-----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, OyDVF7F+rHBST4wH549zqcTAyP/KzpYK5lLnnRhFxTeh5OQqn3VjnqxD2zahwS67 t5TK+0z/hbG/FYVpIINOqQ== 0001072613-02-000869.txt : 20020516 0001072613-02-000869.hdr.sgml : 20020516 20020516171543 ACCESSION NUMBER: 0001072613-02-000869 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020502 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALWEB CORP CENTRAL INDEX KEY: 0001088413 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 751984048 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-26331 FILM NUMBER: 02655392 BUSINESS ADDRESS: STREET 1: 1607 W COMMERCE ST CITY: DALLAS STATE: TX ZIP: 75208 BUSINESS PHONE: 2146988330 MAIL ADDRESS: STREET 1: 1607 W. COMMERCE ST CITY: DALLAS STATE: TX ZIP: 75208 8-K 1 form8-k_11276.txt PALWEB CORPORATION FORM 8-K DATED 05/02/2002 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): MAY 2, 2002 PALWEB CORPORATION (Exact name of registrant as specified in its charter) OKLAHOMA 000-26331 75-1984048 (State or other jurisdiction (Commission File No.) (I.R.S. Employer of incorporation) Identification No.) 1607 WEST COMMERCE STREET, DALLAS, TEXAS 75208 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (214) 698-8330 Former name or former address, if changed since last report: NOT APPLICABLE ================================================================================ ITEM 5. OTHER EVENTS On April 22, 2002, the shareholders of PalWeb Corporation, a Delaware corporation ("PalWeb Delaware"), approved a plan of reorganization having the effect of changing PalWeb Delaware's state of incorporation from Delaware to Oklahoma (the "Reincorporation"). The Reincorporation was accomplished on May 2, 2002, by merging PalWeb Delaware into PalWeb Oklahoma Corporation, an Oklahoma corporation ("PalWeb Oklahoma"), a newly-formed, wholly-owned subsidiary of PalWeb Delaware (the "Merger"). PalWeb Oklahoma was then renamed PalWeb Corporation (the "Company") and continued conducting business as the successor to PalWeb Delaware. The Board of Directors of the Company believes that the best interests of the Company and its shareholders will be served by changing the Company's state of incorporation from Delaware to Oklahoma. The Merger did not result in any change in the number of shares owned or percentage of ownership of any shareholder of the Company. Upon completion of the Merger, each outstanding share of PalWeb Delaware's Common Stock and each share of PalWeb Delaware's Convertible Preferred Stock were automatically converted into one share of Common Stock, par value $0.0001 per share, of PalWeb Oklahoma. Each outstanding share of PalWeb Delaware's Series 2001 12 % Cumulative Convertible Senior Preferred Stock ("2001 Preferred Stock") was automatically converted into one share of 2001 Preferred Stock of PalWeb Oklahoma with identical terms. The Company's Common Stock continues to be traded on the National Association of Securities Dealers Automatic Quotation over-the-counter bulletin board system without interruption and under the same symbol ("PAEB"). The Reincorporation and Merger did not result in any change in the business, management, location of the principal executive offices, assets, liabilities or shareholders' equity of the Company. The Company continues to possess all the assets and is responsible for all the liabilities of PalWeb Delaware. Since the Oklahoma General Corporation Act is substantially equivalent to the Delaware General Corporation Law, the Reincorporation did not represent a material change to the laws governing the Company and its shareholders. As a result of the Reincorporation, the Company is, however, operating under a new certificate of incorporation and bylaws which are filed as exhibits to this report. PalWeb Delaware's stock option plan is being continued by the Company under the same terms and conditions. The Company's new certificate of incorporation includes provisions that: 1. effected an increase in the authorized Common Stock of the Company from 250,000,000 to 5,000,000,000 shares; 2. decreased the par value of the Company's Common Stock from $0.10 to $0.0001 per share; 2 3. recognized as a separate series of preferred stock the 2001 Preferred Stock with 750,000 shares outstanding and authorized; and 4. authorized 20 million additional shares of preferred stock that may be issued from time to time and on such terms as the Board of Directors may determine without action by the shareholders. The new certificate of incorporation also includes provisions that authorize the Board of Directors to effect a reverse split of all outstanding shares of the Common Stock of the Company at an exchange ratio of not more than 1-for-100. The Board of Directors has the sole discretion to elect, as it determines to be in the best interests of the Company and its shareholders, whether or not to effect a reverse stock split, and if so, at what exchange ratio, at any time in the future when the Board of Directors determines that a reverse stock split is necessary or in the best interest of the Company and its shareholders. A detailed discussion of the Reincorporation and Merger, including the reasons therefor, was included in PalWeb Delaware's Information Statement filed on March 22, 2002, in connection with PalWeb Delaware's April 22, 2002 annual meeting. At the effective time of the Merger, the Common Stock, par value $0.10 per share, of PalWeb Delaware was registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Act"). By operation of Rule 12g-3(a) of the Exchange Act regulations, the Common Stock, par value $0.0001 per share, of the Company as the successor issuer shall be deemed registered under the same Section 12(g) of the Act. Description of Common Stock - --------------------------- Holders of the Company's Common Stock are entitled to one vote per share on all matters submitted to shareholders, subject to the rights granted to holders of the Company's 2001 Preferred Stock as discussed below. Holders of Common Stock have no cumulative voting rights. Consequently, the holders of more than 50% of the shares of Common Stock voting for the election of directors can elect all of the directors to be elected by holders of Common Stock, and, in such event, the holders of the remaining shares will not be able to elect any person to the Board of Directors. Holders of Common Stock do not have any preemptive rights for the purchase of additional shares of any class of the Company's capital stock or other subscription rights. The Common Stock carries no conversion rights and is not subject to redemption or to any sinking fund provisions. Holders of Common Stock are entitled to receive and to share ratably in such dividends as may be declared by the Board of Directors out of funds legally available therefor, subject to the prior rights of holders of any outstanding series of preferred stock, 3 which at this time consist of such rights granted to holders of 2001 Preferred Stock as discussed below. In the event of dissolution or winding up of the affairs of the Company, holders of Common Stock are entitled to share ratably in all assets remaining after payments to all creditors and payments required to be made, if any, with respect to any outstanding shares of any series of preferred stock. The Board of Directors may authorize the issuance of authorized shares of Common Stock without shareholder approval to such persons and for such consideration as the Board may determine. The rights of the holders of Common Stock are subject to the prior rights and preferences, if any, of any preferred stock which may be issued in the future. The Board of Directors has the authority to issue shares of preferred stock in series from time to time for such consideration as the Board may determine, and has the further authority to establish the number of shares to be included in each series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. Reference is made to the Company's certificate of