 6,811 3 - 6,814 December 31, 1999....................... 5,357 3 - 5,360 Total Assets - ------------ June 30, 2000........................... 51,026 3 - 51,029 December 31, 1999....................... 47,953 3 - 47,956 Current Liabilities - ------------------- June 30, 2000........................... 5,445 - - 5,445 December 31, 1999....................... 5,116 - - 5,116 Noncurrent Liabilities - ---------------------- June 30,1999............................ 18,471 - - 18,471 December 31, 1998....................... 17,851 - - 17,851 Stockholder's Equity - -------------------- June 30,1999............................ 27,110 3 - 27,113 December 31, 1998....................... 24,986 3 - 24,989
(1) Includes the accounts of Wiser Oil Delaware, Inc., Wiser Delaware LLC and The Wiser Oil Company of Canada. See other notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 10 THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Quarters Ended June 30, 2000 and June 30, 1999 Revenues for the second quarter of 2000 increased $2.9 million or 21% from the second quarter of 1999, due to significantly higher oil and gas prices received in the second quarter of 2000 which was offset by lower oil and gas production. Oil sales for the second quarter of 2000 were $1.9 million higher than the second quarter of 1999 as the average price received for oil sales in the first quarter of 2000 was $21.87 per barrel, up $6.76 per barrel or 45% from the second quarter of 1999. Net oil production for the first quarter of 2000 was 386,000 barrels, down 46,000 barrels or 11% from 432,000 barrels in the second quarter of 1999. Oil production from the Maljamar and Wellman fields in the second quarter of 2000 was approximately 23,000 barrels lower than the first quarter of 1999 and Canadian oil production in the second quarter of 2000 was approximately 12,000 barrels lower than the second quarter of 1999 due primarily to declining oil production from the Provost and Evi fields. In addition, the property sales in the second quarter of 1999 accounted for approximately 14,000 barrels of the decline in oil production. Gas sales for the second quarter of 2000 were $2.8 million higher than the second quarter of 1999 due to higher realized prices which was partially offset by lower gas production. The average price received for gas sales in the second quarter of 2000 was $2.77 per Mcf, an increase of $1.29 per Mcf or 87% from the second quarter of 1999. Net gas production for the second quarter of 2000 was 2,362 MMCF, down 147 MMCF or 6% from the second quarter of 1999. The property sales in the second quarter of 1999 accounted for approximately 207 MMCF of the decline in gas production and gas production from the San Juan field increased in the second quarter of 2000 by 111 MMCF from the second quarter of 1999. NGL sales for the second quarter of 2000 were $0.5 million higher than the second quarter of 1999 as the average price received for NGL sales in the second quarter of 2000 was $20.62 per barrel, an increase of $9.31 per barrel or 82% from the second quarter of 1999. During the second quarter of 2000, oil and gas sales were reduced by $2.6 million from the Company's hedging activities. There were no adjustments to oil and gas sales for hedging activities in the second quarter of 1999. Other revenues in the second quarter of 1999 included a gain of $2.9 million from property sales. Production and operating expense for the second quarter of 2000 increased $1.6 million or 35% from the second quarter of 1999 and, on a BOE basis, production and operating expense in the second quarter of 2000 increased to $7.32 per BOE or 48% from $4.96 per BOE during the second quarter of 1999. The increase in production and operating expense was attributable primarily to the Maljamar and Wellman fields which were $1.7 million higher in the second quarter of 2000 than the second quarter of 1999. The higher production and operating expense at the Maljamar and Wellman fields in the second quarter of 2000 was attributable to well repairs and maintenance at both fields and higher CO2 injection at Wellman. Depreciation, depletion and amortization, ("DD&A") for the second quarter of 2000, decreased $0.7 million or 16% from the second quarter of 1999 due primarily to lower oil and gas production and the oil and gas property sales discussed above. Impairment expense of $0.7 million was recognized in the second quarter of 2000 based on the Company's current intent to sell the Elm field in Canada. The remaining carrying value of the Elm field is $2.1 million at June 30, 2000 after the impairment. The Company intends to sell the Elm field within the next year. There was no impairment expense in the second quarter of 1999. Exploration 11 THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Quarters Ended June 30, 2000 and June 30, 1999 (continued) expense for the second quarter of 2000 was $0.8 million, up $0.3 million from the second quarter of 1999 due to increased exploration activities in the second quarter of 2000. General and administrative expense in the second quarter of 2000 was $3.5 million, up $1.8 million from the second quarter of 1999 due primarily to $2.2 million of officer termination expense and offset by reduced payroll expense. Interest expense during the second quarter of 2000 was $3.2 million, down $0.4 million or 12% from the second quarter of 1999 due to fees in the second quarter of 1999 associated with refinancing the Credit Agreement with NationsBank of Texas, N.A. ("Credit Agreement") with the Restated Credit Agreement with Bank One, Texas, N.A. The net loss before income taxes of $1.3 million in the second quarter of 2000 and $1.1 million in the second quarter of 1999 will generate income tax benefits only if the net loss can be carried forward and applied against future taxable income. Since full realization of the future income tax benefits associated with these net losses is not "more likely than not" at this time, no income tax benefits were recognized in the second quarter of 2000 or the second quarter of 1999. The Company realized a net loss available for common stock of $1.4 million and net loss per share of $0.16 in the second quarter of 2000 compared to a net loss available for common stock of $1.1 million and net loss per share of $0.12 during the second quarter of 1999. Comparison of Six Months Ended June 30, 2000 and June 30, 1999 Revenues for the first half of 2000 increased $6.2 million or 24% from the first half of 1999, due to significantly higher oil and gas prices received in the first half of 2000 which was offset by lower oil and gas production. Oil sales for the first half of 2000 were $5.0 million higher than the first half of 1999 as the average price received for oil sales in the first half of 2000 was $22.68 per barrel, up $9.80 per barrel or 76% from the first half of 1999. Net oil production for the first half of 2000 was 747,000 barrels, down 184,000 barrels or 20% from 931,000 barrels in the first half of 1999. The property sales in the first half of 1999 accounted for approximately 55,000 barrels of the decrease and oil production from the Maljamar and Wellman fields in the first half of 2000 was approximately 64,000 barrels lower than the first half of 1999. Canadian oil production in the first half of 2000 was approximately 67,000 barrels lower than the first half of 1999 due primarily to declining oil production from the Provost and Evi fields. Gas sales for the first half of 2000 were $2.3 million higher than the first half of 1999 due to higher realized prices which was partially offset by lower gas production. The average price received for gas sales in the first half of 2000 was $2.50 per Mcf, an increase of $0.91 per Mcf or 57% from the first half of 1999. Net gas production for the first half of 2000 was 4,604 MMCF, down 1,209 MMCF or 21% from the first half of 1999. The property sales in the first half of 1999 accounted for approximately 1,190 MMCF of the decrease in gas production. NGL sales for the first half of 2000 were $1.1 million 12 THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Six Months Ended June 30, 2000 and June 30, 1999 (continued) higher than the first half of 1999 as the average price received for NGL sales in the first half of 2000 was $20.52 per barrel, an increase of $10.83 per barrel or 112% from the first half of 1999. During the first half of 2000, oil and gas sales were reduced by $4.0 million from the Company's hedging activities. There were no adjustments to oil and gas sales for hedging activities in the first half of 1999. Interest income of $0.7 million in the first half of 2000 was $0.5 million than the first half of 1999 due to higher average cash balances in the first half of 2000. Other revenues in the first half of 1999 included a gain of $2.9 million from property sales. Production and operating expense for the first half of 2000 increased $1.6 million or 16% from the first half of 1999 and, on a BOE basis (excluding 148 MMCF of gas purchased for resale during the first half of 1999), increased to $7.00 per BOE or 43% from $4.90 per BOE. The increase in production and operating expense was attributable primarily to the Maljamar and Wellman fields which were $2.7 million higher in the first half of 2000 than the first half of 1999 due to well repairs and maintenance at both fields and higher CO2 injection at Wellman. Production and operating expense in the first half of 1999 included approximately $1.2 million associated with the properties sold in the second quarter of 1999. Depreciation, depletion and amortization, ("DD&A") for the first half of 2000, decreased $2.4 million or 23% from the first half of 1999 due primarily to lower oil and gas production and the property sales in the second quarter of 1999. Impairment expense of $0.7 million was recognized in the first half of 2000 based on the Company's current intent to sell the Elm field in Canada. The remaining carrying value of the Elm field is $2.1 million at June 30, 2000 after the impairment. The Company intends to sell the Elm field within the next year. There was no impairment expense in the first half of 1999. Exploration expense for the first half of 2000 was $2.2 million, up $0.8 million from the first half of 1999 due to increased exploration activities in the first half of 2000 including approximately $1.0 million of dry hole expense in Canada for the Waskahigan 8-7 well. General and administrative expense in the first half of 2000 was $5.2 million, up $1.9 million from the first half of 1999 due primarily to $2.2 million of officer termination expense and offset by reduced payroll expense. Interest expense during the first half of 2000 was $6.3 million, down $0.7 million or 10% from the first half of 1999 due to reduced borrowings in the first half of 2000 compared the first half of 1999 and fees in the first half of 1999 associated with refinancing the Credit Agreement with NationsBank of Texas, N.A. ("Credit Agreement") with the Restated Credit Agreement with Bank One, Texas, N.A. The net loss before income taxes of $1.6 million in the first half of 2000 and $6.1 million in the first half of 1999 will generate income tax benefits only if the net loss can be carried forward and applied against future taxable income. Since full realization of the future income tax benefits associated with the net loss is not "more likely than not" at this time, no income tax benefits were recognized in the first half of 2000 and income tax benefits were recognized in the first half of 1999 only to the extent of the Company's existing deferred income tax liability of $0.7 million. 13 THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Six Months Ended June 30, 2000 and June 30, 1999 (continued) The Company realized a net loss available for common stock of $1.6 million and net loss per share of $0.19 in the first half of 2000 compared to a net loss available for common stock of $5.4 million and net loss per share of $0.60 during the first half of 1999. Operating cash flows during the first half of 1999 were $6.1 million, up $6.0 million from the first half of 1999 primarily as a result of increased oil and gas sales which were offset in part by higher production and operating expense and higher general and administrative expense. Capital expenditures during the first half of 1999 were $10.4 million, up $5.9 million from the first half of 1999. The Company's capital and exploration budget for 2000 is approximately $15 million. The Company received $40.9 million in net sales proceeds from the sale of oil and gas properties during the first half of 1999 compared to $0.01 million in proceeds received during the first half of 2000. On a cash basis, the Company paid $6.0 million in interest expense in the first half of 2000 and no income taxes were paid in the first half of 2000. Item 3. Quantitative and Qualitative Disclosures About Market Risk See Note 1 "Hedging Activities". 14 THE WISER OIL COMPANY PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) A special meeting of stockholders of The Wiser Oil Company was held in Dallas, Texas, at 9:00 a.m., local time, on May 16, 2000 to vote on the following two proposals: Proposal One - To approve the sale of Preferred Stock to WIC as described under Note 2 to Item 1. - Financial Statements. Proposal Two - To approve and adopt a new Restated Certificate of Incorporation of the Company which increased the number of authorized shares of Common and Preferred Stock, decreased the par value of the Common Stock, and deleted certain anti-takeover provisions. (b) Out of a total of 8,951,965 shares of Common Stock outstanding and entitled to vote as of the April 10, 2000 record date, 5,430,864 shares were present in person or by proxy, representing approximately 61 percent of outstanding shares. The only matters voted on by the stockholders, as fully described in the proxy statement for the special meeting, was the approval of Proposal One and Proposal Two. The results of voting were as follows: Number of Shares ------------------------------------------------------------ Item Voting For Voting Against Abstaining Broker Non-Votes - ------------ ---------- -------------- ---------- ---------------- Proposal One 4,517,204 840,898 46,262 26,500 Proposal Two 4,551,371 813,258 39,735 26,500 15 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -------- The information required by this Item 6 (a) is set forth in the Index to Exhibits accompanying this quarterly report and is incorporated herein by reference. (b) Reports on Form 8-K ------------------- 1. The Company filed a report on Form 8-K on June 5,2000 disclosing under Item 5. thereof that on May 25, 2000, the Company closed the sale of 600,000 shares of 7% cumulative convertible preferred stock to an investment group led by Wiser Investment Company, LLC for $15 million and it appointed George K. Hickox, Jr. as Chairman of the Board and Chief Executive Officer replacing Andrew J. Shoup, Jr., and A. Wayne Ritter as President of the Company, and that Richard R. Schreiber and Scott W. Smith were appointed to the Board of Directors, replacing Messrs. Howard G. Hamilton and John W. Cushing, III, who have resigned. 16 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE WISER OIL COMPANY -------------------------- (Registrant) Date: August 14, 2000 /s/ George K. Hickox, Jr. ---------------------------------------- George K. Hickox, Jr. Chairman of the Board and Chief Executive Officer Date: August 14, 2000 /s/ Richard S. Davis ---------------------------------------- Richard S. Davis Vice President of Finance 17 THE WISER OIL COMPANY Index to Exhibits Exhibit Number Exhibit - ------ ------- 3.1* Restated Certificate of Incorporation of the Company. 3.2* Restated Bylaws of the Company. 3.3* Certificate of Designation, Preferences and Rights of Series B Preferred Stock of the Company. 3.4* Certificate of Designations of Series C Cumulative Convertible Preferred Stock of the Company. 10.16* Employment Agreement dated as of May 26, 2000 between the Company and George K. Hickox, Jr. 10.17 Management Agreement dated as of May 26, 2000 between the Company and Wiser Investment Company, LLC, incorporated by reference to Exhibit 7.7 to Schedule 13D filed by Wiser Investment Company, LLC on June 28, 2000. 10.18 Stockholder Agreement dated as of May 26, 2000 among the Company, Wiser Investment Company, LLC and Dimeling, Schreiber and Park, incorporated by reference to Exhibit 7.6 to Schedule 13D filed by Wiser Investment Company, LLC on June 28, 2000. 10.19 Warrant Agreement dated as of May 26, 2000 between the Company and Wiser Investment Company, LLC, incorporated by reference to Exhibit 7.3 to Schedule 13D filed by Wiser Investment Company, LLC on June 28, 2000. 27* Financial Data Schedule * Filed herewith. 18 EX-3.1 2 0002.txt RESTATED CERTIFICATE OF INCORPORATION EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF THE WISER OIL COMPANY The Wiser Oil Company, a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), hereby certifies as follows: 1. The present name of the Corporation is The Wiser Oil Company. The Corporation was originally incorporated under the name Petex-Wiser Corporation, the original Certificate of Incorporation having been filed with the Secretary of State of Delaware on September 16, 1970. 2. The within Restated Certificate of Incorporation restates and integrates and also further amends the provisions of the Corporation's Certificate of Incorporation as heretofore amended or supplemented. The within Restated Certificate of Incorporation was duly adopted in accordance with the provisions of Section 242 and Section 245 of the General Corporation Law of the State of Delaware. 3. The text of the Corporation's Certificate of Incorporation as heretofore amended or supplemented is hereby restated and further amended to read in its entirety as follows: First: The name of the Corporation is The Wiser Oil Company. Second: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. Third: The nature of the business and purposes to be conducted and promoted by the Corporation is to conduct any lawful business, to promote any lawful purpose and to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. Fourth: The aggregate number of shares of all classes of capital stock which the Corporation shall have authority to issue is 31,300,000 shares, of which 30,000,000 shares shall be Common Stock of the par value of $.01 per share and 1,300,000 shares shall be Preferred Stock of the par value of $10 per share. Upon the filing of this Restated Certificate of Incorporation with the Secretary of State of Delaware, each outstanding and treasury share of Common Stock, par value $3 per share, of the Corporation is hereby immediately and automatically reclassified as and converted into one outstanding or treasury share of new Common Stock of the par value of $.01 per share. Each person who, at the time of such filing, is the holder of a certificate or certificates evidencing shares of the then outstanding Common Stock of the Corporation will thereafter be entitled, upon surrendering such person's certificates to the Corporation at its principal place of business, to receive in exchange therefor one or more certificates representing the number of shares of the new Common Stock of the Corporation into which such person's aggregate number of shares of Common Stock will have been so reclassified and converted. The Preferred Stock may be issued from time to time in one or more series. Each series of Preferred Stock shall be distinctively designated by letter or descriptive words. All series of Preferred Stock shall rank equally and be identical in all respects except as set forth in the resolutions of the Board of Directors of the Corporation providing for the issue of such stock. Authority is hereby expressly vested in the Board of Directors from time to time to issue the Preferred Stock as Preferred Stock of any series, and in connection with the creation of each such series to fix by resolution or resolutions providing for the issue of shares thereof the voting powers, if any, the designation, the preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions, of such series to the full extent now or hereafter permitted by the laws of the State of Delaware. Fifth: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating the powers of the Corporation and its directors and stockholders: (a) Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide. (b) The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Restated Certificate of Incorporation, and to merge, sell its assets and take other corporate action, to the extent and in the manner now or hereafter permitted or prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. Sixth: Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for this Corporation under the provisions of section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorgani zation of this Corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on 2 all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation. Seventh: Section 7.1. Management of Business and Affairs. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. Section 7.2. Composition of Board. The Board of Directors shall be comprised as follows: (a) Number. The whole Board of Directors shall consist of such number of persons, not less than 3 nor more than 14, as may from time to time be determined by the Board pursuant to a resolution adopted by a two-thirds vote of all the directors in office. (b) Classification; Term of Office. Beginning with the Board of Directors to be elected at the annual meeting of stockholders to be held in 1985, the directors shall be classified, in respect to the time for which they shall severally hold office, by dividing them into three classes, each such class to be as nearly equal in number as possible. At the annual meeting of stockholders to be held in 1985, separate elections shall be held for the directors of each class, the term of office of directors of the first class to expire at the first annual meeting after their election; the term of office of the directors of the second class to expire at the second annual meeting after their election; and the term of office of the directors of the third class to expire at the third annual meeting after their election. At each succeeding annual meeting, the stockholders shall elect directors of the class whose term then expires, to hold office until the third succeeding annual meeting. Each director shall hold office for the term for which elected and until his or her successor is elected and qualified or until his or her earlier resignation or removal. (c) Removal of Directors. Stockholders may remove a director or the entire Board of Directors from office at any time only for cause and only by vote of two-thirds of the Voting Power of the outstanding shares of Voting Stock of the Corporation, voting together as a single class. The term "Voting Stock" at any time shall mean the outstanding shares of capital stock of the Corporation entitled to vote at its next annual election of directors (without consideration of the rights of any class of stock other than the Common Stock to elect directors by a separate class vote); and a specified percentage of "Voting Power", with reference to any matter being voted upon by the stockholders, shall mean such number of shares of stock as shall enable the holders thereof to cast such percentage of the total number of votes entitled to be cast by holders of shares entitled to vote thereon. (d) Vacancies. Vacancies in the Board of Directors, including newly created directorships resulting from an increase in the number of directors, shall be filled only by a two-thirds vote of all the directors in office. All directors elected to fill vacancies shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of an incumbent director. 3 (e) Preferred Stock Directors. If at any time the holders of any class or series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, none of the foregoing provisions of this Section 7.2 shall apply with respect to the director or directors elected by such holders of Preferred Stock. Eighth: Section 8.1. Bylaws. The Board of Directors shall have the power to adopt, amend or repeal Bylaws of the Corporation, except to the extent that Bylaws adopted by the stockholders may otherwise provide. No Bylaws may be adopted, amended or repealed by the stockholders unless such action is approved by the vote of two-thirds of the Voting Power of the outstanding shares of Voting Stock of the Corporation, voting together as a single class. Section 8.2. Amendments to Restated Certificate of Incorporation. Subject to the voting rights given to any particular class or series of Preferred Stock by the Board of Directors pursuant to Article Fourth of this Restated Certificate of Incorporation, and except as may be specifically provided to the contrary in any other provision in this Restated Certificate of Incorporation with respect to amendment or repeal of such provision, the vote of two-thirds of the Voting Power of the outstanding shares of Voting Stock of the Corporation, voting together as a single class, shall be required to amend the provisions of Articles Seventh and Eighth of this Restated Certificate of Incorporation or delete any provision of such Articles. Section 8.3. Stockholder Meetings. Subject to the rights of the holders of any class or series of Preferred Stock to take action separately as a class, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such stockholders and may not be effected without a meeting by any consent in writing by such stockholders. Except as otherwise required by law and subject to the rights of the holders of any class or series of Preferred Stock, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, the President or the Board of Directors. Ninth: To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same now exists or may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Tenth: Section 10.1. Indemnification of Directors and Officers. Except as prohibited by law, every director and officer of the Corporation shall be entitled as a matter of right to be indemnified by the Corporation against all expenses and liability (as those terms are defined below in this Section 10.1) incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Corporation or otherwise, in which such person may be involved, as a party or otherwise, by reason of such person being or having been a director or officer of the Corporation or of a subsidiary of the Corporation or by reason of the fact that such person is or was serving at the request of the Corporation as a director, officer, employee, 4 fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other entity (such claim, action, suit or proceeding hereinafter being referred to as "Action"); provided, however, that no such right to indemnification shall exist with respect to an Action brought by an indemnitee (as defined below) against the Corporation (an "Indemnitee Action") except as provided in the last sentence of this Section 10.1. Persons who are not directors or officers of the Corporation may be similarly indemnified in respect of service to the Corporation or to another such entity at the request of the Corporation to the extent the Board of Directors of the Corporation at any time designates any of such persons as entitled to the benefits of this Article Tenth. As used in this Article Tenth, "indemnitee" shall include each director and officer of the Corporation and each other person designated by the Board of Directors of the Corporation as entitled to the benefits of this Section 10.1; "expenses" means all expenses actually and reasonably incurred, including fees and expenses of counsel selected by an indemnitee, and "liability" means all liability incurred, including the amounts of any judgments, excise taxes, fines or penalties and any amounts paid in settlement. An indemnitee shall be entitled to be indemnified pursuant to this Section 10.1 against expenses incurred in connection with an Indemnitee Action only if (i) the Indemnitee Action is instituted under Section 10.3 of this Article Tenth and the indemnitee is successful in whole or in part in such Indemnitee Action, (ii) the indemnitee is successful in whole or in part in another Indemnitee Action for which expenses are claimed or (iii) the indemnification for expenses is included in the settlement of, or is awarded by a court in, such other Indemnitee Action. Section 10.2. Right to Advancement of Expenses. Every indemnitee shall be entitled as a matter of right to have the expenses of the indemnitee in defending any Action or in bringing and pursuing any Indemnitee Action under Section 10.3 of this Article Tenth paid in advance by the Corporation prior to final disposition of the Action or Indemnitee Action provided that the Corporation receives a written undertaking by or on behalf of the indemnitee to repay the amount advanced if it should ultimately be determined that the indemnitee is not entitled to be indemnified for the expenses. Section 10.3. Right of Indemnitee to Bring Action. If a written claim for indemnification under Section 10.1 of this Article Tenth or for advancement of expenses under Section 10.2 of this Article Tenth is not paid in full by the Corporation within 30 days after the claim has been received by the Corporation, the indemnitee may at any time thereafter bring an Indemnitee Action to recover the unpaid amount of the claim and, if successful in whole or in part, the indemnitee shall also be entitled to be paid the expense of bringing and pursuing such Indemnitee Action. The only defense to an Indemnitee Action to recover on a claim for indemnification under Section 10.1 of this Article Tenth shall be that the conduct of the indemnitee was such that under Delaware law the Corporation is prohibited from indemnifying the indemnitee for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel and stockholders) to have made a determination prior to the commencement of such Indemnitee Action that indemnification of the indemnitee is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the conduct of the indemnitee was such that indemnification is prohibited by Delaware law, shall be a defense to such Indemnitee Action or create a presumption that the conduct of the indemnitee was such that indemnification is prohibited by Delaware law. The only defense to an Indemnitee Action to recover on a claim for advancement of expenses under 5 Section 10.2 of this Article Tenth shall be failure by the indemnitee to provide the undertaking required by Section 10.2 of this Article Tenth. Section 10.4. Funding and Insurance. The Corporation may create a trust fund, grant a security interest, cause a letter of credit to be issued or use other means (whether or not similar to the foregoing) to ensure the payment of all sums required to be paid by the Corporation to effect indemnification as provided in this Article Tenth. The Corporation may purchase and maintain insurance to protect itself and any indemnitee against any expenses or liability incurred by the indemnitee in connection with any Action, whether or not the Corporation would have the power to indemnify the indemnitee against the expenses or liability by law or under the provisions of this Article Tenth. Section 10.5. Non-Exclusivity; Nature and Extent of Rights. The rights to indemnification and advancement of expenses provided for in this Article Tenth shall (i) not be deemed exclusive of any other rights, whether now existing or hereafter created, to which any indemnitee may be entitled under any agreement, provision in the Restated Certificate of Incorporation or Bylaws of the Corporation, vote of stockholders or disinterested directors or otherwise, (ii) be deemed to create contractual rights in favor of each indemnitee who serves the Corporation at any time while this Section 10.5 is in effect (and each such indemnitee shall be deemed to be so serving in reliance on the provisions of this Section 10.5), (iii) continue as to each indemnitee who has ceased to have the status pursuant to which the indemnitee was entitled or was denominated as entitled to indemnification under this Article Tenth and shall inure to the benefit of the heirs and legal representatives of each indemnitee and (iv) be applicable to Actions commenced after this Article Tenth becomes effective, whether arising from acts or omissions occurring before or after this Article Tenth becomes effective. Any amendment or repeal of this Article Tenth or adoption of any Bylaw of the Corporation or other provision of the Restated Certificate of Incorporation of the Corporation which has the effect of limiting in any way the rights to indemnification or advancement of expenses provided for in this Article Tenth shall operate prospectively only and shall not affect any action taken, or any failure to act, by an indemnitee prior to such amendment, repeal, Bylaw or other provision becoming effective. Section 10.6. Partial Indemnity. If an indemnitee is entitled under any provision of this Article Tenth to indemnification by the Corporation for some or a portion of the expenses or liabilities incurred by the indemnitee in the preparation, investigation, defense, appeal or settlement of any Action or Indemnitee Action but not, however, for the total amount thereof, the Corporation shall indemnify the indemnitee for the portion of such expenses or liabilities to which the indemnitee is entitled. ELEVENTH: This Restated Certificate of Incorporation integrates without further amendment hereby and shall be deemed to include the Certificate of Designation, Preferences and Rights of Series B Preferred Stock of The Wiser Oil Company filed with the Secretary of State of Delaware on November 12, 1993. IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be signed this 25th day of May, 2000. 6 THE WISER OIL COMPANY By: /s/ Andrew J. Shoup, Jr. ------------------------------ Name: Andrew J. Shoup, Jr. ------------------------- Title: President ------------------------ 7 EX-3.2 3 0003.txt WISER OIL COMPANY BYLAWS EXHIBIT 3.2 THE WISER OIL COMPANY BYLAWS Amended and Restated May 26, 2000 --------------------------------- ARTICLE I OFFICES Section 1.1. Registered and Principal Offices. The registered -------------------------------- office in Delaware shall be in the City of Wilmington, County of New Castle, State of Delaware and the registered agent in charge thereof shall be The Corporation Trust Company. Section 1.2. Other Offices. The Corporation may also have offices ------------- at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.1. Place of Meetings. All meetings of the stockholders for ----------------- the election of directors shall be held at the principal business office of the Corporation, or at such other place either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Meetings of stockholders for any other purpose may be held at such place, within or without the State of Delaware, as shall be fixed by the Board of Directors or the President and stated in the notice of the meeting. Section 2.2. Annual Meetings. The annual meeting of the holders of --------------- shares of each class or series of stock as are entitled to notice thereof and to vote thereat pursuant to applicable law and the Corporation's Certificate of Incorporation for the purpose of electing directors and transacting such other proper business as may come before it shall be held in each year, at such time, on such day and at such place, within or without the State of Delaware, as may be designated by the Board of Directors. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (B) otherwise properly brought before the meeting by or at the direction of the board of directors, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than one hundred twenty (120) calendar days in advance of the date specified in the corporation's proxy statement released to stockholders in connection with the previous year's annual meeting of stockholders; provided, however, that in the event that no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than thirty (30) days from the date contemplated at the time of the previous year's proxy statement, notice by the stockholder to be timely must be so received not later than the close of business on the later of one hundred twenty (120) calendar days in advance of such annual meeting or ten (10) calendar days following the date on which public announcement of the date of the meeting is first made. A stockholder's notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, (iv) any material interest of the stockholder in such business, and (v) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "1934 Act"), in his capacity as a proponent to a stockholder proposal. Notwithstanding the foregoing, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholder's meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 2.2. The chairman of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section 2.2, and, if he should so determine, he shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted. Section 2.3. Special Meetings. Special meetings of the stockholders, ---------------- for any purpose or purposes, unless otherwise prescribed by statute or by the Restated Certificate of Incorporation as filed with the Secretary of State of Delaware on May 16, 2000 (the "Restated Certificate"), may be called only by the Chairman of the Board, the President or the Board of Directors. Such call shall state the purpose or purposes of the proposed meeting. Special meetings shall be held at a time fixed by the Board of Directors or the President and stated in the notice of the meeting. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 2.4. Notice of Meetings. Written notice of each meeting of ------------------ stockholders stating the place, date and hour of the meeting shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. Section 2.5. Stockholders' List. The Secretary shall prepare and make, ------------------ at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 2.6. Quorum. The holders of a majority of the stock issued and ------ outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by -2- statute, by the Restated Certificate or by the policy of the principal national securities exchange on which the Corporation's stock is listed or admitted to trading. The stockholders present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a majority. If, however, a majority of the outstanding stock shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat who are present in person or represented by proxy shall have power to adjourn the meeting from time to time until a quorum shall be present or represented. Section 2.7. Adjournments. When a meeting is adjourned to another ------------ place, date or time, written notice need not be given of the adjourned meeting if the place, date and time are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, or if a meeting is adjourned to reconvene upon the call of the Chairman, or if a new record date is fixed for the adjourned meeting, written notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At any adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.8. Proxies, Voting and Meeting Procedure. ------------------------------------- (a) At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing (including telegram, cable or radiogram, telex or similar transmission), filed in accordance with the procedure established for the meeting. (b) Each stockholder shall have one vote for every share of stock entitled to vote which is registered in his name on the record date for the meeting, except as otherwise provided herein or required by statute or the Restated Certificate. (c) When a quorum is present at any meeting, the vote of stockholders present, in person or by proxy, entitled to cast at least a majority of the votes which all stockholders present and voting (excluding abstentions) are entitled to cast on the particular matter shall decide any question brought before such meeting, except that (i) if the question is one upon which, by express provision of statute, the Restated Certificate or the policy of the principal national securities exchange on which the Corporation's stock is listed or admitted to trading, a different vote is required, such express provision shall govern, (ii) all elections for directors shall be determined by a plurality of the votes cast, and (iii) in the case of privileged subsidiary or incidental motions or questions involving the convenience of the stockholders present, the Chairman may call for a per capita vote, either by voice or by show of hands. Elections for directors need not be by ballot, unless otherwise ordered by the presiding officer at the meeting or unless a demand is made by a stockholder at the meeting and before the voting begins. The Chairman of any meeting shall determine the order of business and the procedure at the meeting, including such regulation of the conduct of discussion as seems to him in order. The conduct of meetings shall be governed by accepted corporate practice, the fundamental rule being that all who are entitled to take part shall be treated with fairness and good faith. -3- ARTICLE III DIRECTORS Section 3.1. Charter Provisions. The following provisions are in ------------------ Article SEVENTH of the Restated Certificate: SECTION 7.1. Management of Business and Affairs. The business and ---------------------------------- affairs of the Corporation shall be managed by or under the direction of a Board of Directors. SECTION 7.2. Composition of Board. The Board of Directors shall be -------------------- comprised as follows: (a) Number. The whole Board of Directors shall consist of such number ------ of persons, not less than 3 nor more than 14, as may from time to time be determined by the Board pursuant to a resolution adopted by a two-thirds vote of all the directors in office. (b) Classification; Term of Office. Beginning with the Board of ------------------------------ Directors to be elected at the annual meeting of stockholders to be held in 1985, the directors shall be classified, in respect to the time for which they shall severally hold office, by dividing them into three classes, each such class to be as nearly equal in number as possible. At the annual meeting of stockholders to be held in 1985, separate elections shall be held for the directors of each class, the term of office of directors of the first class to expire at the first annual meeting after their election, the term of office of the directors of the second class to expire at the second annual meeting after their election; and the term of office of the directors of the third class to expire at the third annual meeting after their election. At each succeeding annual meeting, the stockholders shall elect directors of the class whose term then expires, to hold office until the third succeeding annual meeting. Each director shall hold office for the term for which elected and until his or her successor