incorporation and bylaws, as well as applicable provisions of the Oklahoma General Corporation Act, for a more complete description concerning the rights and liabilities of holders of the Company's Common Stock. Description of Warrants and 2001 Preferred Stock - ------------------------------------------------ As of May 2, 2002, the Company had issued and outstanding 750,000 shares of 2001 Preferred Stock and Warrants to purchase up to 225,000,000 shares of Common Stock. Each share of the 2001 Preferred Stock has a stated value of $10 per share and is convertible at any time into 350 shares of Common Stock of the Company or a total of 262,500,000 shares, which is an effective conversion price of $0.0286 per share. Holders of the 2001 Preferred Stock are entitled to cumulative dividends of 12% per annum, $1.20 per share, or a total of $900,000. So long as any shares of the 2001 Preferred Stock shall remain outstanding, no dividends (other than a dividend payable in Common Stock) may be declared or paid upon any class of stock or series thereof ranking junior to the 2001 Preferred Stock in the payment of dividends, nor may any shares of any class of stock or series thereof ranking junior to the 2001 Preferred Stock be redeemed or purchased by the Company or any subsidiary, nor may any monies be paid to or made available for a sinking fund for the redemption or purchase of any shares of any class of stock or series thereof ranking junior to the 2001 Preferred Stock, unless in each instance full cumulative cash dividends on all outstanding shares of the 2001 Preferred Stock payable on all previous dividend payment dates and the cash dividend for the then current quarterly dividend period shall have been paid or declared and sufficient funds set apart therefor. 4 Holders of the 2001 Preferred Stock do not have any voting rights, except in the event that the Company fails to declare and pay dividends on the 2001 Preferred Stock at the required rate for two consecutive dividend payment dates. In such event, the holders of 2001 Preferred Stock will be entitled to vote as a separate group for election of additional members of the Board of Directors (not less than 60% of the Board of Directors), which voting rights may be exercised at the next annual meeting of shareholders or at any special meeting of shareholders held in lieu thereof after the fourth such payment date at which directors are elected and at which the holders of not less than a majority of the shares of the 2001 Preferred Stock, then outstanding, are present in person or by proxy. Such voting rights will remain vested until all accrued and unpaid dividends on the 2001 Preferred Stock are declared and paid. Upon the liquidation or dissolution of the Company, holders of the 2001 Preferred Stock shall be entitled to receive payment of the stated value per share held by them plus any accrued and unpaid dividends and interest thereon to the date of final distribution to such holders before any distribution of assets is made to holders of Common Stock or any series of preferred stock ranking junior to the 2001 Preferred Stock in distribution of assets upon liquidation. The 2001 Preferred Stock is not subject to redemption by the Company and is not subject to any sinking fund for the retirement or redemption of such shares. The number of authorized shares of 2001 Preferred Stock may be increased or decreased by resolutions duly adopted by the Board of Directors and the filing of a certificate pursuant to the provisions of the Oklahoma General Corporation Act stating that such increase or decrease has been so authorized. The Warrants are exercisable at a price of $0.10 per share for a period of four years from the date of issuance, subject to acceleration of the expiration date for three separate 25% tranches of the total Warrants, if the Company's Common Stock trades at prices of $0.15, $0.20 and $0.25 per share, respectively. The Company and Westgate Investments, L.P. ("Westgate"), entered into a Shareholders and Voting Agreement dated January 4, 2002, as amended on January 21, 2002 (the "Shareholders Agreement"). As of May 2, 2002, Westgate held 573,698 shares of 2001 Preferred Stock and Warrants to purchase 172,109,340 shares of Common Stock. Pursuant to the Shareholders Agreement, the parties agreed, among other things, that Westgate shall have the right to: o designate for nomination by management for election to the Board of Directors at least two-thirds of the members of the Board for as long as Westgate holds at least 5% of the 2001 Preferred Stock or Common Stock of the Company; o designate one of the Westgate designees for appointment on every committee of the Board of Directors of the Company for as long as Westgate continues to have one or more designees serving on the Board of Directors of the Company; and 5 o routinely consult with, and advise, the management of the Company regarding the Company's operations. In addition, the Shareholders Agreement provides that the following actions may not be taken without the prior approval of 60% of the members of the Board of Directors of the Company: o amend the certificate of incorporation or bylaws of the Company; o consolidate with, or merge with or into, any entity, except for certain mergers of wholly owned subsidiaries of the Company with or into the Company; o make certain sales, leases, transfers or dispositions of the properties or assets of the Company; o change the general nature of the business of the Company; o make certain acquisitions or issuances of shares of the Company; o enter into certain commitments or obligations for the grant of options, warrants or rights to acquire or issue shares of the Company; o incur any funded indebtedness, except for indebtedness incurred as contemplated by an annual budget, incurred under the Company's primary credit facility, or in an aggregate amount not exceeding $250,000; o make any investment by the Company in any entity other than a wholly-owned subsidiary in an amount exceeding $100,000; o pay any dividends on shares of Common Stock of the Company; o file any petition seeking to reorganize the Company pursuant to, or to obtain relief under, any federal or state bankruptcy or insolvency law; o dissolve, liquidate or wind-up of the affairs of the Company; o appoint or dismiss the chief executive officer, the president, the chief operating officer, the chief financial officer or any senior vice president of the Company; or o make any capital expenditures not approved in an annual budget in an aggregate amount exceeding $250,000 in any fiscal year. Reference is made to the Company's certificate of incorporation and bylaws, as well as applicable provisions of the Oklahoma General Corporation Act, for a more complete description concerning the rights and liabilities of holders of the 2001 Preferred Stock and Warrants. 6 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired: Not applicable. (b) Pro forma financial information: Not applicable. (c) Exhibits: The following exhibits are filed as part of this report: Exhibit No. Description - ----------- ----------- 2.1 Certificate of Ownership and Merger Merging PalWeb Corporation, a Delaware Corporation, into PalWeb Oklahoma Corporation, an Oklahoma Corporation filed with the Delaware Secretary of State on May 2, 2002. 2.2 Certificate of Ownership and Merger Merging PalWeb Corporation, a Delaware Corporation, into PalWeb Oklahoma Corporation, an Oklahoma Corporation filed with the Oklahoma Secretary of State on May 2, 2002. 3.1 Certificate of Incorporation of PalWeb Oklahoma Corporation filed with the Oklahoma Secretary of State on May 2, 2002. 3.2 Bylaws of PalWeb Oklahoma Corporation as adopted on May 2, 2002. Instruments Defining the Rights of Security Holders: 4.1 Certificate of Incorporation of PalWeb Oklahoma Corporation filed with the Oklahoma Secretary of State on May 2, 2002 (included in Exhibit 3.1). 