is elected and qualified or until his or her earlier resignation or removal. (c) Removal of Directors. Stockholders may remove a director or the -------------------- entire Board of Directors from office at any time only for cause and only by vote of two-thirds of the Voting Power of the outstanding shares of Voting Stock of the Corporation, voting together as a single class. The term "Voting Stock" at any time shall mean the outstanding shares of capital stock of the Corporation entitled to vote at its next annual election of directors (without consideration of the rights of any class of stock other than the Common Stock to elect directors by a separate class vote); and a specified percentage of "Voting Power", with reference to any matter being voted upon by the stockholders, shall mean such number of shares of stock as shall enable the holders thereof to cast such percentage of the total number of votes entitled to be cast by holders of shares entitled to vote thereon. -4- (d) Vacancies. Vacancies in the Board of Directors, including newly --------- created directorships resulting from an increase in the number of directors, shall be filled only by a two-thirds vote of all the directors in office. All directors elected to fill vacancies shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires. No decrease in the number of directors constituting the Board of Directors shall shorten the term of an incumbent director. (e) Preferred Stock Directors. If at any time the holders of any class ------------------------- or series of Preferred Stock shall have the right, voting separately as a class, to elect one or more directors of the Corporation, none of the foregoing provisions of this Section 7.2 shall apply with respect to the director or directors elected by such holders of preferred stock. Section 3.2. Place of Meetings. The Board of Directors of the ----------------- Corporation may hold any meeting, either within or without the State of Delaware. Section 3.3. Annual Organizational Meeting. The organizational meeting ----------------------------- of each newly elected Board of Directors at a time and place fixed by the President and stated in a notice given as hereinafter provided for special meetings of the Board of Directors, or as shall be specified in a written waiver signed by all of the newly elected Directors. Section 3.4. Regular Meetings. Regular meetings of the Board of ---------------- Directors shall be held at such time and place as shall from time to time be determined by the Board. Notice of regular meetings of the Board shall not be required, except as otherwise expressly required herein or by law, and except that whenever the time or place of regular meetings shall be fixed or changed by the Board, notice of such action shall be given promptly to all directors not participating in such action. Section 3.5. Special Meetings. Special meetings of the Board may be ---------------- called by the President or by one-third of the directors then in office. Two day's notice of each special meeting shall be given to each Director, either personally or by mail or by telegram. Special meetings shall be held at such time and place as are fixed by the person calling the meeting, and stated in the notice of meeting. Any action may be taken at a special meeting, regardless of whether specified in the notice of meeting, except as otherwise specifically required herein or by statute. Section 3.6. Quorum; Action; Adjournment. At all meetings of the Board --------------------------- a majority of the full Board shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided herein, by statute or by the Restated Certificate. If a quorum shall not be present at any meeting of the Board of Directors, the Directors present thereat may adjourn the meeting from time to time to another place, date or time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.7. Action by Written Consent. Action may be taken by the ------------------------- Board of Directors or any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. -5- Section 3.8. Participation in Meetings by Conference Telephone. ------------------------------------------------- Members of the Board of Directors or of any committee may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment that enables all persons participating in the meeting to hear each other. Such participation shall constitute presence in person at such meeting. Section 3.9. Compensation. Unless otherwise restricted by the Restated ------------ Certificate, the Board of Directors shall have the authority to fix the compensation of Directors. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and of a committee of the Board, and may in addition be paid a fixed sum for attendance at each such meeting or a stated salary as Director, chairman or member of any committee. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. Section 3.10. Interested Directors. No contract or transaction between -------------------- the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because such person's or persons' votes are counted for such purpose, if: (i) the material facts as to such person's relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to such person's relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. ARTICLE IV COMMITTEES Section 4.1. Committees. The Board of Directors from time ---------- to time may, by resolution passed by a majority of the full Board, designate one or more committees, including an Executive Committee, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee and any alternate member in his place, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another Director to act at the meeting in the place of any such absent or disqualified member. Except as otherwise provided in the resolution of the Board of Directors designating the Executive Committee, the Executive Committee shall have and -6- may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; any other such committee shall have such powers and authority as shall be provided by resolution of the Board of Directors; but no committee shall have or exercise any power or authority in reference to amending the Restated Certificate (except that a committee which is given the authority to adopt resolutions providing for the issue of a class or series of stock may also be given the authority to fix and determine the powers, rights and qualifications, limitations or restrictions thereof, pursuant to Sections 141(c) and 151(a) of the General Corporation Law), adopting an agreement of merger or consolidation under Section 251 or 252 of the General Corporation Law, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending the Bylaws of the Corporation; and, unless the resolution or the Restated Certificate expressly so provides, no committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law. Committees shall have such names as may be determined from time to time by resolution adopted by the Board of Directors. Each Committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. Section 4.2. Conduct of Business. Each committee may determine its own ------------------- procedural rules for meeting and conducting business and shall act in accordance therewith, except as otherwise provided herein or required by law. Except as otherwise provided in the resolution of the Board of Directors designating a committee, adequate provision shall be made for notice to members of all meetings; one-third of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. ARTICLE V NOTICES Section 5.1. Manner of Giving Notice. Whenever, under the provisions ----------------------- of a statute or of the Restated Certificate or of these Bylaws, notice is required to be given to any Director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such Director or stockholder, at his address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to Directors may also be given by telecopy or by telephone or in person. Section 5.2. Waiver of Notice. Whenever any notice is required to be ---------------- given under the provisions of a statute or of the Restated Certificate or of these Bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Neither the business nor the purpose of any meeting need be specified in such a waiver. -7- ARTICLE VI OFFICERS Section 6.1. Executive Officers. The Executive Officers of the Company ------------------ shall be chosen by the Board of Directors and shall be a Chief Executive Officer, a President, one or more Vice-Presidents as the Board may determine, a Secretary and a Treasurer. Any number of offices may be held by the same person, unless the Restated Certificate otherwise provides. Section 6.2. Election at Annual Meeting. The Board of Directors at its -------------------------- first meeting after each annual meeting of stockholders shall elect the Executive Officers, who shall serve during the ensuing year. Section 6.3. Appointment of Additional Officers and Agents. The Board --------------------------------------------- of Directors or the Chief Executive Officer may appoint such other and assistant officers and agents as it or he shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board or the President. Section 6.4. Salaries. The salaries of all Executive Officers of the -------- Corporation shall be fixed by the Board of Directors, and the salaries of other officers and agents shall be fixed by the Chief Executive Officer. Section 6.5. Term of Office; Removal; Filling of Vacancies. The --------------------------------------------- officers of the Corporation shall hold office until their successors are chosen and qualify, or until their earlier death, resignation or removal. Any officer or agent elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board of Directors, and any officer or agent appointed by the Chief Executive Officer may be removed at any time, with or without cause, by the Chief Executive Officer. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors or by the Chief Executive Officer if he is authorized herein to elect or appoint such office. Section 6.6. Chairman of the Board. The Chairman of the Board, shall, --------------------- if present, preside at all meetings of the stockholders and of the Board of Directors. If so designated by the Board of Directors, the Chairman of the Board shall be the chief executive officer of the Corporation. The Chairman of the Board may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed and executed; and in general shall perform all duties incident to the office of Chairman of the Board and such other duties as may be prescribed by the Board of Directors from time to time. Section 6.7. Chief Executive Officer. The Chief Executive Officer, if ----------------------- one exists, subject to the control of the Board of Directors and the Chairman of the Board, in general shall supervise and control all of the business and affairs of the Corporation. In the absence of the Chairman of the Board, or if there is none, the Chief Executive Officer shall preside at all meetings -8- of the stockholders and (if the Chief Executive Officer is a director) of the Board of Directors. If so designated by the Board of Directors, the Chief Executive Officer shall be the chief executive officer of the Corporation. The Chief Executive Officer may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates for shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed and executed; and in general shall perform all duties incident to the office of Chief Executive Officer and such other duties as may be prescribed by the Board of Directors from time to time. Section 6.8. President. The President, subject to the control of the --------- Board of Directors, the Chairman of the Board and the Chief Executive Officer, in general shall supervise and control all of the business and affairs of the Corporation. In the absence of the Chairman of the Board or Chief Executive Officer, or if there is neither, the President shall preside at all meetings of the stockholders and (if the President is a director) of the Board of Directors. If so designated by the Board of Directors, and if one does not exist, the President shall be the Chief Executive Officer of the Corporation. The President may sign, with the Secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates of shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors, the Chairman of the Board (if one exists) or by these Bylaws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed and executed; and in general shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer from time to time. Section 6.9. Chief Financial Officer. The Chief Financial Officer ----------------------- shall, subject to the control of the Board of Directors, the Chief Executive Officer, the President and the Chairman of the Board, in general assist the chief executive officer, and shall perform all duties relating to the general management and operation (with specific attention to financial matters) of the Corporation incident to the office of Chief Financial Officer and such other duties as may be prescribed the Board of Directors from time to time. Section 6.10. Vice-Presidents. In the absence of the President or in --------------- the event of his inability or refusal to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Vice-Presidents shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 6.11. Secretary and Assistant Secretaries. The Secretary shall ----------------------------------- attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings of the meetings of the stockholders and of the Board of Directors in a book to be kept for that purposes, and shall perform like duties for the standing committees when required. He shall give or cause to be given, notice of all meetings of the stockholders and special meetings of the -9- Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. He shall have custody of the corporate seal of the Corporation and he, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer or temporarily to any person to affix the seal of the Corporation and to attest the affixing by his signature. An Assistant Secretary, or if there be more than one, the Assistant Secretary in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 6.12. Treasurer and Assistant Treasurers. The Treasurer shall ---------------------------------- have the custody of the corporate funds and securities, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his transactions as Treasurer and of the financial condition of the Corporation. The Treasurer by virtue of his office shall be an Assistant Secretary. An Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of his inability or refusal to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 6.13. Action with Respect to Securities of Other Corporations. ------------------------------------------------------- Unless otherwise directed by the Board of Directors, the President or any Vice- President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporations. Section 6.14. Delegation of Duties. In case of the absence of any -------------------- officer of the Corporation, or for any other reason that the Board may deem sufficient, the Board of Directors may delegate for the time being the powers and duties, or any of them, of such officer to any other officer or director or other person whom it may select. ARTICLE VII CERTIFICATES OF STOCK Section 7.1. Signatures. Every holder of fully-paid stock in the ---------- Corporation shall be entitled to have a certificate signed (in facsimile or otherwise, as permitted by law) by, or in the -10- name of the Corporation by, the President or a Vice-President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. The Board may authorize the issuance of certificates for fractional shares or, in lieu thereof, scrip or other evidence of ownership, which may (or may not) as determined by the Board entitle the holder thereof to voting, dividend or other rights of stockholders. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a stock certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or it were such officer, transfer agent or registrar at the date of issue. Section 7.2. Lost Certificates. The Board of Directors may direct a ----------------- new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed. Section 7.3. Transfers of Stock. Upon surrender to the Corporation or ------------------ the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 7.4. Record Date. In order that the Corporation may determine ----------- the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall be not more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 7.5. Registered Stockholders. The Corporation shall be ----------------------- entitled to recognize the exclusive right of a person registered on its books as the owner of shares for all purposes, including the right to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law. -11- ARTICLE VIII GENERAL PROVISIONS Section 8.1. Checks; Notes. All checks or demands for money and notes ------------- of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Facsimile signatures may be sued if authorized by the Board. Section 8.2. Fiscal Year. The fiscal year of the Corporation shall be ----------- the calendar year, unless the Board of Directors shall determine otherwise. Section 8.3. Seal. The corporate seal shall have inscribed thereon the ---- name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX INDEMNIFICATION Section 9.1. Indemnification of Directors and Officers. Except as ----------------------------------------- prohibited by law, every director and officer of the Corporation shall be entitled as a matter of right to be indemnified by the Corporation against all expenses and liability (as those terms are defined below in this Section 9.1) incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the Corporation or otherwise, in which such person may be involved, as a party or otherwise, by reason of such person being or having been a director or officer of the Corporation or of a subsidiary of the Corporation or by reason of the fact that such person is or was serving at the request of the Corporation as a director, officer, employee, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other entity (such claim, action, suit or proceeding hereinafter being referred to as "Action"); provided, however, that no such right to indemnification shall exist with respect to an Action brought by an indemnitee (as defined below) against the Corporation (an "Indemnitee Action") except as provided in the last sentence of this Section 9.1. Persons who are not directors or officers of the Corporation may be similarly indemnified in respect of service to the Corporation or to another such entity at the request of the Corporation to the extent the Board of Directors of the Corporation at any time designates any of such persons as entitled to the benefits of this Article Ninth. As used in this Article Ninth, "indemnitee" shall include each director and officer of the Corporation and each other person designated by the Board of Directors of the Corporation as entitled to the benefits of this Section 9.1; "expenses" means all expenses actually and reasonably incurred, including fees and expenses of counsel selected by an indemnitee, and "liability" means all liability incurred, including the amounts of any judgments, excise taxes, fines or penalties and any amounts paid in settlement. An indemnitee shall be entitled to be indemnified pursuant to this Section 9.1 against expenses incurred in connection with an Indemnitee Action only if (i) the Indemnitee Action is instituted under Section 9.3 of this Article Ninth and the indemnitee is successful in whole or in part in such Indemnitee Action, (ii) the indemnitee is successful in whole or in part in another Indemnitee Action for which -12- expenses are claimed or (iii) the indemnification for expenses is included in the settlement of, or is awarded by a court in, such other Indemnitee Action. Section 9.2. Right to Advancement of Expenses. Every indemnitee shall -------------------------------- be entitled as a matter of right to have the expenses of the indemnitee in defending any Action or in bringing and pursuing any Indemnitee Action under Section 9.3 of this Article Ninth paid in advance by the Corporation prior to final disposition of the Action or Indemnitee Action provided that the Corporation receives a written undertaking by or on behalf of the indemnitee to repay the amount advanced if it should ultimately be determined that the indemnitee is not entitled to be indemnified for the expenses. Section 9.3. Right of Indemnitee to Bring Action. If a written claim ----------------------------------- for indemnification under Section 9.1 of this Article Ninth or for advancement of expenses under Section 9.2 of this Article Ninth is not paid in full by the Corporation within 30 days after the claim has been received by the Corporation, the indemnitee may at any time thereafter bring an Indemnitee Action to recover the unpaid amount of the claim and, if successful in whole or in part, the indemnitee shall also be entitled to be paid the expense of bringing and pursuing such Indemnitee Action. The only defense to an Indemnitee Action to recover on a claim for indemnification under Section 9.1 of this Article Ninth shall be that the conduct of the indemnitee was such that under Delaware law the Corporation is prohibited from indemnifying the indemnitee for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel and stockholders) to have made a determination prior to the commencement of such Indemnitee Action that indemnification of the indemnitee is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or stockholders) that the conduct of the indemnitee was such that indemnification is prohibited by Delaware law, shall be a defense to such Indemnitee Action or create a presumption that the conduct of the indemnitee was such that indemnification is prohibited by Delaware law. The only defense to an Indemnitee Action to recover on a claim for advancement of expenses under Section 9.2 of this Article Ninth shall be failure by the indemnitee to provide the undertaking required by Section 9.2 of this Article Ninth. Section 9.4. Funding and Insurance. The Corporation may create a trust --------------------- fund, grant a security interest, cause a letter of credit to be issued or use other means (whether or not similar to the foregoing) to ensure the payment of all sums required to be paid by the Corporation to effect indemnification as provided in this Article Ninth. The Corporation may purchase and maintain insurance to protect itself and any indemnitee against any expenses or liability incurred by the indemnitee in connection with any Action, whether or not the Corporation would have the power to indemnify the indemnitee against the expenses or liability by law or under the provisions of this Article Ninth. Section 9.5. Non-Exclusivity; Nature and Extent of Rights. The rights -------------------------------------------- to indemnification and advancement of expenses provided for in this Article Ninth shall (i) not be deemed exclusive of any other rights, whether now existing or hereafter created, to which any indemnitee may be entitled under any agreement, provision in the Restated Certificate or Bylaws of the Corporation, vote of stockholders or disinterested directors or otherwise, (ii) be deemed to create contractual rights in favor of each indemnitee who serves the Corporation at any time while this Section 9.5 is in effect (and each such indemnitee shall be deemed to be so serving in reliance on the -13- provisions of this Section 9.5), (iii) continue as to each indemnitee who has ceased to have the status pursuant to which the indemnitee was entitled or was denominated as entitled to indemnification under this Article Ninth and shall inure to the benefit of the heirs and legal representatives of each indemnitee and (iv) be applicable to Actions commenced after this Article Ninth becomes effective, whether arising from acts or omissions occurring before or after this Article Ninth becomes effective. Any amendment or repeal of this Article Ninth or adoption of any Bylaw of the Corporation or other provision of the Restated Certificate which has the effect of limiting in any way the rights to indemnification or advancement of expenses provided for in this Article Ninth shall operate prospectively only and shall not affect any action taken, or any failure to act, by an indemnitee prior to such amendment, repeal, Bylaw or other provision becoming effective. Section 9.6. Partial Indemnity. If an indemnitee is entitled under any ----------------- provision of this Article Ninth to indemnification by the Corporation for some or a portion of the expenses or liabilities incurred by the indemnitee in the preparation, investigation, defense, appeal or settlement of any Action or Indemnitee Action but not, however, for the total amount thereof, the Corporation shall indemnify the indemnitee for the portion of such expenses or liabilities to which the indemnitee is entitled. ARTICLE X AMENDMENTS Section 10.1. These Bylaws may be altered, amended or repealed or new Bylaws be adopted by the stockholders or by the Board of Directors (so long as such power is conferred upon the Board of Directors by the Restated Certificate), at any annual meeting of the stockholders or regular meeting of the Board of Directors, or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. No Bylaws may be adopted, amended or repealed by the Stockholders unless such action is approved by the vote of two-thirds of the Voting Power of the outstanding shares of Voting Stock of the Corporation, voting together as a class. ARTICLE XI GOVERNANCE PROVISIONS During the Effective Period (as defined), the following Bylaws shall be in effect and govern those affairs of the Corporation to which they relate notwithstanding anything in these Bylaws to the contrary. 11.1 Definitions Applicable to Article XI. As used in this Article XI, ------------------------------------ the following terms have the meanings ascribed to them in this Section 11.1: (a) "Affiliate" means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common -14- control with such Person. For purposes of this definition and this Agreement, the term "control" (and correlative terms) means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person. (b) "Annual Budget" means the strategic plan and budget, including operating and capital budgets, of the Corporation then in effect. (c) "Associate" means (i) any corporation or entity (other than the Corporation or a Subsidiary of the Corporation) of which such Person is an officer or partner or is, directly or indirectly, the Beneficial Owner of 10 percent or more of any class of equity securities, (ii) any trust or other estate in which such Person has a substantial beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of such Person, or any relative of such Person, or any relative of such spouse, who has the same home as such Person or who is a director or officer of the Corporation or any of its Subsidiaries. (d) "Beneficial Owner" and "Beneficially Own" mean, with respect to any Person, any securities: (i) which such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly; or (ii) which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, rights (other than Wiser Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding (whether or not in writing); provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from an immediately revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or an equivalent form); or (iii) which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such -15- Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting (except to the extent permitted by subparagraph (ii)(B) of this definition) or disposing of any voting securities of the same issuer. (e) "Board" means the Board of Directors of the Corporation. (f) "Certificate of Designation" means the Certificate of Designation for the Series C Preferred Stock. (g) "Closing" means the closing of the transactions contemplated by the Stock Purchase Agreement. (h) "Closing Date" means the date on which the Closing takes place. (i) "Common Stock" means the Corporation's Common Stock, $0.01 par value per share, and, except where the context otherwise requires, the accompanying Wiser Rights. (j) "Common Stock Equivalents" means (without duplication with any other Common Stock or Common Stock Equivalents) any rights (other than Wiser Rights), warrants, options, convertible securities or indebtedness, exchangeable securities or indebtedness, or other rights, exercisable for or convertible or exchangeable into, directly or indirectly, Common Stock of the Corporation and securities convertible or exchangeable into Common Stock (at the time of issuance or upon the passage of time or the occurrence of some future event); including the Underlying Common Shares. (k) "Conversion Shares" means all shares of the Common Stock issuable upon conversion of the Preferred Shares in accordance with the terms of the Certificate of Designation. (l) "Dividend Shares" means the shares of Common Stock issuable in payment of dividends payable on the Preferred Shares in accordance with the terms of the Certificate of Designation. (m) "Effective Period" means the period commencing on the date hereof and ending upon the earlier to occur of (i) such time as Purchaser elects in writing to terminate its rights under this Article XI, or (iii) such time as the Purchaser Group Beneficially Owns less than 800,000 Fully- Diluted Shares, which number of Fully-Diluted Shares may be adjusted in accordance with Section 11.6(v) of these Bylaws. (n) "Equity Securities" means any capital stock of the Corporation, any securities directly or indirectly convertible into, or exercisable or exchangeable for, any capital stock of the Corporation, or any right (other than Wiser Rights), option, warrant or other security which, with the payment of additional consideration, the expiration of time or the occurrence of any event shall give the holder thereof the right to acquire any capital stock -16- of the Corporation or any security convertible into or exercisable or exchangeable for, any capital stock of the Corporation. (o) "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder. (p) "Executive Committee" shall have the meaning set forth in Section 11.3 hereof. (q) "Fully-Diluted Shares" means, at any time, the then outstanding shares of Common Stock plus (without duplication) all shares of Common Stock issuable (at the time of issuance or upon passage of time or the occurrence of some future event), upon the exercise, conversion or exchange of all then-outstanding Common Stock Equivalents. The percentage of the Fully-Diluted Shares held by a Person at any time shall be determined so that a Person is deemed the Beneficial Owner of the then outstanding shares of Common Stock attributable to such Person plus (without duplication) all shares of Common Stock issuable (whether at the time of issuance or upon passage of time or the occurrence of some future event), upon the exercise, conversion or exchange of all then-outstanding Common Stock Equivalents attributable to such Person, which shares of Common Stock (but not Common Stock issuable under any other outstanding Common Stock Equivalents) shall be deemed to be outstanding for purposes of this determination. (r) "Management Agreement" means the Management Agreement to be entered into by and between the Corporation and WIC at the Closing. (s) "Option Closing" shall have the meaning set forth in the Stock Purchase Agreement. (t) "Person" means an individual or a corporation, partnership, trust, incorporated or unincorporated association, limited liability company, joint venture, joint-stock company, government or other agency or political subdivision thereof or other entity of any kind. (u) "Preferred Shares" means the shares of Series C Preferred Stock to be purchased by Purchaser at the Closing and any Option Closings pursuant to the Stock Purchase Agreement. (v) "Purchaser" means WIC and Dimeling, Shreiber and Park. (w) "Purchaser Designee" means a nominee designated by Purchaser. (x) "Purchaser Group" means each Purchaser together with its respective Affiliates. (y) "SEC" means the Securities and Exchange Commission. -17- (z) "Series C Preferred Stock" means the Corporation's Series C Cumulative Convertible Preferred Stock, par value $10.00 per share, which shall have the terms set forth in the Certificate of Designation. (aa) "Stock Purchase Agreement" means that certain Amended and Restated Stock Purchase Agreement dated as of December 13, 1999 between WIC and the Corporation, as the same may be amended, supplemental or modified from time to time in accordance with the terms hereof. (bb) "Subsidiary" of any Person means (i) a corporation, a majority of whose stock with voting power, under ordinary circumstances, to elect directors is at the date of determination thereof, directly or indirectly, owned by such Person, by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such Person, and (ii) any other Person (other than a corporation) in which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has (x) at least a majority ownership interest or (y) the power to elect or direct the election of the directors or other governing body of such Person. (cc) "Underlying Common Shares" means the Warrant Shares, the Conversion Shares and the Dividend Shares. (dd) "Warrant Agreement" means each Warrant Agreement to be entered into by and between the Corporation and WIC at the Closing and any Option Closings. (ee) "Warrants" means the Common Stock purchase warrants issued under the Warrant Agreement. (ff) "Warrant Shares" means all shares of Common Stock issuable upon exercise of the Warrants in accordance with the terms of the Warrant Agreement. (gg) "WIC" means Wiser Investment Company, LLC, a Delaware limited liability company. (hh) "Wiser Rights" means rights to purchase Series B Preferred Stock of the Corporation pursuant to the Wiser Rights Agreement. (ii) "Wiser Rights Agreement" means the Rights Agreement dated as of October 25, 1993 by and between the Corporation and ChaseMellon Shareholder Services, L.L.C., as successor rights agent, as amended. 11.2 Composition of the Effective Period Board; Nomination. During the ----------------------------------------------------- Effective Period, the number of directors comprising the full Board of Directors of the Corporation will be seven (7). Subject to Section 11.6 hereof, during the Effective Period Purchaser shall have the continuing right to designate the Purchaser Designees and the Chairman of the Board. Each Purchaser Designee shall serve until the annual meeting of the Corporation's stockholders at which the term of the class to which such Purchaser Designee has been appointed expires, and until his or -18- her respective successor is elected and qualified or until his or her earlier death, resignation or removal from office. Unless Purchaser advises the Board in writing of one or more replacement Purchaser Designees for the Corporation's next annual or special meeting of stockholders at which directors are elected and the term of one or more Purchaser Designee expires, then the Purchaser Designee(s) for any such meeting shall be deemed to be the incumbent Purchaser Designee(s). During the term of the Management Agreement, designations under this Section 11.2 shall be made by WIC on behalf of Purchaser. 11.3 Executive Committee. The Board hereby creates an executive ------------------- committee for the Corporation (the "Executive Committee"). The Executive Committee shall consist of four (4) members of the Board of Directors of the Corporation. Subject to Section 11.6 hereof, Purchaser shall have the right to designate three Purchaser Designees to serve on the Executive Committee. The President of the Corporation shall serve as an advisory member of the Executive Committee. The Executive Committee shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation on matters which by law do not need whole Board approval. The affirmative vote of a majority of the members of the Executive Committee must approve a particular matter for it to be the act of the Executive Committee. If the affirmative vote of a majority of the members of the Executive Committee on a particular matter submitted to the Executive Committee for approval cannot be obtained, such matter shall be submitted to the whole Board for approval. Executive Committee approval shall be required to approve operating or capital expenditures exceeding $1,000,000 per transaction, unless such expenditures were specifically approved by the Board as part of the Annual Budget. Whole Board approval shall be required to approve (i) any operating or capital expenditure or series of related expenditures exceeding $2,500,000, unless such expenditure or expenditures were specifically approved by the Board as a part of the Annual Budget, (ii) the nomination of members for election to the Board, (iii) the filling of vacancies in the Board, the Executive Committee or other Board committee, and (iv) transactions between the Corporation, on the one hand, and any Purchaser or any Affiliate of any Purchaser, on the other hand. Written or printed notice stating the place, day and hour of any meeting of the Executive Committee and the purpose or purposes for which the meeting is called shall be delivered to each member of the Executive Committee so that it is received by such member not less than three days before the date of the meeting. Any action required or permitted to be taken at a meeting of the Executive Committee may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the members of the Executive Committee. 11.4 Other Committees. Subject to Section 11.6 hereof, Purchaser shall ---------------- have the right to designate one Purchaser Designee to serve as a member of each committee of the Board, other than the Executive Committee. 11.5 Certain Officers. Subject to Section 11.6 hereof, Purchaser shall ---------------- have the right to make all nominations of individuals for election to the offices of Chief Executive Officer and Chief Financial Officer of the Corporation. During the term of the Management Agreement, nominations under this Section 11.5 shall be made by WIC on behalf of Purchaser. 11.6 Continuation of Rights. (i) As long as the Purchaser Group ---------------------- Beneficially Owns 4,600,000 or more Fully-Diluted Shares (excluding shares owned by the Purchaser Group prior to the Closing Date), Purchaser shall be entitled to designate in accordance with the provisions hereof -19- three Purchaser Designees to serve on the Board and the Executive Committee and one Purchaser Designee who is not an executive officer of the Corporation to each other committee of the Board. Otherwise, Purchaser shall be entitled to designate that number of Purchaser Designees to the Board and the Executive Committee corresponding to the Purchaser Group's Beneficial Ownership (excluding shares owned by the Purchaser Group prior to the Closing Date) of Common Stock as set forth below: Number of Fully-Diluted Shares Number of Purchaser Designees ------------------------------ ----------------------------- From 2,800,000 to 4,600,000 Two From 800,000 to 2,800,000 One Less than 800,000 Zero (ii) At such time as the Purchaser Group Beneficially Owns fewer than 2,800,000 of the Fully-Diluted Shares, Purchaser shall no longer be entitled to (A) designate the Chairman of the Board, (B) designate a Purchaser Designee to serve on other committees of the Board in accordance with Section 11.4 above or (C) nominate the Chief Executive Officer and the Chief Financial Officer in accordance with Section 11.5 above. (iii) As long as Purchaser is entitled to designate Purchaser Designees in accordance with this Article XI, the Corporation agrees to continue to cause such Purchaser Designee(s) (or their respective successor(s) designated by Purchaser) to be nominated for election to the Board at each annual or special meeting of stockholders at which directors are elected after the Closing when the term of office of any Purchaser Designee expires. To the extent the Corporation's proxy statement for any meeting of stockholders includes a recommendation regarding the election of any other nominees to the Board, the Corporation agrees to include a recommendation that the stockholders also vote in favor of the Purchaser Designee(s) that are nominated for election to the Board in accordance with this Article XI. (iv) (A) Unless clause (B) of this Section 11.6(iv) is applicable, at any time that the number of Purchaser Designees that Purchaser may designate decreases by operation of Section 11.6(i) hereof (a "Designee Reduction"), a Purchaser Designee (or Purchaser Designees, as the case may be) selected by Purchaser shall cease to be a Purchaser Designee, though such individual shall continue to serve on the Board until his successor is duly elected and qualified. (B) If at the time of a Designee Reduction the Restated Certificate provides for a classified Board, (1) a Purchaser Designee (or Purchaser Designees, as the case may be) whose term of office expires at the next annual meeting of stockholders at which directors are elected (each an "Expiring Designee") shall cease to be a Purchaser Designee, though any such individual shall continue to serve on the Board until his successor is duly elected and qualified, provided that if the number of Expiring Designees exceeds the amount of the Designee Reduction, Purchaser shall select the Expiring Designee(s) that shall cease to be a Purchaser Designee(s) and (2) if the number of Expiring Designees is less than the amount of the Designee Reduction, Purchaser shall select an additional Purchaser Designee (or Purchaser Designees, as the -20- case may be) who shall promptly resign from the Board, the Executive Committee and any other Board committee of which he is a member, provided that upon the affirmative vote of a majority of the remaining members of the Board, any such individual shall continue to serve on the Board until his successor is duly elected and qualified. The provisions of this clause (B) shall automatically terminate at such time as the Restated Certificate no longer provides for a classified Board. (v) Notwithstanding anything in this Section 11.6 to the contrary, if at the time of the Closing or any Option Closings the Purchaser Group Beneficially Owns less than 6,624,069 Fully-Diluted Shares (excluding shares owned by the Purchaser Group prior to the Closing Date), then for purposes of this Section 11.6 the number of Fully-Diluted Shares that must be Beneficially Owned by the Purchaser Group in order for it to maintain a specified designation or related right shall be adjusted by multiplying such number of Fully-Diluted Shares by a fraction of which the numerator is the aggregate purchase price paid by Purchaser at the Closing and any Option Closings, and the denominator is $25,000,000. Any calculation made under this Section 11.6(v) shall be rounded to the nearest whole Fully-Diluted Share. (vi) In addition to any adjustment that is required under Section 11.6(v), for purposes of this Section 11.6, the number of Fully-Diluted Shares that must be Beneficially Owned by the Purchaser Group in order for it to maintain a specified designation or related right shall be appropriately adjusted from time to time in case the Corporation shall (A) pay a dividend on Common Stock in Common Stock, (B) subdivide its outstanding shares of Common Stock into a greater number of such shares or (C) combine its outstanding shares of Common Stock into a smaller number of such shares. 