4.2 Securities Purchase Agreement by and among PalWeb Corporation and certain purchasers dated January 4, 2002 (incorporated herein by reference to Exhibit 10.7 of PalWeb Corporation's Form 10-QSB for the Quarterly Period Ended November 30, 2001, filed on January 14, 2002). 7 4.3 Shareholders and Voting Agreement by and among PalWeb Corporation and certain shareholders dated January 4, 2002 (incorporated herein by reference to Exhibit 10.8 of PalWeb Corporation's Form 10-QSB for the Quarterly Period Ended November 30, 2001, filed on January 14, 2002). 4.4 Form of Common Stock Purchase Warrant used in connection with Securities Purchase Agreement by and among PalWeb Corporation and certain purchasers dated January 4, 2002 (incorporated herein by reference to Exhibit 10.9 of PalWeb Corporation's Form 10-QSB for the Quarterly Period Ended November 30, 2001, filed on January 14, 2002). 4.5 Amendment No. 1 to Securities Purchase Agreement by and among PalWeb Corporation and certain purchasers dated January 21, 2002 (incorporated herein by reference to Exhibit 10.1 of PalWeb Corporation's Form 10-QSB for the Quarterly Period Ended February 28, 2002, filed on April 12, 2002). 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. PALWEB CORPORATION By: /s/ Paul A. Kruger ------------------------------------ Date: May 14, 2002 Paul A. Kruger Chairman of the Board and President 8 EX-2.1 3 ex2-1_11276.txt CERTIFICATE OF OWNERSHIP EXHIBIT 2.1 ----------- CERTIFICATE OF OWNERSHIP AND MERGER MERGING PALWEB CORPORATION A DELAWARE CORPORATION INTO PALWEB OKLAHOMA CORPORATION AN OKLAHOMA CORPORATION (Pursuant to Section 253 of the Delaware General Corporation Law) TO THE SECRETARY OF STATE OF THE STATE OF DELAWARE: PalWeb Corporation, a corporation organized and existing under and by virtue of the laws of the State of Delaware (the "Corporation"), hereby certifies as follows: FIRST: The Corporation was organized pursuant to the provisions of the General Corporation Law of the State of Delaware on February 24, 1969. SECOND: The Corporation owns all of the outstanding shares of capital stock of PalWeb Oklahoma Corporation, an Oklahoma corporation ("New PalWeb"), a corporation organized pursuant to the provisions of Oklahoma law on May 2, 2002. THIRD: The Corporation, by the following resolutions of its Board of Directors, duly adopted by unanimous written consent of the members thereof dated March 15, 2002, filed with the minutes of the Board pursuant to Section 141(f) of the Delaware General Corporation Law, determined to merge itself into New PalWeb on the conditions set forth in the following resolutions: RESOLVED, that upon the approval of the stockholders of the Corporation entitled to vote, the Corporation shall merge itself with and into PalWeb Oklahoma Corporation, a wholly-owned subsidiary corporation to be organized under Oklahoma law ("New PalWeb"), and New PalWeb shall be the surviving corporation, and shall succeed to all the assets and assume all of the obligations of the Corporation (the "Merger"); and FURTHER RESOLVED, that upon the filing with the Secretary of State of the States of Oklahoma and Delaware of certificates of ownership and merger and the occurrence of the other conditions to the effectiveness of the Merger ("Effective Time") (i) each share of the Common Stock, par value $0.10 per share, of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable common stock, par value $0.0001 per share of New PalWeb ("New PalWeb Common Stock"); (ii) each share of Convertible Preferred Stock, par value $0.0001 per share, of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable New PalWeb Common Stock; (iii) each share of Series 2001 12% Cumulative Convertible Senior Preferred Stock ("2001 Preferred Stock") of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable Series 2001 12% Cumulative Convertible Senior Preferred Stock of New PalWeb ("New PalWeb 2001 Preferred Stock"); and (iv) the 100 shares of common stock, par value $0.0001 per share, of New PalWeb which shall be outstanding and owned of record by the Corporation immediately prior to the Effective Time, shall, at the Effective Time, automatically be cancelled and resume the status of authorized but unissued stock; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of Common Stock of the Corporation may (but shall not be required to) surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of the New PalWeb Common Stock into which the shares of the Corporation's Common Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger, and the officers of the Corporation shall instruct the Corporation's transfer agent to alter, as necessary, the Corporation's remaining inventory of printed certificates to permit such certificates to be conformed for use after the Effective Time; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of Convertible Preferred Stock of the Corporation shall be required to surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of New PalWeb Common Stock into which the shares of the Corporation's Convertible Preferred Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of 2001 Preferred Stock of the Corporation may (but shall not be required to) surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of New PalWeb 2001 Preferred Stock into which the shares of the Corporation's 2001 Preferred Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger, and the officers of the Corporation shall instruct the Corporation's transfer agent to alter, as necessary, the Corporation's remaining inventory of printed certificates to permit such certificates to be conformed for use after the Effective Time; and FURTHER RESOLVED, that upon the Merger becoming effective, the Certificate of Incorporation and Bylaws of New PalWeb shall be the Certificate of Incorporation and Bylaws of the surviving corporation; and FURTHER RESOLVED, that upon the Merger becoming effective, New PalWeb shall change its name to PalWeb Corporation, and upon such date, the name of the Corporation shall be so changed in accordance with Section 1083(B) of the Oklahoma General Corporation Act; and FURTHER RESOLVED, that the Merger be submitted to the stockholders of this Corporation and that upon receiving the approval of the holders of a majority of the outstanding Common Stock and Convertible Preferred Stock of the Corporation, the Merger shall be approved; and FURTHER RESOLVED, that at any time prior to the effectiveness of the Merger, whether before or after approval of the stockholders of the Corporation, the terms of the Merger may be amended in any manner as may be determined in the judgment of the Board of Directors of the Corporation to be necessary, desirable or expedient in order to facilitate the purposes and intent of the Merger, provided that no amendment may be made to the extent that Section 251(d) of the Delaware General Corporation Law prohibits such amendment without the approval of the stockholders of the Corporation; and FURTHER RESOLVED, at any time before the Effective Time, the Merger may be terminated and abandoned by the Board of Directors of the Corporation notwithstanding the approval by the stockholders of the Corporation; and FURTHER RESOLVED, that the Chairman of the Board, Chief Executive Officer, President or any Vice President of the Corporation be, and each of them hereby is, authorized and directed to make and execute, and the Secretary or Assistant Secretary be, and each of them hereby is, authorized and directed to attest, if necessary, certificates of ownership and merger setting forth a copy of these Resolutions providing for the merger of the Corporation into New PalWeb, to cause the same to be filed with the Secretary of State of the States of Delaware and Oklahoma, to cause New PalWeb to be organized and to succeed to the assets and assume all of the liabilities of the Corporation, and to do all other acts and things, whether within or without the States of Delaware and Oklahoma, which may be in any way necessary or appropriate to effect the proposed Merger. FOURTH: That this Merger has been approved by the holders of a majority of the outstanding Common Stock and Convertible Preferred Stock of this Corporation, being the only classes of outstanding capital stock of the Corporation entitled to vote, at a meeting thereof duly called and held in accordance with Sections 253(a) and 211 of the Delaware General Corporation Law. FIFTH. New PalWeb, the surviving corporation, hereby agrees that it may be served with process in the State of Delaware in any proceeding for enforcement of any obligation of the Corporation, as well as for enforcement of any obligation of New PalWeb, arising from the Merger, including any suit or other proceedings to enforce the right, if any, of any stockholders as determined in appraisal proceedings pursuant to Section 262 of the Delaware General Corporation Law, and hereby irrevocably appoints the Secretary of State of Delaware as its agent to accept service of process in any such suit or other proceedings and agrees that service of any such process may be made by personally delivering to and leaving with such Secretary of State of Delaware duplicate copies of such process, and hereby authorizes the Secretary of State of Delaware to send forthwith by certified mail one of such duplicate copies of such process addressed to PalWeb Oklahoma Corporation at 1607 West Commerce Street, Dallas, Texas, 75208, unless such surviving corporation shall hereafter designate in writing to such Secretary of State of Delaware a different address for such process, in which case the duplicate copy of such process shall be mailed to the last address so designated. IN WITNESS WHEREOF, the Corporation, has caused this Certificate to be signed by its President and attested to by its Secretary, this 2nd day of May, 2002, to be effective upon filing with the Secretary of State. PALWEB CORPORATION, By /s/ Paul A. Kruger ------------------------------ Paul A. Kruger, Chairman of the Board ATTEST: /s/ Julie Barksdale - ------------------------------ Julie Barksdale, Secretary EX-2.2 4 ex2-2_11276.txt CERTIFICATE OF OWNERSHIP EXHIBIT 2.2 ----------- CERTIFICATE OF OWNERSHIP AND MERGER MERGING PALWEB CORPORATION A DELAWARE CORPORATION INTO PALWEB OKLAHOMA CORPORATION AN OKLAHOMA CORPORATION (Pursuant to Section 1083 of the Oklahoma General Corporation Act) TO THE SECRETARY OF STATE OF THE STATE OF DELAWARE: PalWeb Corporation, a corporation organized and existing under and by virtue of the laws of the State of Delaware (the "Corporation"), hereby certifies as follows: FIRST: The Corporation was organized pursuant to the provisions of the General Corporation Law of the State of Delaware on February 24, 1969. SECOND: The Corporation owns all of the outstanding shares of capital stock of PalWeb Oklahoma Corporation, an Oklahoma corporation ("New PalWeb"), a corporation organized pursuant to the provisions of Oklahoma law on May 2, 2002. THIRD: The Corporation, by the following resolutions of its Board of Directors, duly adopted by unanimous written consent of the members thereof dated March 15, 2002, filed with the minutes of the Board pursuant to Section 141(f) of the Delaware General Corporation Law, determined to merge itself into New PalWeb on the conditions set forth in the following resolutions: RESOLVED, that upon the approval of the stockholders of the Corporation entitled to vote, the Corporation shall merge itself with and into PalWeb Oklahoma Corporation, a wholly-owned subsidiary corporation to be organized under Oklahoma law ("New PalWeb"), and New PalWeb shall be the surviving corporation, and shall succeed to all the assets and assume all of the obligations of the Corporation (the "Merger"); and FURTHER RESOLVED, that upon the filing with the Secretary of State of the States of Oklahoma and Delaware of certificates of ownership and merger and the occurrence of the other conditions to the effectiveness of the Merger ("Effective Time") (i) each share of the Common Stock, par value $0.10 per share, of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable common stock, par value $0.0001 per share of New PalWeb ("New PalWeb Common Stock"); (ii) each share of Convertible Preferred Stock, par value $0.0001 per share, of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable New PalWeb Common Stock; (iii) each share of Series 2001 12% Cumulative Convertible Senior Preferred Stock ("2001 Preferred Stock") of the Corporation which shall be issued and outstanding immediately prior to the Effective Time, and all rights in respect thereof, shall, on the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, New PalWeb, or any officer thereof, automatically become and be converted into one (1) share of fully paid and nonassesable Series 2001 12% Cumulative Convertible Senior Preferred Stock of New PalWeb ("New PalWeb 2001 Preferred Stock"); and (iv) the 100 shares of common stock, par value $0.0001 per share, of New PalWeb which shall be outstanding and owned of record by the Corporation immediately prior to the Effective Time, shall, at the Effective Time, automatically be cancelled and resume the status of authorized but unissued stock; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of Common Stock of the Corporation may (but shall not be required to) surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of the New PalWeb Common Stock into which the shares of the Corporation's Common Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger, and the officers of the Corporation shall instruct the Corporation's transfer agent to alter, as necessary, the Corporation's remaining inventory of printed certificates to permit such certificates to be conformed for use after the Effective Time; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of Convertible Preferred Stock of the Corporation shall be required to surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of New PalWeb Common Stock into which the shares of the Corporation's Convertible Preferred Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger; and FURTHER RESOLVED, after the Effective Time, each holder of a stock certificate which prior thereto represented shares of 2001 Preferred Stock of the Corporation may (but shall not be required to) surrender the same to New PalWeb's transfer agent and shall be entitled upon such surrender to receive in exchange therefor a certificate representing the number of shares of New PalWeb 2001 Preferred Stock into which the shares of the Corporation's 2001 Preferred Stock theretofore represented by the certificate or certificates so surrendered shall have been converted in the Merger, and the officers of the Corporation shall instruct the Corporation's transfer agent to alter, as necessary, the Corporation's remaining inventory of printed certificates to permit such certificates to be conformed for use after the Effective Time; and FURTHER RESOLVED, that upon the Merger becoming effective, the Certificate of Incorporation and Bylaws of New PalWeb shall be the Certificate of Incorporation and Bylaws of the surviving corporation; and FURTHER RESOLVED, that upon the Merger becoming effective, New PalWeb shall change its name to PalWeb Corporation, and upon such date, the name of the Corporation shall be so changed in accordance with Section 1083(B) of the Oklahoma General Corporation Act; and FURTHER RESOLVED, that the Merger be submitted to the stockholders of this Corporation and that upon receiving the approval of the holders of a majority of the outstanding Common Stock and Convertible Preferred Stock of the Corporation, the Merger shall be approved; and FURTHER RESOLVED, that at any time prior to the effectiveness of the Merger, whether before or after approval of the stockholders of the Corporation, the terms of the Merger may be amended in any manner as may be determined in the judgment of the Board of Directors of the Corporation to be necessary, desirable or expedient in order to facilitate the purposes and intent of the