11.7 Vacancies. If, following an election or appointment to the Board --------- or committee thereof pursuant to this Article XI, any Purchaser Designee shall resign or be removed or be unable to serve for any reason (other than as a result of a Designee Reduction) prior to the expiration of his term as a director of the Corporation or member of the Executive Committee and any other applicable committee, then WIC on behalf of Purchaser shall, within 30 days of such event, notify the Board in writing of a replacement Purchaser Designee, and the Corporation shall cause such replacement Purchaser Designee to be appointed to the Board and the Executive Committee and any other applicable committee to fill the unexpired term of the Purchaser Designee who such new Purchaser Designee is replacing. 11.8 Costs and Expenses. The Purchaser Designees shall be entitled to ------------------ receive the same compensation and reimbursement of expenses, and to participate in the same benefit and incentive plans, as the Corporation provides to non- employee members of its Board of Directors generally. In addition, the Corporation will pay all reasonable out-of-pocket expenses incurred by Purchaser Designees in connection with their participation in meetings of the Board of Directors (and committees thereof) of the Corporation and the Boards of Directors (and committees thereof) of the Subsidiaries of the Corporation. 11.9 Series C Preferred Directors. Notwithstanding anything herein to ---------------------------- the contrary, the Corporation and the Board shall approve of and shall take all actions as may be necessary to elect the directors that the holders of the Series C Preferred Stock are entitled to elect upon an Event of -21- Noncompliance (each as defined in the Certificate of Designations) pursuant to Section 10B of the Certificate of Designations. 11.10 Amendments to Article XI. During the Effective Period, the ------------------------ provisions of Article XI of the Bylaws may not be amended or repealed without the approval of a majority of the Purchaser Designees, or if only one Purchaser Designee remains, approval by such remaining Purchaser Designee. -22- EX-3.3 4 0004.txt CERTIFICATE OF DESIGNATION OF SERIES B STOCK EXHIBIT 3.3 CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES B PREFERRED STOCK of THE WISER OIL COMPANY Pursuant to Section 151 of the General Corporation Law of the State of Delaware I, Andrew J. Shoup, Jr., President, of The Wiser Oil Company, a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY: That pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the said Corporation, the said Board of Directors on October 25, 1993, adopted the following resolutions creating a series of 20,000 shares of Preferred Stock designated as Series B Preferred Stock; RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, as amended, a separate series of Preferred Stock of the Corporation be, and hereby is created, and that the designations and amounts thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares or Units (as defined below) of such series, and the qualifications, limitations or restrictions thereof are as follows: Section 1. Designation and Amount. The shares of such series shall be ---------------------- designated as Series B Preferred Stock and the number of shares constituting such series shall be 20,000. Section 2. Dividends and Distributions. --------------------------- (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series B Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the 10/th/ day of March, June, September and December in each year commencing December 10, 1993 (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $.01 or (b) subject to the provisions for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, since the immediately preceding Quarterly Dividend Payment Date or with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Preferred Stock. In the event the Corporation shall at any time after October 25, 1993 (the "Rights Declaration Date") (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per share on the Series B Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of shares of Series B Preferred Stock ------------- shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each share of Series B Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number 2 of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of shares of Series B Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. Except as otherwise provided herein or by law, the holders of the shares of Series B Preferred Stock shall not be entitled to vote as a separate class on any matters submitted to a vote of the stockholders. (C) (i) If at any time dividends on any Series B Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series B Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each default period, all holders of Series B Preferred Stock, voting as a class, shall have the right to elect two Directors. (ii) During any default period, such voting right of the holders of Series B Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of one-third in number of shares of Series B Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Series B Preferred Stock of such voting right. At any meeting at which the holders of Series B Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Series B Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Series B Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Series B Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Preferred Stock. - ---- ----- (iii) Unless the holders of Series B Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Series B Preferred Stock outstanding may request the calling of a special meeting of the holders of Series B Preferred Stock, which meeting shall thereupon be called by the President, a Vice President or the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Series B Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Series B Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. 3 Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Series B Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C) (iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders. (iv) In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of Directors until the holders of the Series B Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of the Series B Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3 be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of the Series B Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Series B Preferred Stock as a class shall terminate and (z) the number of Directors shall be such number as may be provided for in the certificate of incorporation or bylaws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the certificate of incorporation or bylaws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled as provided in article Eighth of the Company's Certificate of Incorporation. (D) Except as set forth herein, holders of Series B Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. -------------------- (A) Whenever quarterly dividends or other dividends or distributions payable on the Series B Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions whether or not declared, on shares of Series B Preferred Stock outstanding shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock; 4 (ii) declare of pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled. (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, provided that the Corporation, may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Preferred Stock; (iv) purchase or otherwise acquire for consideration any shares of Series B Preferred Stock, or any shares of stock ranking on a parity with the Series B Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any shares of Series B Preferred Stock ----------------- purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. -------------------------------------- (A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received $250 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series B Liquidation Preference"). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Preferred Stock unless, prior thereof, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 1,000 (as 5 appropriately adjusted as set forth in subparagraph C below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii) immediately above being referred to as the "Adjustment Number"). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B Preferred Stock and Common Stock, respectively, holders of Series B Preferred Stock and holder of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one (1) with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. (B) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series B Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock. (C) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter --------------------------- into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities cash or any other property then in any such case the shares of Series B Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. Redemption. The outstanding shares of Series B Preferred Stock ---------- may be redeemed at the option of the Board of Directors as a whole, but not in part, at any time, or from time 6 to time, at a cash price per share equal to 105 percent of (i) the product of the Adjustment Number times the Average Market Value (as such term is hereinafter defined) of the Common Stock, plus (ii) all dividends which on the redemption date have accrued on the shares to be redeemed and have not been paid, or declared as a sum sufficient for the payment thereof set apart, without interest. The "Average Market Value" is the average of the closing sale prices of the Common Stock during the 30 day period immediately preceding the date before the redemption date on the Composite Tape for New York Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended, on which such stock is listed, or, if such stock is not listed on any such exchange, the average of the closing sale prices with respect to a share of Common Stock during such 30-day period, as quoted on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value of the Common Stock as determined by the Board of Directors in good faith. Section 9. Ranking. The Series B Preferred Stock shall rank junior to all ------- other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. Section 10. Amendment. The Certificate of Incorporation of the Corporation --------- shall not be further amended in any manner which would materially alter or change the powers, preferences or special rights of the Series B Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series B Preferred Stock, voting separately as a class. Section 11. Fractional Shares. Series B Preferred Stock may be issued in ----------------- fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Preferred Stock. 7 IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do affirm the foregoing as true as of the 25th day of May, 2000. /s/ Andrew J. Shoup, Jr. ----------------------------------- Andrew J. Shoup, Jr., President 8 EX-3.4 5 0005.txt CERTIFICATE OF DESIGNATIONS OF SERIES C STOCK EXHIBIT 3.4 CERTIFICATE OF DESIGNATIONS OF SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK OF THE WISER OIL COMPANY Pursuant to Section 151 of the Delaware General Corporation Law The Wiser Oil Company, a Delaware corporation (the "Corporation"), does hereby certify in accordance with Section 103 of the Delaware General Corporation Law (the "DGCL") that the following resolution was duly adopted by action of the Board of Directors of the Corporation (the "Board"): RESOLVED, that pursuant to the authority expressly granted to and vested in the Board by the provisions of Article Fourth of the Restated Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), and pursuant to Section 151 of the DGCL, the Board hereby creates a series of preferred stock of the Corporation and hereby states that the voting powers, designations, preferences and relative, participating, optional or other special rights of which, and qualifications, limitations or restrictions thereof (in addition to the provisions set forth in the Certificate of Incorporation which are applicable to the preferred stock of all classes and series), shall be as follows: Section 1. Number of Shares and Designation. -------------------------------- This series of preferred stock shall be designated as the Series C Cumulative Convertible Preferred Stock (the "Series C Preferred"), and the number of shares that shall constitute such series shall be 1,000,000 shares, par value $10.00 per share (the "Shares"), which number may be decreased (but not below the number thereof then outstanding) from time to time by the Board. Section 2. Dividends. --------- 2A. General Obligation. When, as and if declared by the Board and to the ------------------ extent permitted under the DGCL, the Corporation shall pay preferential dividends in cash or Common Stock (as defined in Section 11 hereof) to the holders of the Series C Preferred as provided in this Section 2. Dividends on each Share of the Series C Preferred shall accrue on a daily basis at the rate of seven percent (7%) per annum of the Liquidation Value (as defined in Section 11 hereof) of such Share from and including the date of issuance of such Share to and including the first to occur of (i) the date on which the Liquidation Value of such Share (plus all accrued and unpaid dividends thereon) is due and payable to the holder thereof in connection with the Liquidation (as defined in Section 3 hereof) of the Corporation, (ii) the date on which such Share is converted into shares of Common Stock hereunder or (iii) the date on which such Share is otherwise acquired by the Corporation. Such dividends shall accrue whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. 2B. Dividend Payment Dates. All dividends that have accrued on the Series ---------------------- C Preferred shall be payable on March 31, June 30, September 30 and December 31 of each year, beginning on the first such date immediately following the Closing Date (as defined in Section 11 hereof) (the "Dividend Payment Dates"). All dividends that have accrued on each Share outstanding during the three-month period (or other period in the case of an initial Dividend Payment Date) ending upon such Dividend Payment Date shall be accumulated and shall remain accumulated dividends with respect to such Share until paid to the holder thereof; provided, however, that accumulations of dividends accrued on the Series C Preferred shall not bear interest. If a Dividend Payment Date falls on any date other than a Business Day (as defined in Section 11 hereof), the dividend payment due on such Dividend Payment Date shall be paid on the Business Day immediately following such Dividend Payment Date, with the same effect as if paid on the Dividend Payment Date without any additional accrual of dividends payable in respect of such delay. Dividends payable on each Dividend Payment Date shall be paid to record holders of the Shares as they appear on the books of the Corporation at the close of business on a date fixed by the Board not more than 60 days immediately preceding the applicable Dividend Payment Date. Cumulative and unpaid dividends on Series C Preferred for any past quarterly dividend periods may be paid at any time, without reference to any regular Dividend Payment Date, to holders of record of such Shares on such date, not exceeding 60 days immediately preceding the payment date thereof, as may be fixed by the Board. 2C. Distribution of Partial Dividend Payments. Except as otherwise ----------------------------------------- provided herein, if at any time the Corporation pays less than the total amount of dividends then accrued with respect to the Series C Preferred, such payment shall be distributed pro rata among the holders thereof based upon the aggregate accrued but unpaid dividends on the Shares held by each such holder. 2D. Payment of Dividends in Common Stock. The Corporation shall have the ------------------------------------- option of paying dividends accruing on the Series C Preferred either in cash, by the issuance or delivery of shares of Common Stock ("PIK Dividends") or any combination thereof. If the Corporation elects to pay any dividends accruing on the Series C Preferred not in cash but as PIK Dividends, the number of shares of Common Stock to be issued or delivered in payment of such dividends shall be determined by dividing the amount of cash that would otherwise be paid by the average Market Price (as defined in Section 11 hereof) of the Common Stock for the 10 trading days immediately preceding (but not including) the date of payment of such PIK Dividend. If the Corporation pays PIK Dividends, such payment in shares of Common Stock shall be made pro rata among the holders of the Series C Preferred based upon the aggregate accrued but unpaid dividends on the Shares held by each such holder, with cash paid in lieu of the issuance of fractional shares of Common Stock to the extent permitted under the Corporation's Loan Agreements (as defined in Section 11 hereof); any amounts not payable in lieu of fractional shares due to restrictions in the Loan Agreements shall continue to be payable as accrued and unpaid dividends. All shares of Common Stock when issued or delivered as PIK Dividends under this Section 2D shall be duly and validly issued, fully paid and nonassessable and shall be free from all taxes (other than income taxes payable by the holder) with respect to the issue thereof and all liens, charges and encumbrances created by, through or under the Corporation. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of the issuance of PIK Dividends, a number of shares of Common Stock it reasonably determines will be required to be issued as PIK Dividends. The Corporation shall take all such actions as may be reasonably necessary to assure that -2- all shares of Common Stock to be issued or delivered as PIK Dividends may be issued or delivered without violation of any applicable law or governmental regulation and shall use commercially reasonable efforts to satisfy any requirements of any domestic securities exchange upon which shares of Common Stock may be listed with respect to the issuance or delivery of PIK Dividends (except for official notice of issuance, which shall be immediately delivered by the Corporation upon each such issuance). Section 3. Liquidation. ----------- Upon any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (a "Liquidation"), each holder of Series C Preferred shall be entitled to receive, out of the assets of the Corporation available for distribution to stockholders, before any distribution or payment is made upon any Junior Securities (as defined in Section 11 hereof), an amount in cash equal to the aggregate Liquidation Value of all Shares held by such holder plus all accrued and unpaid dividends thereon through the effective date of the Liquidation. After payment to the holders of the Series C Preferred in full of the preferential amounts provided for in this Section 3, the holders of Series C Preferred shall have no right or claim to any of the remaining assets of the Corporation. If upon any Liquidation the Corporation's assets to be distributed among the holders of the Series C Preferred are insufficient to permit payment to such holders of the aggregate amount which they are entitled to be paid under this Section 3, then the entire assets available to be distributed to the Corporation's stockholders shall be distributed pro rata among such holders based upon the aggregate Liquidation Value (plus all accrued and unpaid dividends thereon through the effective date of the Liquidation) of the Series C Preferred held by each such holder. Not less than 30 days prior to the payment date stated therein, the Corporation shall mail written notice of any such Liquidation to each record holder of Series C Preferred as of a date at least three Business Days prior to the mailing of such notice, setting forth in reasonable detail the amount of proceeds to be paid with respect to each Share of the Series C Preferred and each share of Common Stock in connection with such Liquidation (assuming no conversion of Shares into Common Stock). At any time prior to a Liquidation, the holders of the Series C Preferred shall be entitled to convert their Shares into Common Stock in accordance with the provisions of Section 6 hereof. Neither the consolidation or merger of the Corporation into or with any other entity or entities (whether or not the Corporation is the surviving entity), nor the sale, conveyance, exchange or transfer (for cash, securities or other consideration) by the Corporation of all or any part of its assets, nor the reduction of the capital stock of the Corporation nor any other form of recapitalization or reorganization affecting the Corporation shall be deemed to be a Liquidation within the meaning of this Section 3. Section 4. Priority of Series C Preferred on Dividends and Redemptions. ----------------------------------------------------------- So long as any Series C Preferred remains outstanding, without the prior written consent of the holders of at least two-thirds of the outstanding Shares, and except for any repurchases of Common Stock in odd-lot tender offers, the Corporation shall not, nor shall it permit any Subsidiary (as defined in Section 11 hereof) to, redeem, purchase or otherwise acquire directly or indirectly for value any Junior Securities, nor shall the Corporation declare or pay any dividend or make any distribution upon any Junior Securities, if at the time of or immediately after any such redemption, purchase, acquisition, dividend or distribution the Corporation has failed to pay the full amount of dividends accrued on the Series C Preferred for all quarterly dividend periods terminating on or prior -3- to the date on which such redemption, purchase, acquisition, dividend or distribution is to occur; provided that the foregoing shall not prohibit the purchase or other acquisition of Junior Securities or rights to acquire Junior Securities from directors, officers or employees of the Corporation or its Subsidiaries in connection with the termination of their directorships or employment. Section 5. Voting Rights. ------------- 5A. Voting Procedures. The holders of the Series C Preferred shall be ----------------- entitled to notice of all meetings of the Corporation's stockholders in accordance with the Corporation's bylaws and applicable law. Each Share of Series C Preferred shall have one (1) vote per Share, except that when the holders of the Series C Preferred and the Common Stock shall vote together as a single class, then each holder of Series C Preferred shall be entitled to the number of votes with respect to such holder's Shares of Series C Preferred equal to the number of whole shares of Conversion Stock (as defined in Section 11 hereof) into which such Shares would have been converted under the provisions of Section 6A hereof (whether or not such holder is then entitled to convert such Shares under such Section) at the Conversion Price (as defined in Section 11 hereof) in effect on the record date for determining stockholders entitled to vote on such matters or, if no record date is specified, as of the date of such vote. 5B. General Voting Rights. The holders of the Series C Preferred shall --------------------- vote together as a single class with the holders of the Common Stock as provided in Section 5A hereof on all matters submitted to a vote of the holders of the Common Stock. Except as otherwise expressly provided herein or by applicable law, the holders of the Shares of Series C Preferred shall not be entitled to vote as a separate class on any matters submitted to a vote of the stockholders. 5C. Special Voting Rights. In addition to the voting rights provided in --------------------- Section 5B hereof and any voting rights provided by applicable law, so long as any Series C Preferred remains outstanding, (i) the holders of at least two- thirds of the Series C Preferred outstanding must approve, voting separately as a class, any amendment to the Certificate of Incorporation that would alter or change the powers, preferences or special rights of the Shares of Series C Preferred so as to affect them adversely and (ii) the holders of a majority of the Series C Preferred outstanding must approve, voting separately as a class, any proposed issuance of capital stock of the Corporation that ranks pari passu with or senior to the Series C Preferred as to dividends or assets, or any proposed issuance of capital stock of the Corporation that is required to be redeemed by the Corporation at any time that any Shares of Series C Preferred are outstanding, whether upon the occurrence of certain events or otherwise. Section 6. Conversion. ---------- 6A. Conversion at Option of Holder. ------------------------------ (i) At any time and from time to time after the 90th day following the Closing Date, any holder of Series C Preferred may convert all or any portion of the Series C Preferred held by such holder into a number of shares of Common Stock computed by dividing (x) the total amount of Liquidation Value (plus the aggregate accrued but unpaid dividends, if any) represented by the Shares to be converted by (y) the Conversion Price then in effect. -4- (ii) Each conversion of Series C Preferred pursuant to this Section 6A shall be deemed to have been effected as of the close of business on the date on which the certificate or certificates representing the Series C Preferred to be converted (duly endorsed or assigned to the Corporation or in blank) have been surrendered for conversion during normal business hours at the principal office of the Corporation, accompanied by written notice to the Corporation that the holder thereof elects to convert all or any portion of such Shares. Notwithstanding the immediately preceding sentence, if a conversion of Series C Preferred pursuant to this Section 6A is to be made in connection with or in anticipation of a material transaction affecting the Corporation, such conversion may, at the election of the holder thereof, be conditioned upon the consummation of such transaction, in which case such conversion (a) shall not be deemed to be effective until immediately prior to the consummation of such transaction and (b) shall be made based upon the Conversion Price in effect immediately prior to the consummation of such transaction. 6B. Mandatory Conversions. --------------------- (i) If, at any time from and after the Closing Date, the Market Price of the Common Stock exceeds $10.00 per share (which amount shall be proportionately adjusted for any recapitalization, stock split, reverse stock split, stock dividend or similar event resulting in a change in the shares of Common Stock) on each of 60 consecutive trading days, then all Shares of the Series C Preferred then outstanding shall automatically be deemed to have been surrendered by the holders thereof for conversion (and shall be automatically converted) into shares of Common Stock as provided in the next following sentence effective as of the close of business on the last day of such 60-day period. Each holder's Shares of Series C Preferred shall be converted into a number of shares of Common Stock computed by dividing (x) the total amount of Liquidation Value (plus the aggregate accrued but unpaid dividends, if any) represented by such holder's Shares by (y) the Conversion Price in effect as of the close of business on the last day of such 60-day period. (ii) The Corporation shall have the right, at its sole option, to convert all, but not less than all, of the then outstanding Shares of Series C Preferred into shares of Common Stock as provided in the next following sentence effective as of the close of business on the Business Day immediately preceding the date of consummation of any Corporate Change (as defined in Section 6G hereof); provided, however, that such conversion shall be subject to and conditioned upon the consummation of such Corporate Change. If the Corporation elects to exercise this special conversion right and the Corporate Change is consummated, each holder's Shares of Series C Preferred shall automatically be deemed to have been surrendered by such holder for conversion (and shall be automatically converted) into a number of shares of Common Stock computed by dividing (x) the total amount of Liquidation Value (plus the aggregate accrued but unpaid dividends, if any) represented by such holder's Shares by (y) the Conversion Price in effect as of the close of business on the Business Day immediately preceding the date of consummation of such Corporate Change. The Corporation may exercise this special conversion right by mailing to the holders of record of the Series C Preferred at least 20 days in advance of the expected effective date of the Corporate Change a written notice of its election to do so, which notice shall include (a) a summary description of the Corporate Change, (b) a statement that the Corporation elects to exercise its special conversion right under this Section 6B(ii) in connection with such Corporate Change and (c) the expected effective date of such Corporate Change. The exercise by the Corporation of this special conversion right shall be irrevocable. -5- (iii) All Shares of the Series C Preferred that remain outstanding at the close of business on the Mandatory Conversion Date (as defined in Section 11 hereof) shall automatically be deemed to have been surrendered by the holders thereof for conversion (and shall be automatically converted) into shares of Common Stock as provided in the next following sentence effective as of the close of business on the Mandatory Conversion Date. Each holder's Shares of Series C Preferred shall be converted into a number of shares of Common Stock computed by dividing (x) the total amount of Liquidation Value (plus the aggregate accrued but unpaid dividends, if any) represented by such holder's Shares by (y) the Conversion Price in effect as of the close of business on the Mandatory Conversion Date. 6C. Conversion Procedures. --------------------- (i) At the time any conversion of Series C Preferred pursuant to this Section 6 has been effected, the rights of the holder of the Shares converted as a holder of Series C Preferred shall cease, and the person or persons in whose name or names any certificate or certificates for shares of Conversion Stock are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the shares of Conversion Stock represented thereby. (ii) As soon as practicable after a conversion of Series C Preferred pursuant to this Section 6 has been effected (but in any event within five Business Days thereafter), the Corporation shall deliver or cause to be delivered to the record holder of the Shares converted: (a) unless in book-entry form, a certificate or certificates representing the number of shares of Conversion Stock issuable by reason of such conversion in such name or names and such denomination or denominations as such holder has specified; (b) payment in cash of the amount, if any, payable under subparagraph (vi) below with respect to fractional shares upon such conversion; and (c) a certificate representing any Shares of Series C Preferred that were represented by the certificate or certificates delivered to the Corporation in connection with such conversion but which were not converted; provided, however, that in the event of a conversion of the Series C Preferred pursuant to Section 6B hereof, the items referred to in clauses (a) and (b) above shall be delivered as soon as practicable (but in any event within five Business Days) after the certificates representing the Shares are actually surrendered for conversion during normal business hours at the principal office of the Corporation. (iii) The issuance or delivery of certificates for shares of Conversion Stock upon conversion of Series C Preferred shall be made without charge to the holders of such Series C Preferred for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such conversion and the related issuance of shares of Conversion Stock; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the record holder of Shares converted. -6- (iv) The Corporation shall not close its books against the transfer of Series C Preferred or of Conversion Stock issued or issuable upon conversion of Series C Preferred in any manner that interferes in any material respect with the timely conversion of Series C Preferred. The Corporation shall assist and cooperate with any holder of Shares required to make any governmental filings or obtain any governmental approvals prior to or in connection with any conversion of Shares hereunder (including, without limitation, making any filings required to be made by the Corporation). (v) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of issuance upon the conversion of the Series C Preferred, such number of shares of Common Stock issuable upon the conversion of all outstanding Series C Preferred. All shares of Common Stock which are so issuable shall be free of preemptive rights and shall, when issued, be duly and validly issued, fully paid and nonassessable and free from all taxes (other than income taxes payable by the holder) with respect to the issue thereof and all liens, charges and encumbrances created by, through or under the Corporation. The Corporation shall not take any action which would cause the number of authorized but unissued shares of Common Stock to be less than the number of such shares required to be reserved hereunder for issuance upon conversion of the Series C Preferred. (vi) If any fractional interest in a share of Conversion Stock would, except for the provisions of this subparagraph (vi), be delivered upon any conversion of the Series C Preferred, the Corporation, in lieu of delivering the fractional share therefor, shall pay an amount to the holder thereof equal to the Market Price of such fractional interest as of the third Business Day preceding the date of conversion to the extent permitted under the Corporation's Loan Agreements. 6D. Conversion Price. ---------------- (i) The initial Conversion Price shall be $4.25. In order to prevent dilution of the conversion rights granted under this Section 6, the Conversion Price shall be subject to adjustment from time to time pursuant to this Section 6D. (ii) If and whenever after the Closing Date, the Corporation issues or sells for cash, marketable securities or cash equivalents, or in accordance with Section 6E hereof is deemed to have issued or sold for cash, marketable securities or cash equivalents, any Common Stock for a consideration per share less than the average Market Price of the Common Stock for the 30 trading days immediately preceding (but not including) the date of such issue or sale, then immediately upon such issue or sale the Conversion Price shall be reduced to the Conversion Price determined by multiplying the Conversion Price in effect immediately prior to such issue or sale by a fraction, the numerator of which shall be the sum of (1) the number of shares of Common Stock Deemed Outstanding (as defined in Section 11 hereof) immediately prior to such issue or sale plus (2) the number of shares of Common Stock which the aggregate consideration received (and deemed to be received hereunder) by the Corporation upon such issue or sale would purchase at such average Market Price, and the denominator of which shall be the number of shares of Common Stock Deemed Outstanding immediately after such issue or sale. -7- (iii) Notwithstanding anything contained herein to the contrary, no adjustment of the Conversion Price pursuant to this Section 6D or Section 6E hereof shall be made (a) upon the issuance or conversion of Series C Preferred or the payment of any PIK Dividend, (b) upon the issuance or sale of Common Stock, Options (as defined in Section 11 hereof) or Convertible Securities (as defined in Section 11 hereof) to directors, officers and employees of the Corporation and its Subsidiaries pursuant to the terms of any employee benefit or similar plans of the Corporation or any of its Subsidiaries, including the issuance or sale of Common Stock pursuant to any such Options or Convertible Securities as are outstanding as of the Closing Date, (c) upon the issuance or sale of Common Stock or Options pursuant to the terms of the Warrant Agreement (as defined in Section 11 hereof), (d) on account of any change in the terms of or any expiration or termination of any of the Options or Convertible Securities referred to in clauses (b) and (c) above or (e) in connection with any of the events or upon the issuance or sale of any Common Stock, Options or Convertible Securities referred to in Sections 7 and 8 hereof. 6E. Effect on Conversion Price of Certain Events. For purposes of -------------------------------------------- determining the adjusted Conversion Price under Section 6D hereof, the following shall be applicable: (i) Issuance of Options. If the Corporation in any manner grants, ------------------- issues or sells any Options and the price per share for which Common Stock is issuable upon the exercise of such Options, or upon conversion or exchange of any Convertible Securities issuable upon the exercise of such Options, is less than the average Market Price of the Common Stock for the 30 trading days immediately preceding (but not including) the date of such grant, issue or sale of Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to be outstanding and to have been issued and sold by the Corporation at the time of the granting, issue or sale of such Options for such price per share. For purposes of this Section 6E(i), the "price per share for which Common Stock is issuable" shall be determined by dividing (a) the total amount, if any, received or receivable by the Corporation as consideration for the granting, issue or sale of such Options, plus the minimum aggregate amount of additional consideration payable to the Corporation upon exercise of all such Options, plus in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the issuance or sale of such Convertible Securities and the conversion or exchange thereof, by (b) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options. No further adjustment of the Conversion Price shall be made when Convertible Securities are actually issued upon the exercise of such Options or when Common Stock is actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities. (ii) Issuance of Convertible Securities. If the Corporation in any ---------------------------------- manner issues or sells any Convertible Securities and the price per share for which Common Stock is issuable upon conversion or exchange thereof is less than the average Market Price of the Common Stock for the 30 trading days immediately preceding (but not including) the date of such issue or sale of Convertible Securities, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of such Convertible Securities shall be deemed to be outstanding and to have been issued and sold by the Corporation at the time of the issuance or sale of such Convertible -8- Securities for such price per share. For purposes of this Section 6E(ii), the "price per share for which Common Stock is issuable" shall be determined by dividing (a) the total amount received or receivable by the Corporation as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof, by (b) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Price shall be made when Common Stock is actually issued upon the conversion or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 6, no further adjustment of the Conversion Price shall be made by reason of such issue or sale. (iii) Change in Option Price or Conversion Rate. If the purchase ----------------------------------------- price provided for in any Options, the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities or the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock changes at any time, the Conversion Price in effect at the time of such change shall be immediately adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of Section 6E, if the terms of any Option or Convertible Security are changed in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such change; provided that no such change shall at any time cause the Conversion Price hereunder to be increased. (iv) Treatment of Expired Options and Unexercised Convertible -------------------------------------------------------- Securities. Upon the expiration of any Option or the termination of any right - ---------- to convert or exchange any Convertible Security without the exercise of any such Option or right, the Conversion Price then in effect hereunder shall be adjusted immediately to the Conversion Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Security, to the extent outstanding immediately prior to such expiration or termination, never been issued; provided that if the Corporation shall accelerate the expiration of any Option or the termination of any right to convert or exchange any Convertible Security, such adjustment shall not be effective until 15 days after written notice thereof has been given to all holders of the Series C Preferred. For purposes of Section 6E, the expiration or termination of any Option or Convertible Security which was outstanding as of the Closing Date shall not cause the Conversion Price hereunder to be adjusted unless, and only to the extent that, a change in the terms of such Option or Convertible Security caused it to be deemed to have been issued after the Closing Date. (v) Calculation of Consideration Received. If any Common Stock, ------------------------------------- Option or Convertible Security is issued or sold or deemed to have been issued or sold for cash, marketable securities or cash equivalents, the consideration received therefor shall be deemed to be the amount received by the Corporation therefor (before deducting any expenses, discounts or commissions paid or incurred in connection with such issue or sale). -9- (vi) Integrated Transactions. In case any Option is issued in ----------------------- connection with the issue or sale of other securities of the Corporation, together comprising one integrated transaction in which no specific consideration is allocated to such Option by the parties thereto, the Option shall be deemed to have been issued for a consideration of $.01. (vii) Treasury Shares. The number of shares of Common Stock --------------- outstanding at any given time shall not include shares owned or held by or for the account of the Corporation or any Subsidiary, and the disposition of any shares so owned or held to any person other than the Corporation or any Subsidiary shall be considered an issue or sale of Common Stock. (viii) Record Date. If the Corporation takes a record of the ----------- holders of Common Stock for the purpose of entitling them (a) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (b) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or upon the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be, unless subsequently abandoned. 