Merger, provided that no amendment may be made to the extent that Section 251(d) of the Delaware General Corporation Law prohibits such amendment without the approval of the stockholders of the Corporation; and FURTHER RESOLVED, at any time before the Effective Time, the Merger may be terminated and abandoned by the Board of Directors of the Corporation notwithstanding the approval by the stockholders of the Corporation; and FURTHER RESOLVED, that the Chairman of the Board, Chief Executive Officer, President or any Vice President of the Corporation be, and each of them hereby is, authorized and directed to make and execute, and the Secretary or Assistant Secretary be, and each of them hereby is, authorized and directed to attest, if necessary, certificates of ownership and merger setting forth a copy of these Resolutions providing for the merger of the Corporation into New PalWeb, to cause the same to be filed with the Secretary of State of the States of Delaware and Oklahoma, to cause New PalWeb to be organized and to succeed to the assets and assume all of the liabilities of the Corporation, and to do all other acts and things, whether within or without the States of Delaware and Oklahoma, which may be in any way necessary or appropriate to effect the proposed Merger. FOURTH: That this Merger has been approved by the holders of a majority of the outstanding Common Stock and Convertible Preferred Stock of this Corporation, being the only classes of outstanding capital stock of the Corporation entitled to vote, at a meeting thereof duly called and held in accordance with Sections 253(a) and 211 of the Delaware General Corporation Law. IN WITNESS WHEREOF, the Corporation, has caused this Certificate to be signed by its President and attested to by its Secretary, this 2nd day of May , 2002, to be effective upon filing with the Oklahoma Secretary of State. PalWeb Oklahoma Corporation, An Oklahoma Corporation By: /s/ Paul A. Kruger ------------------------------------ Paul A. Kruger, President ATTEST: /s/ Julie Barksdale - ------------------------------ Julie Barksdale, Secretary EX-3.1 5 ex3-1_11276.txt CERTIFICATE OF INCORPORATION EXHIBIT 3.1 ----------- CERTIFICATE OF INCORPORATION OF PALWEB OKLAHOMA CORPORATION FIRST. The name of the Corporation is PalWeb Oklahoma Corporation. SECOND. The address of its registered office in the State of Oklahoma is Crowe & Dunlevy, 1800 Mid-America Tower, 20 North Broadway, Oklahoma City, Oklahoma 73102-8273. The name of its registered agent at such address is Michael M. Stewart. THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Oklahoma General Corporation Act. FOURTH. The total number of shares of capital stock which the Corporation shall have authority to issue is 5,020,750,000, with a par value of $0.0001 per share, divided as follows: 5,000,000,000 shares of Common Stock; and 20,750,000 shares of Preferred Stock, of which 750,000 shares shall be designated as Series 2001 12% Cumulative Convertible Senior Preferred Stock ("2001 Preferred Stock") The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article FOURTH, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of Oklahoma, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (1) The number of shares constituting that series and the distinctive designation of that series; (2) The dividend rate on the shares of that series, whether dividends shall be cumulative, and, if so, from which date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series; (3) Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (4) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine; (5) Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (6) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; (7) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series; and (8) Any other relative rights, preferences and limitations of that series. The Board of Directors shall be authorized, subject to limitations prescribed by law and this Article FOURTH and without any approval of the holders of the shares of Common Stock then outstanding, to reduce the number of shares of Common Stock outstanding by declaring and effecting a reverse split of the Corporation's Common Stock ("Reverse Stock Split") at an exchange ratio of not more than 1-for-100 (the "Maximum Reverse Split Ratio"). The Board of Directors shall have the sole discretion to determine whether, and at what effective time and exact ratio, subject to the Maximum Reverse Split Ratio, a Reverse Stock Split shall be effected. The Board shall give notice of the time and exact ratio of the Reverse Stock Split as may be required by law. If a Reverse Stock Split is effected by the Board of Directors, at the effective time thereof, without any further action by the Corporation or the shareholders, the number of shares of Common Stock, par value $0.0001 per share, established by the Board, up to the Maximum Reverse Split Ratio of 100 shares, then issued and outstanding or reserved for issuance ("Old Common Stock"), shall be reclassified and changed into one fully paid and nonassessable share of Common Stock of the Corporation, par value $0.0001 per share ("Common Stock"). Shareholders who, at the effective time, would otherwise receive a fractional share of Common Stock in connection with such Reverse Stock Split will, instead of such fractional share, be issued one whole share. All shares of Old Common Stock held by a record holder will be aggregated for purposes of computing the number of shares of Old Common Stock subject to the Reverse Stock Split. The aggregate amount of the capital of the Corporation represented by the Old Common Stock at the effective time shall, to the extent of the par value of the Common Stock into which such shares are reclassified and converted in the Reverse Stock Split, become the amount of capital represented by the Common Stock issued in exchange therefor, and the remainder of the capital shall become surplus. Unless the Board of Directors determines otherwise, shareholders shall be required to exchange each certificate representing shares of Old Common Stock outstanding at the effective time of a Reverse Stock Split for certificates representing the number of shares of Common Stock into which such shares of Old Common Stock shall have been reclassified and converted in the Reverse Stock Split in such manner as the Board may determine. FIFTH. The terms of the 2001 Preferred Stock shall be as follows: (1) Priority; Number of Shares; Stated Value.Shares of 2001 Preferred Stock shall be prior to the Corporation's Common Stock with respect to the payment of dividends and the distribution of assets. The number of shares which shall constitute 2001 Preferred Stock shall be 750,000. The stated value of 2001 Preferred Stock shall be $10.00 per share. (2) Dividends. --------- (a) The quarterly cash dividend rate of 2001 Preferred Stock shall be $.30 on each outstanding share of such stock. Such preferential cash dividends shall be payable when and as declared by the Board of Directors, to the extent permitted by law, quarterly on the last day of March, June, September and December in each year (the "Dividend Payment Dates"). (b) All cash dividends payable shall accrue commencing as of the date of original issuance, and be cumulative. Interest at the rate of 12% per annum shall accrue and be payable with respect to any amounts of unpaid cumulative cash dividends on 2001 Preferred Stock. (c) So long as any shares of the 2001 Preferred Stock shall remain outstanding, no dividend whatsoever (other than a dividend payable in Common Stock) shall be declared or paid upon any class of stock or series thereof ranking junior to the 2001 Preferred Stock in the payment of dividends, nor shall any shares of any class of stock or series thereof ranking junior to the 2001 Preferred Stock in payment of dividends be redeemed or purchased by the Corporation or any subsidiary thereof, nor shall any monies be paid to or made available for a sinking fund