6F. Subdivision or Combination of Common Stock. If the Corporation at any ------------------------------------------ time subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased. 6G. Corporate Change. Any recapitalization, reorganization, ---------------- reclassification, consolidation, merger or sale of all or substantially all of the Corporation's assets, in each case which is effected in such a manner that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets in exchange for Common Stock, is referred to herein as a "Corporate Change". Prior to the consummation of any Corporate Change, the Corporation shall make appropriate provisions to insure that each of the holders of Series C Preferred shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of such holder's Series C Preferred, such shares of stock, securities or assets as such holder would have received in connection with such Corporate Change if such holder had converted its Series C Preferred immediately prior to such Corporate Change. In each such case, the Corporation shall also make appropriate provisions to insure that the provisions of this Section 6 and Sections 7 and 8 hereof shall thereafter be applicable to the Series C Preferred (including, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is other than the Corporation, an immediate adjustment of the Conversion Price to the value for the Common Stock reflected by the terms of such consolidation, merger or sale, and a corresponding immediate adjustment in the number of shares of Conversion Stock acquirable and receivable upon conversion of Series C Preferred, if the value so reflected is less than the Conversion Price in effect immediately prior to such consolidation, merger or sale). The Corporation shall not effect any such consolidation, merger or sale unless, prior to the consummation thereof, the successor entity (if other than the -10- Corporation) resulting from consolidation or merger or the entity purchasing such assets assumes by written instrument the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire. The provisions of this Section 6G shall not apply in the event of a conversion of the Series C Preferred pursuant to Section 6B hereof prior to the consummation of the Corporate Change. 6H. Certain Events. If any event occurs of the type contemplated by the -------------- provisions of this Section 6 but not expressly provided for by such provisions, then the Board shall make an appropriate adjustment in the Conversion Price so as to protect the rights of the holders of Series C Preferred; provided that no such adjustment shall increase the Conversion Price as otherwise determined pursuant to this Section 6 or decrease the number of shares of Conversion Stock issuable upon conversion of each share of Series C Preferred. 6I. Notices. ------- (i) As promptly as practicable after any adjustment of the Conversion Price hereunder, the Corporation shall give written notice thereof to all holders of Series C Preferred, setting forth in reasonable detail and certifying the calculation and the effective date of such adjustment. In addition, the Corporation shall give written notice to all holders of Series C Preferred of any conversion of the Series C Preferred pursuant to Section 6B hereof within five Business Days after the effective date of such conversion. (ii) The Corporation shall give written notice to all holders of Series C Preferred at least 15 days prior to the date on which the Corporation closes its books or takes a record (a) with respect to any dividend or distribution upon Common Stock or (b) with respect to any pro rata subscription offer to holders of Common Stock. (iii) The Corporation shall also give written notice to all holders of Series C Preferred of any proposed Corporate Change at least 20 days prior to the date on which any Corporate Change is expected to take place. 6J. Calculations. If the amount of any adjustment of the Conversion Price ------------ required pursuant to this Section 6 would be less than 1% of the Conversion Price in effect at the time such adjustment is otherwise so required to be made, such amount shall be carried forward and an adjustment with respect thereto made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate at least 1% of such Conversion Price. All calculations under this Section 6 shall be made to the nearest one-tenth of a cent ($.001). Section 7. Liquidating Dividends. --------------------- If the Corporation pays a dividend upon the Common Stock payable otherwise than in cash or other property out of earnings or earned surplus (determined in accordance with generally accepted accounting principles, consistently applied) except for a stock dividend payable in shares of Common Stock (a "Liquidating Dividend"), then the Corporation shall pay to the holders of Series C Preferred at the time of payment thereof the Liquidating Dividends which would have been paid -11- on the shares of Conversion Stock had such Series C Preferred been converted immediately prior to the date on which a record is taken for such Liquidating Dividend, or, if no record is taken, the date as of which the record holders of Common Stock entitled to such Liquidating Dividend are to be determined. Section 8. Purchase Rights. --------------- If at any time the Corporation grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of the Common Stock (the "Purchase Rights"), then each holder of Series C Preferred shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Conversion Stock acquirable upon conversion of such holder's Series C Preferred immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights. Section 9. Event of Noncompliance. ---------------------- 9A. Definition. An Event of Noncompliance shall have occurred (i) ---------- whenever dividends on the Series C Preferred shall be in arrears in an amount equal to at least four full quarterly dividends, whether or not consecutive and whether or not the payment of such dividends is legally permissible or is prohibited by any agreement to which the Corporation is subject; or (ii) if the Corporation or any Significant Subsidiary (as defined in Section 11 hereof) makes an assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due; or an order, judgment or decree is entered adjudicating the Corporation or any Significant Subsidiary bankrupt or insolvent; or any order for relief with respect to the Corporation or any Significant Subsidiary is entered under the Federal Bankruptcy Code; or the Corporation or any Significant Subsidiary petitions or applies to any tribunal for the appointment of a custodian, trustee, receiver or liquidator of the Corporation or any Significant Subsidiary or of any substantial part of the assets of the Corporation or any Significant Subsidiary, or commences any proceeding (other than a proceeding for the voluntary liquidation and dissolution of a Subsidiary) relating to the Corporation or any Significant Subsidiary under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction; or any such petition or application is filed, or any such proceeding is commenced, against the Corporation or any Significant Subsidiary and either (a) the Corporation or any such Significant Subsidiary by any act indicates its approval thereof, consent thereto or acquiescence therein or (b) such petition, application or proceeding is not dismissed within 90 days. The Corporation shall promptly deliver notice of the occurrence of an Event of Noncompliance to the holders of Series C Preferred upon discovery thereof. 9B. Consequences of Event of Noncompliance. If an Event of Noncompliance -------------------------------------- has occurred and is continuing, the number of directors constituting the Board shall, at the request of the holders of a majority of the Series C Preferred then outstanding, be increased by two members, and the holders of the Series C Preferred shall have the special right, voting separately as a single class -12- (with each Share being entitled to one vote) and to the exclusion of all other classes of the Corporation's stock, to elect two individuals to fill such newly created directorships, to fill any vacancies in such directorships and to remove any individuals elected to such directorships. The newly created directorships shall be entitled to the same rights and powers as the other directorships of the Corporation. The special right of the holders of Series C Preferred to elect individuals to fill such directorships, to fill any vacancies in such directorships and to remove any individuals elected to such directorships may be exercised at the special meeting called pursuant to this Section 9B, at any annual or other special meeting of stockholders and, to the extent and in the manner permitted by applicable law, pursuant to a written consent in lieu of a stockholders meeting. Such special right shall continue until such time as there is no longer any Event of Noncompliance in existence, at which time such special right shall terminate subject to revesting upon the occurrence and continuation of any subsequent Event of Noncompliance which gives rise to such special right hereunder. At any time when such special right has vested in the holders of the Series C Preferred, a proper officer of the Corporation shall, upon the written request of the holders of at least 10% of the Series C Preferred then outstanding addressed to the secretary of the Corporation, call a special meeting of the holders of Series C Preferred for the purpose of electing or removing directors pursuant to and in accordance with this Section 9B. Such meeting shall be held at the earliest legally permissible date at the principal office of the Corporation, or at such other place designated by the holders of at least 10% of the Series C Preferred then outstanding. If such meeting has not been called by a proper officer of the Corporation within 10 days after personal service of such written request upon the secretary of the Corporation or within 20 days after mailing the same to the secretary of the Corporation at its principal office, then the holders of at least 10% of the Series C Preferred then outstanding may designate in writing one of their number to call such meeting at the expense of the Corporation, and such meeting may be called by such person so designated upon the notice required for annual meetings of stockholders and shall be held at the Corporation's principal office, or at such other place designated by the holders of at least 10% of the Series C Preferred then outstanding. Any holder of Series C Preferred so designated shall be given access to the stock record books of the Corporation for the purpose of causing a meeting of stockholders to be called pursuant to this Section 9B. At any meeting or at any adjournment thereof at which the holders of Series C Preferred have the special right to elect or remove directors, the presence, in person or by proxy, of the holders of a majority of the Series C Preferred then outstanding shall be required to constitute a quorum for the election or removal of any director by the holders of the Series C Preferred exercising such special right. The vote of a majority of such quorum shall be required to elect or remove any such director. Any directors so elected by the holders of Series C Preferred shall continue to serve as directors of the Corporation until the date on which there is no longer any Event of Noncompliance in existence. On such date, the number of directors constituting the Board shall decrease to such number as constituted the whole Board immediately prior to the occurrence of the Event of Noncompliance giving rise to the special right to elect directors. -13- If any Event of Noncompliance exists, each holder of Series C Preferred shall also have any other rights which such holder is entitled to under any contract or agreement and any other rights which such holder may have pursuant to applicable law. Section 10. Record Holders. -------------- The Corporation shall deem and treat the record holder of any Series C Preferred as the true and lawful owner thereof for all purposes, and the Corporation shall not be affected by any notice to the contrary. Section 11. Definitions. ----------- "Business Day" means any day other than a Saturday, Sunday or a day on ------------ which state or federally chartered banking institutions in Dallas, Texas are not required to be opened. "Closing Date" has the meaning given such term in the Stock Purchase ------------ Agreement. "Common Stock" means, collectively, the Corporation's Common Stock, ------------ par value $.01 per share (including any and all Conversion Stock), and any capital stock of any class of the Corporation hereafter authorized which is not limited to a fixed sum or percentage of par or stated value in respect to the rights of the holders thereof to participate in dividends or in the distribution of assets upon any Liquidation of the Corporation. "Common Stock Deemed Outstanding" means, at any given time, the number ------------------------------- of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock deemed to be outstanding pursuant to Sections 6E(i) and 6E(ii) hereof whether or not the Options or Convertible Securities are actually exercisable at such time. "Conversion Price" means the conversion price per share of Common ---------------- Stock into which the Series C Preferred is convertible, as such conversion price may be adjusted pursuant to Section 6D hereof. "Conversion Stock" means shares of the Corporation's Common Stock, ---------------- provided that if there is a change such that the securities issuable upon conversion of the Series C Preferred are issued by an entity other than the Corporation or there is a change in the type or class of securities so issuable, then the term "Conversion Stock" shall mean one share of the security issuable upon conversion of the Series C Preferred if such security is issuable in shares, or shall mean the smallest unit in which such security is issuable if such security is not issuable in shares. "Convertible Securities" means any stock or securities directly or ---------------------- indirectly convertible into or exchangeable for Common Stock. "Junior Securities" means any capital stock or other equity securities ----------------- of the Corporation, except for the Series C Preferred. "Liquidation Value" of any Share as of any particular date shall be ----------------- equal to $25.00. -14- "Loan Agreements" means all loan or credit agreements or indentures to --------------- which the Corporation is a party at any time. "Mandatory Conversion Date" means the third anniversary of the Closing ------------------------- Date. "Market Price" of any security on any day means the closing price of ------------ such security's sales on such day on the principal securities exchange on which such security may at the time be listed, or, if there were no sales on such exchange on such day, the average of the highest bid and lowest asked prices on such exchange at the end of such day, or, if on such day such security is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, on such day, or, if on such day such security is not quoted in the NASDAQ System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization. If at any time such security is not listed on any securities exchange or quoted in the NASDAQ System or the over-the-counter market, the "Market Price" shall be the fair value thereof determined jointly by the Corporation and the holders of a majority of the outstanding Shares of the Series C Preferred. If such parties are unable to reach agreement within a reasonable period of time, such fair value shall be determined by an independent appraiser experienced in valuing securities jointly selected by the Corporation and the holders of a majority of the outstanding Shares of the Series C Preferred. The determination of such appraiser shall be final and binding upon the parties, and the Corporation shall pay the fees and expenses of such appraiser. For purposes of this definition, "Market Price" shall include, in the case of an underwritten public offering or a private offering of securities that are currently publicly traded, an allowance for a customary discount to the current market trading price which is determined by the managing underwriter (if any) and the Corporation to be reasonably required to effect such offering. "Options" means any rights, warrants or options to subscribe for or ------- purchase Common Stock or Convertible Securities. "Significant Subsidiary" means, with respect to any person, a ---------------------- Subsidiary constituting a "significant subsidiary" of such person for purposes of Rule 1-02(w) of Regulation S-X under the Securities Act of 1933, or any successor provision thereof. "Stock Purchase Agreement" means the Amended and Restated Stock ------------------------ Purchase Agreement dated as of December 13, 1999, by and between the Corporation and Wiser Investment Company, LLC, as such agreement may from time to time be amended in accordance with its terms. "Subsidiary" means, with respect to any person, any corporation, ---------- limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that person or one or more of the other Subsidiaries of that person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that person or one or more of the other Subsidiaries of that person or a combination thereof. For purposes hereof, a person or persons shall -15- be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such person or persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses. "Warrant Agreement" has the meaning given such term in the Stock ----------------- Purchase Agreement. Section 12. Amendment and Waiver. -------------------- No amendment, modification or waiver of any provision of Sections 1 to 15 of this Certificate of Designations shall be binding or effective without the prior written consent of the holders of at least two-thirds of the Series C Preferred outstanding at the time such action is taken; provided that no such action shall (a) change the rate at which or the manner in which dividends on the Series C Preferred accrue or the times at which such dividends become payable, without the prior written consent of the holders of at least 90% of the Series C Preferred then outstanding, (b) increase the Conversion Price of the Series C Preferred or decrease the number of shares or class of stock into which the Series C Preferred is convertible other than as provided under Section 6 hereof, without the prior written consent of the holders of at least 90% of the Series C Preferred then outstanding or (c) change the percentage required to approve any change described in clauses (a) and (b) above, without the prior written consent of the holders of at least 90% of the Series C Preferred then outstanding. Section 13. Notices. ------- Except as otherwise expressly provided hereunder, all notices referred to herein shall be in writing and shall be delivered by first class registered or certified United States mail or by reputable overnight courier service, charges prepaid, and shall be deemed to have been given when so mailed or sent (i) to the Corporation (attention: Secretary) at its principal executive offices and (ii) to any stockholder, at such holder's address as it appears in the stock records of the Corporation, or to such other address as the Corporation or holder, as the case may be, shall have designated by notice similarly given. Section 14. Acquired Shares. --------------- Any Shares of Series C Preferred purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such Shares shall upon their cancellation become authorized but unissued shares of preferred stock of the Corporation and may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board, subject to the conditions and restrictions on issuance set forth herein. Section 15. Successors and Transferees. -------------------------- The provisions applicable to Shares of Series C Preferred shall bind and inure to the benefit of and be enforceable by the Corporation, the respective successors to the Corporation, and by any record holder of Shares of Series C Preferred. -16- * * * * IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed this 25th day of May, 2000. THE WISER OIL COMPANY By: /s/ Andrew J. Shoup, Jr. ----------------------------------- Name: Andrew J. Shoup, Jr. ------------------------------ Title: President ----------------------------- -17- EX-10.16 6 0006.txt EMPLOYMENT AGREEMENT EXHIBIT 10.16 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT (this "Agreement"), dated as of May 26, 2000 (the "Effective Date"), between The Wiser Oil Company, a Delaware corporation (the "Company"), and George K. Hickox, Jr. (the "Employee"). WHEREAS, the Company desires to employ the Employee, and the Employee desires to be employed by the Company, on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Company and the Employee hereby agree as follows: 1. Employment. The Company agrees to employ the Employee, and the ---------- Employee agrees to undertake employment with the Company, for the period set forth in Paragraph 2, in the positions and with the duties and responsibilities set forth in Paragraph 3, and upon the other terms and conditions herein provided. 