for the redemption or purchase of any shares of any class of stock or series thereof ranking junior to the 2001 Preferred Stock in payment of dividends, unless in each instance full cumulative cash dividends on all outstanding shares of the 2001 Preferred Stock payable on all previous Dividend Payment Dates and the cash dividend on all outstanding shares of the 2001 Preferred Stock for the then current quarterly dividend period shall have been paid or declared and sufficient funds set apart therefor. (d) No dividend shall be declared or paid on any share or shares of any class of stock or series thereof ranking on a parity with the 2001 Preferred Stock in respect of payment of dividends for any dividend period unless there shall have been paid on all shares then outstanding of the 2001 Preferred Stock for the same dividend period and all prior periods. (3) Preference On Liquidation. ------------------------- (a) In the event of any voluntary or involuntary liquidation, distribution of assets (other than the payment of dividends), dissolution or winding up of the Corporation, before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Common Stock or of any other class of stock of the Corporation ranking junior to the 2001 Preferred Stock in distribution of assets upon liquidation, the holders of shares of the 2001 Preferred Stock shall each be entitled to receive payment of the stated value per share held by them plus any accrued and unpaid dividends and interest thereon to the date of final distribution to such holders, but they shall be entitled to no further payment with respect to such shares. (b) Nothing herein contained shall be deemed to give the Corporation the right of redemption of shares of the 2001 Preferred Stock. Neither the merger nor consolidation of the Corporation into or with any other corporation, nor the merger or consolidation of any other corporation into or with the Corporation, nor a sale, transfer or lease of all or any part of the assets of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Paragraph (3). (c) Written notice of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, stating a payment date and the place where the distributable amounts shall be payable and containing a statement of or reference to the conversion, if any, right set forth in Paragraph (5), shall be given, not less than thirty (30) days prior to the payment date stated therein, to the holders of record of the 2001 Preferred Stock. (d) No payment on account of such liquidation, dissolution or winding up of the affairs of the Corporation shall be made to the holders of any class or series of stock ranking on a parity with the 2001 Preferred Stock in respect to the distribution of assets, unless there shall likewise be paid at the same time to the holders of the 2001 Preferred Stock like proportionate distributive amounts, ratably, in proportion to the full distributive amounts to which they and the holders of such parity stock are respectively entitled with respect to such preferential distributions. (4) Voting Rights. ------------- The holders of the 2001 Preferred Stock shall not have any voting rights, except as set forth below or as otherwise are required by law: (a) If, and so often as, the Corporation shall fail to declare and pay dividends on the 2001 Preferred Stock at the time outstanding at the rate specified for such shares for two consecutive Dividend Payment Dates, the holders of the 2001 Preferred Stock will be entitled to vote as a separate voting group for election, as herein provided, of additional members of the Board of Directors of the Corporation (not less than 60% of the Board of Directors); provided, however, that the holders of the 2001 Preferred Stock shall exercise such special voting rights only at the next annual meeting of shareholders or any special meeting of shareholders held in lieu thereof after the fourth such payment date at which directors are elected and at which the holders of not less than a majority of the shares of the 2001 Preferred Stock, then outstanding, are present in person or by proxy; and provided further that the special class voting rights provided for in this subparagraph (a) shall remain vested in the holders of the 2001 Preferred Stock until all accrued and unpaid dividends on the 2001 Preferred Stock then outstanding shall have been declared and paid, whereupon the holders of the 2001 Preferred Stock shall be divested of their special voting rights in respect of subsequent elections of directors. In no event shall any voting rights be created with respect to any class or series of preferred stock of the Corporation which would be senior to the voting rights of the 2001 Preferred Stock. (b) At any meeting at which the holders of the shares of the 2001 Preferred Stock shall be entitled to elect directors, the holders of a majority of the outstanding shares of the 2001 Preferred Stock, present in person or by proxy, shall be sufficient to constitute a quorum, and the vote of the holders of a plurality of such shares so present at any such meeting at which there shall be such a quorum shall be sufficient to elect additional members having a majority (not less than 60%) of the Board of Directors members which such holders are entitled to elect as herein provided. Nothing in this subparagraph (b) shall prevent any change otherwise permitted in the total number of or classifications of directors of the Corporation nor require the resignation of any director elected other than pursuant to this subparagraph (b). Notwithstanding any classification of the other directors of the Corporation, any directors elected by the holders of the 2001 Preferred Stock shall be elected annually for terms expiring at the next succeeding annual meeting of shareholders, subject to the earlier termination pursuant to the provisions of subparagraph (c) below. (c) Upon any divesting of the special class of voting rights of the holders of the 2001 Preferred Stock in respect of elections of directors as provided in this Paragraph (4), the terms of office of all directors then in office elected by such holders shall terminate immediately. If the office of any director elected by such holders, voting as a class, becomes vacant by reason of death, resignation, removal from office or otherwise, the remaining director elected by such holders may elect a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. (d) No class or series of stock of the Corporation ranking senior to the 2001 Preferred Stock in distribution of assets upon liquidation or in payment of dividends shall be authorized and issued by the Corporation without the prior approval of the holders of a majority of the shares of 2001 Preferred Stock then outstanding. (5) Convertibility. -------------- Subject to subparagraph (5)(m) below, shares of 2001 Preferred Stock shall be convertible into Common Stock on the following terms and conditions: (a) Subject to and upon compliance with the provisions of this paragraph (5), the holder of any shares of 2001 Preferred Stock shall have the right, at such holder's option, at any time or from time to time before the close of business on the date next preceding the date fixed for redemption or repurchase of such shares of 2001 Preferred Stock (unless the Corporation shall default in payment due upon such redemption or repurchase), to convert any of such shares into such number of fully paid and nonassessable shares of Common Stock at the Conversion Price (as hereafter defined) therefor in effect at the time of conversion. (b) Each share of 2001 Preferred Stock shall be convertible into the number of shares of Common Stock that results from dividing the stated value per share of 2001 Preferred Stock by the Conversion Price, as hereinafter defined. The Conversion Price as of the original date of issuance of the 2001 Preferred Stock shall be $.0286 per share of Common Stock subject to adjustment from time to time as provided herein. (c) The holder of any shares of 2001 Preferred Stock may exercise the conversion right as to any part thereof by surrendering to the Corporation at the office of any transfer agent of the Corporation for 2001 Preferred Stock or at the principal office of the Corporation, the certificate or certificates for the shares to be converted, accompanied by written notice stating that the holder elects to convert all or a specified portion of the shares represented thereby and stating the name or names (with addresses) in which the certificate or certificates for the shares of Common Stock are to be issued. Subject to the provisions of this paragraph (5), every such notice of election to convert shall constitute a contract between the holder of such shares and the Corporation whereby such holder shall be deemed to subscribe for the number of shares of Common Stock which he will be entitled to receive upon such conversion and, in payment and satisfaction of such subscription, to surrender such shares of 2001 Preferred Stock and to release the Corporation from all obligations thereon and whereby the Corporation shall be deemed to agree that the surrender of such shares and the extinguishment of obligations thereon shall constitute full payment for Common Stock so subscribed for and to be issued upon such conversion. Conversion shall be deemed to have been effected on the date when delivery of such notice and such shares is made, and such date is referred to herein as the "Conversion Date." As promptly as practicable thereafter the Corporation shall issue and deliver, to or upon the written order of such holder, a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled and a check or cash with respect to any fractional interest in a share of Common Stock as provided in subparagraph (5)(j). The person in whose name the certificate or certificates for Common Stock are to be issued shall be deemed to have become a holder of record of such Common Stock on the applicable Conversion Date. Upon conversion of only a portion of the number of shares covered by a certificate representing shares of 2001 Preferred Stock surrendered for conversion, the Corporation shall issue and deliver to or upon the written order of the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate covering the number of shares of 2001 Preferred Stock representing the unconverted portion of the certificate so surrendered. (d) If the Corporation shall at any time or from time to time after the original issue date of 2001 Preferred Stock effect a subdivision or combination of any outstanding Common Stock, including a dividend payable in Common Stock, the Conversion Price then in effect immediately before such subdivision or combination shall be proportionately adjusted by multiplying the then effective Conversion Price by a fraction, (i) the numerator of which shall be the number of shares of Common Stock issued and outstanding immediately prior to such subdivision or combination, and (ii) the denominator of which shall be the number of shares of Common Stock issued and outstanding immediately after such subdivision or combination. The number of shares of Common Stock outstanding at any time shall, for the purposes of this Article FIFTH, include the number of shares of Common Stock into which any convertible securities of the Corporation, including 2001 Preferred Stock, may be converted, or for which any warrant, option or rights of the Corporation may be exercised or exchanged. Any adjustment under this subparagraph shall become effective at the close of business on the date the subdivision or combination becomes effective. Advance notice of events which would give rise to an adjustment in the Conversion Price shall be given to holders of 2001 Preferred Stock, but failure to give such notice shall not affect the validity or effectiveness of such event. No adjustment of the Conversion Price shall be made for the issuance of shares of Common Stock to employees pursuant to the Corporation's or any subsidiary's stock ownership, stock option or other benefit plan. No adjustment of the Conversion Price will be required to be made in any case until cumulative adjustments amount to one percent or more of the Conversion Price. The Corporation reserves the right to make such changes in the Conversion Price in addition to those required in the foregoing provisions as the Corporation in its discretion shall determine to be advisable in order that certain stock-related distributions hereafter made by the Corporation to its shareholders shall not be taxable. (e) In the event the Corporation at any time or from time to time after the original issue date of 2001 Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in (i) evidences of indebtedness of the Corporation, (ii) assets of the Corporation (other than cash dividends or distributions paid out of retained earnings), or (iii) securities of the Corporation other than Common Stock, then and in each such event provision shall be made so that the holders of 2001 Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of such evidences, assets or securities that they would have received had they held, on such record date, the maximum number of shares of Common Stock into which their 2001 Preferred Stock could then have been converted. The Corporation reserves the right to make such changes in the Conversion Price in addition to those required in the foregoing provisions as the Corporation in its discretion shall determine to be advisable in order that certain stock-related distributions hereafter made by the Corporation to its shareholders shall not be taxable. (f) If Common Stock issuable upon the conversion of 2001 Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this Paragraph (5)), then and in each such event the holders of 2001 Preferred Stock shall have the right thereafter to convert each such share into the kind and amounts of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the maximum number of shares of Common Stock into which such 2001 Preferred Stock could have been converted immediately prior to such reorganization, reclassification or change, all subject to further adjustment as provided herein. (g) If at any time or from time to time there shall be a capital reorganization of Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for in this Paragraph(6)) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all or substantially all the Corporation's properties and assets or capital stock to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that each holder of 2001 Preferred Stock shall thereafter be entitled to receive, upon conversion of 2001 Preferred Stock, the number of shares of stock or other securities or property of the Corporation, or of the successor corporation resulting from such merger of consolidation or sale as though conversion of 2001 Preferred Stock had occurred immediately prior to such event, provided such holder (x) is not the entity with which the Corporation consolidated or into which the Corporation merged or which merged into the Corporation or to which such sale or transfer was made, as the case may be, or an affiliate of such an entity and (y) failed to exercise its rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer. In any such case, appropriate adjustment shall be made in the application of the provisions of this Paragraph (5) with respect to the rights of the holders of 2001 Preferred Stock after the reorganization, merger, consolidation or sale to the end that the provisions of this Paragraph (5) (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of 2001 Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable. (h) 2001 Preferred Stock shall not be subject to any sinking fund for the purchase or redemption of shares. (i) In each case of an adjustment or readjustment of a Conversion Price for Common Stock issuable upon conversion of 2001 Preferred Stock, the Corporation, at its expense, shall cause independent certified public accountants of recognized