2. Term. The employment of the Employee by the Company as provided in ---- Paragraph 1 shall be for a period commencing on the Effective Date and ending upon the second anniversary thereof unless further extended or sooner terminated as herein provided (the "Employment Term"). The Employment Term may be extended for such additional period as may from time to time be mutually agreed upon in writing between the parties hereto. 3. Position and Duties. ------------------- (a) During the Employment Term, the Employee shall serve as Chief Executive Officer and (to the extent elected or appointed as a director of the Company) Chairman of the Board of the Company, accountable only to the Board of Directors of the Company (the "Board"). In such capacities, the Employee shall perform the duties of Chief Executive Officer and Chairman of the Board, as set forth in the Company's Bylaws, as they may be amended from time to time, and shall have such other duties, functions, responsibilities, and authority commensurate with such offices as are from time to time delegated to the Employee by the Board, provided that such duties, functions, responsibilities, and authority are reasonable and customary for a person serving as Chief Executive Officer and Chairman of the Board of an enterprise comparable to the Company. (b) During the Employment Term, the Employee shall devote a substantial majority of his time, skill, and attention and his best efforts during normal business hours to the business and affairs of the Company necessary to discharge faithfully and efficiently the duties and responsibilities delegated and assigned to the Employee herein or pursuant hereto, except for usual, ordinary, and customary periods of vacation and absence due to illness or other disability. The Company acknowledges that the Employee has outside business interests and agrees that the Employee may devote a portion of his time and attention to such business interests provided such business interests do not materially interfere with the Employee's performance of his duties hereunder; provided, however, in no event shall such other activities by the Employee be deemed to materially interfere with the Employee's duties hereunder until the Employee has been notified in writing thereof by the Board and been given a reasonable period in which to cure such interference. (c) During the Employment Term, the Employee shall serve, if elected or appointed, as a director of the Company, as a director and officer of any subsidiary of the Company, and as a member of any committee of the Board or of the board of directors of any subsidiary of the Company. (d) All services that the Employee may render to the Company or any of its subsidiaries in any capacity during the Employment Term shall be deemed to be services required by this Agreement and consideration for the compensation provided for herein. 4. Compensation and Related Matters. -------------------------------- (a) Base Salary. During the Employment Term, the Company shall pay to the ----------- Employee for his services hereunder a base salary at the rate of one dollar ($1.00) per year, subject to adjustment as set forth herein, payable prior to the end of each year during the Employment Term. If during the Employment Term the Employee's base salary exceeds one dollar per year, such salary shall be paid in equal installments in accordance with the Company's standard payroll practices. In addition to base salary, the Employee may be paid bonuses in such amounts as may be determined by the Board, in its discretion. (b) Base Salary Adjustments. The base salary payable to the Employee ----------------------- hereunder may be adjusted from time to time by the Board, in its discretion. (c) Employee Benefits. During the Employment Term, the Employee shall be ----------------- entitled to participate in any and all employee benefit plans, programs, and arrangements provided by the Company to its executive officers generally, subject to and on a basis consistent with the terms, conditions, and overall administration (including eligibility and vesting requirements) of such plans, programs, and arrangements; provided, however, that, unless otherwise determined by the Board, the Employee shall not be entitled to receive any stock options, restricted stock or other similar stock-based awards under the Company's stock incentive plans. (d) Expenses. -------- (i) During the Employment Term, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in performing his duties and responsibilities hereunder, in accordance with the policies, practices, and procedures of the Company from time to time in effect for its executive officers. (ii) During the Employment Term, the Company shall, at its sole expense, provide the Employee with a leased automobile, of a make, model, color and year reasonably -2- acceptable to him, for the Employee's business and private use while in Dallas, Texas on Company business. In addition, during the Employment Term, the Company shall, upon receipt of itemized vouchers for expenses, submitted to the Company on a monthly basis, reimburse the Employee for his reasonable and necessary expenses, including maintenance, repairs, gasoline and insurance, incurred in the operation of such leased automobile. (iii) During the Employment Term, the Company shall reimburse the Employee for all actual and reasonable expenses associated with the Employee's travel to and from Philadelphia, Pennsylvania for purposes of Company business. (iv) During the Employment Term, the Company shall, at its sole expense, provide the Employee with suitable alternative housing in Dallas, Texas, and shall pay or reimburse the Employee for all utility and hook-up costs associated with such alternative housing. 5. Termination of Employment by Company. ------------------------------------ (a) Death. The Employee's employment hereunder shall terminate ----- automatically upon his death. (b) Disability. If the Disability (as defined below) of the Employee ---------- occurs during the Employment Term, the Company may notify the Employee of the Company's intention to terminate the Employee's employment hereunder for Disability. In such event, the Employee's employment hereunder shall terminate effective on the 30th day following the date such notice of termination is received by the Employee, provided that the Employee shall not have returned to the full-time performance of his duties hereunder and performed the same free of any Disability through such 30-day period. For purposes of this Agreement, the "Disability" of the Employee shall be deemed to have occurred if the Employee shall have been unable to perform substantially his duties hereunder for 90 consecutive days (excluding any leaves of absence approved by the Company) as a result of his physical or mental incapacity. If so terminated, the Employee shall be entitled to receive the amount of any insurance benefits and proceeds payable to the Employee under disability insurance programs and policies, if any, then maintained by the Company for the Employee's benefit. (c) Cause. The Board may terminate the Employee's employment hereunder ----- for Cause (as defined below). For purposes of this Agreement, "Cause" shall mean any of the following: (i) conduct by the Employee that constitutes willful misconduct, fraud, dishonesty, or a criminal act with respect to the Company or its subsidiaries; (ii) conviction of the Employee of a felony involving fraud, dishonesty, or moral turpitude; -3- (iii) the willful and continued failure by the Employee to substantially perform his duties hereunder; or (iv) the willful and material breach by the Employee of any of the provisions of this Agreement. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause without (i) first, notice to the Employee setting forth the reasons for the Board's intention to terminate his employment for Cause, (ii) next, an opportunity for the Employee, together with his counsel, to be heard before the Board, and (iii) thereafter, delivery to the Employee of a Notice of Termination (as defined below) from the Company, which notice shall be accompanied by a resolution duly adopted by the Board finding that, in the good faith opinion of the Board, Cause has occurred as defined hereunder. (d) Notice of Termination. Any termination of the Employee's employment --------------------- hereunder by the Company shall be communicated by a Notice of Termination to the Employee. For purposes of this Agreement, a "Notice of Termination" shall mean a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment under the provision so indicated, and (iii) specifies the effective date of termination. (e) Obligations. If the Employee's employment hereunder is terminated by ----------- reason of his death or Disability or for Cause, the Company shall thereafter have no further obligations to the Employee under this Agreement, except as provided in Paragraphs 12 and 13. 6. Termination of Employment by Employee. The Employee shall have the ------------------------------------- right to terminate his employment hereunder at any time by providing at least 30 days prior written notice of termination to the Company. Following such notice, the Employee shall continue to receive his base salary at the then current annual rate fixed herein or pursuant hereto for the period through the date of termination, provided his employment is not terminated earlier pursuant to Paragraph 5 hereof, but the Company shall not be obligated to pay any base salary or compensation (including severance pay) for any period of time after such termination. The foregoing shall not prevent the Company or the Board from terminating the Employee's employment pursuant to Paragraph 5 hereof earlier than the date of termination fixed pursuant to this Paragraph 6. 7. Compliance With Other Agreements. -------------------------------- (a) The Company represents and warrants to the Employee that the execution, delivery, and performance by the Company of this Agreement have been duly authorized by all necessary corporate action of the Company and do not and will not conflict with or result in a violation of any provision of, or constitute a default under, any contract, agreement, instrument, or obligation to which the Company is a party or by which it is bound. -4- (b) The Employee represents and warrants to the Company that the execution, delivery, and performance by the Employee of this Agreement do not and will not conflict with or result in a violation of any provision of, or constitute a default under, any contract, agreement, instrument, or obligation to which the Employee is a party or by which he is bound. 8. Certain Additional Payments by the Company. Notwithstanding ------------------------------------------ anything to the contrary in this Agreement, in the event that any payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the "Excise Tax"), the Company shall pay to the Employee an additional payment (a "Gross-up Payment") in an amount such that after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, the Employee retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. The Company and the Employee shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment. The Employee shall notify the Company immediately in writing of any claim by the Internal Revenue Service which, if successful, would require the Company to make a Gross- up Payment (or a Gross-up Payment in excess of that, if any, initially determined by the Company and the Employee) within five days of the receipt of such claim. The Company shall notify the Employee in writing at least five days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If the Company decides to contest such claim, the Employee shall cooperate fully with the Company in such action; provided, however, the Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of the Company's action. If, as a result of the Company's action with respect to a claim, the Employee receives a refund of any amount paid by the Company with respect to such claim, the Employee shall promptly pay such refund to the Company. If the Company fails to timely notify the Employee whether it will contest such claim or the Company determines not to contest such claim, then the Company shall immediately pay to the Employee the portion of such claim, if any, which it has not previously paid to the Employee. 9. Confidentiality. During the Employment Term and thereafter without --------------- limitation of time, the Employee shall hold in strict confidence and shall not, directly or indirectly, disclose or reveal to any person, or use for his own personal benefit or for the benefit of anyone else, any trade secrets, confidential dealings, or other confidential or proprietary information of any kind, nature, or description (whether or not acquired, learned, obtained, or developed by the Employee alone or in conjunction with others) belonging to or concerning the Company or any of its subsidiaries (collectively, the "Information"), except (a) with the prior written consent of the Company duly authorized by the Board, (b) in the course of the proper performance of the Employee's duties hereunder, or (c) as required by applicable law or legal process. The provisions of this Paragraph 9 shall be inoperative as to such portions of the Information that (a) are or become generally available -5- to the public other than as a result of a disclosure by the Employee in violation of this Agreement or (b) become available to the Employee on a non- confidential basis from a source that is not bound by an obligation of confidentiality to the Company. The provisions of this Paragraph 9 shall continue in effect notwithstanding termination of the Employee's employment hereunder for any reason. 10. Arbitration. Any controversy or claim arising out of or relating to ----------- this Agreement or the breach thereof, excepting any controversy or claim arising out of or relating to Paragraph 9 of this Agreement or any breach thereof, shall be settled by arbitration before an arbitrator in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration shall be conducted in Houston, Texas. In any such arbitration, the arbitrator shall not have the power to reform or modify this Agreement in any way and to that extent his powers are so limited. Neither party shall resort to litigation except to enforce or appeal from such arbitration or to enforce Paragraph 9 of this Agreement. If arbitration is necessary to enforce or interpret any of the Employee's rights or obligations under this Agreement, and the Employee is the prevailing party in such arbitration, the Employee shall be entitled to reimbursement by the Company for any reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which the Employee may be entitled. 11. Withholding Taxes. The Company shall withhold from any payments to ----------------- be made to the Employee hereunder such amounts (including social security contributions and federal income taxes) as shall be required by federal, state, and local withholding tax laws. 12. No Effect on Other Contractual Rights. The provisions of this ------------------------------------- Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable to the Employee, or in any way diminish the Employee's rights as an employee of the Company, whether existing now or hereafter, under any employee benefit plan, program, or arrangement or other contract or agreement of the Company providing benefits to the Employee. 13. Survival. Neither the expiration or the termination of the term of -------- the Employee's employment hereunder shall impair the rights or obligations of either party hereto which shall have accrued hereunder prior to such expiration or termination. 14. Notices. All notices and other communications required or permitted ------- to be given hereunder by either party hereto shall be in writing and shall be given by hand delivery or by first class registered or certified United States mail, postage prepaid, return receipt requested, to the party for which intended at the following addresses (or at such other addresses as shall be specified by the parties by like notice): -6- If to the Company, at: The Wiser Oil Company 8115 Preston Road, Suite 400 Dallas, Texas 75225-6311 Attention: President If to the Employee, at: George K. Hickox, Jr. 1629 Locust Street Philadelphia, Pennsylvania 19103 All such notices and other communications shall be effective only upon receipt by the addressee. 15. Entire Agreement. This Agreement constitutes the entire agreement ---------------- between the parties hereto concerning the subject matter hereof and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to such subject matter. 16. Binding Effect; Assignment. This Agreement shall be binding upon and -------------------------- inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors, and permitted assigns; provided, however, that the neither the Company nor the Employee shall assign or otherwise transfer this Agreement or any of the respective rights or obligations hereunder without the prior written consent of the other party hereto (except that any rights that the Employee may have hereunder at the time of his death may be transferred by will or pursuant to the laws of descent and distribution and the Company may assign this Agreement to any successor to all or substantially all its business and assets without the consent of the Employee). 17. Amendment. This Agreement may not be modified or amended in any --------- respect except by an instrument in writing signed by the party against whom such modification or amendment is sought to be enforced. 18. Waiver. Any term or condition of this Agreement may be waived at any ------ time by the party hereto which is entitled to have the benefit thereof, but such waiver shall only be effective if evidenced by a writing signed by such party, and a waiver on one occasion shall not be deemed to be a waiver of the same or any other type of breach on a future occasion. No failure or delay by a party hereto in exercising any right or power hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right or power. 19. Authority. No person, other than pursuant to a resolution of the --------- Board, shall have authority on behalf of the Company to agree to modify, amend, or waive any provision of this Agreement or anything in reference thereto. -7- 20. Severability. If any provision of this Agreement is held to be ------------ unenforceable, (a) this Agreement shall be considered divisible, (b) such provision shall be deemed inoperative to the extent it is deemed unenforceable, and (c) in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. 21. Governing Law. This Agreement shall be governed by and construed and ------------- enforced in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of laws thereof. 22. Injunctive Relief. In recognition of the fact that a breach by the ----------------- Employee of any of the provisions of Paragraph 9 will cause irreparable damage to the Company for which monetary damages alone will not constitute an adequate remedy, the Company shall be entitled as a matter of right to obtain a restraining order, an injunction, an order of specific performance, or other equitable or extraordinary relief from any court of competent jurisdiction restraining any further violation of such provisions by the Employee or requiring him to perform his obligations hereunder. Such right to equitable or extraordinary relief shall not be exclusive but shall be in addition to all other rights and remedies to which the Company may be entitled at law or in equity, including without limitation the right to recover monetary damages for the breach by the Employee of any of the provisions of this Agreement. 23. Counterparts. This Agreement may be executed by the parties hereto in ------------ any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement. -8- IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer, and the Employee has executed this Agreement, as of the date first set forth above. "COMPANY" THE WISER OIL COMPANY By: /s/ Andrew J. Shoup, Jr. ----------------------------------- Name: Andrew J. Shoup, Jr. ------------------------------ Title: President ----------------------------- "EMPLOYEE" /s/ George K. Hickox, Jr. -------------------------------------- George K. Hickox, Jr. -9- EX-27 7 0007.txt FINANCIAL DATA SCHEDULE
5 1,000 3-MOS 6-MOS DEC-31-2000 DEC-31-2000 APR-01-2000 JAN-01-2000 JUN-30-2000 JUN-30-2000 31,798 31,798 0 0 11,652 11,652 0 0 332 332 44,654 44,654 288,243 288,243 127,315 127,315 209,238 209,238 15,479 15,479 124,563 124,563 0 0 6,000 6,000 91 91 63,105 63,105 209,238 209,238 16,200 30,878 16,859 32,024 6,139 11,418 18,182 33,589 0 0 0 0 3,176 6,344 (1,323) (1,565) 0 0 (1,323) (1,565) 0 0 0 0 0 0 (1,323) (1,565) (.16) (.19) (.16) (.19)
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