standing selected by the Corporation (who shall be the independent certified public accountants then reviewing or auditing the books of the Corporation) to compute such adjustment or readjustment in accordance herewith and prepare a certificate showing such adjustment or readjustment, and shall provide a copy of such certificate to each registered holder of that 2001 Preferred Stock in the manner in which notices are to be given hereunder. The certificate shall set forth such adjustment or readjustment and show in detail the facts upon which such adjustment or readjustment is based. (j) No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of 2001 Preferred Stock. If more than one share of 2001 Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of 2001 Preferred Stock so surrendered. Instead of any fractional share of Common Stock which would otherwise be issuable upon conversion of any shares of 2001 Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of the then Current Market Price. The "Current Market Price" at any date shall mean the price per share of Common Stock on such date determined by the Board of Directors as provided below. The Current Market Price shall be the average of the daily closing prices per share of Common Stock for thirty (30) consecutive business days ending no more than fifteen (15) business days before the day in question (as adjusted for any stock dividend, split, combination or reclassification that took effect during such thirty (30) business day period). The closing price for each day shall be the last reported sales price regular way or, in case no such reported sales take place on such day, the average of the last reported bid and asked prices regular way, in either case on the principal national securities exchange on which Common Stock is listed or admitted to trading, or if not listed or admitted to trading on any national securities exchange, the average of the highest bid and the lowest asked prices quoted on The NASDAQ Stock Market; provided, however, that if Common Stock is not traded in such manner that the quotations referred to above are available for the period required hereunder, Current Market Price per share of Common Stock shall be deemed to be the fair value as determined by the Board of Directors, irrespective of any accounting treatment. (k) If the shares of 2001 Preferred Stock shall be called for redemption, the right to convert such shares shall terminate and expire at the close of business on the last business day preceding the redemption date. (l) The Corporation shall pay any tax in respect of the issue of stock certificates on conversion of shares of 2001 Preferred Stock. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of stock in a name other than that of the holder of the shares converted, and the Corporation shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of any such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. (m) The Corporation shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock deliverable upon the conversion of all outstanding shares of 2001 Preferred Stock and shall take all such action as may be required from time to time in order that it may validly and legally issue fully paid and nonassessable shares of Common Stock upon conversion of 2001 Preferred Stock. As a condition precedent to the taking of any action which would cause an adjustment to the Conversion Price for 2001 Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to authorize such number of shares of Common Stock as shall be issuable pursuant to such adjusted Conversion Price. (n) Shares of 2001 Preferred Stock converted shall not be reissued as shares of 2001 Preferred Stock, but shall assume the status of authorized but unissued shares of preferred stock of the Corporation. (o) If any shares of Common Stock to be reserved for the purpose of conversion of shares of 2001 Preferred Stock require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued or delivered upon conversion, then the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration or approval, as the case may be. If, and so long as, any shares of Common Stock into which the shares of 2001 Preferred Stock are then convertible are listed on any national securities exchange or The NASDAQ Stock Market, the Corporation will, if permitted by the rules of such exchange, list and keep listed on such exchange or The NASDAQ Stock Market, as the case may be, upon official notice of issuance, all shares of Common Stock issuable upon conversion. (p) All shares of Common Stock which may be issued upon conversion of the shares of 2001 Preferred Stock will upon issuance by the Corporation be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof and the Corporation shall take no action which will cause a contrary result. (6) Sinking Fund. ------------ No sinking fund will be established for the retirement or redemption of shares of the 2001 Preferred Stock. (7) Authorized Shares. ----------------- The number of authorized shares of 2001 Preferred Stock may be increased or decreased by resolutions duly adopted by the Board of Directors of the Corporation and the filing of a certificate pursuant to the provisions of the Oklahoma General Corporation Act stating that such increase or decrease has been so authorized. (8) General Provisions. ------------------ (a) Any notice required by the provisions of this Article FIFTH to be given to holders of record of the 2001 Preferred Stock shall be deemed given when personally delivered to such holder or five business days after the same has been deposited in the United States mail, certified or registered mail, return receipt requested, postage prepaid, and addressed to that holder of record at its address appearing on the books of the Corporation. (b) The Corporation shall not amend this Certificate of Incorporation or participate in any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, for the purpose of avoiding or seeking to avoid the observance or performance of any of the terms to be observed or performed under this Article FIFTH by the Corporation. SIXTH. The bylaws of the Corporation may be adopted, altered, amended or repealed by the Board of Directors. Election of directors need not be by written ballot unless the bylaws so provide. SEVENTH. (1) To the fullest extent that the Oklahoma General Corporation Act as it exists on the original date of filing of this Certificate of Incorporation with the Oklahoma Secretary of State ("Effective Date"), permits the limitation or elimination of the liability of directors, no director of this Corporation shall be liable to this Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. No amendment to or repeal of this Article SEVENTH shall apply to or have any effect on the liability or alleged liability of any director of this Corporation for or with respect to any acts or omissions of such director occurring prior to the time of such amendment or repeal. (2) If the Oklahoma General Corporation Act is amended after the Effective Date to further limit or eliminate liability of this Corporation's directors for breach of fiduciary duty, then a director of this Corporation shall not be liable for any such breach to the fullest extent permitted by the Oklahoma General Corporation Act as so amended. If the Oklahoma General Corporation Act is amended after the Effective Date to increase or expand liability of directors of this Corporation for breach of fiduciary duty, no such amendment shall apply to or have any effect on the liability or alleged liability of any director of this Corporation for or with respect to any acts or omissions of such director occurring prior to the time of such amendment or otherwise adversely affect any right or protection of a director of this Corporation existing at the time of such amendment. EIGHTH. (1) The Corporation shall indemnify, and may advance litigation expenses to, its officers and directors to the fullest extent permitted by the Oklahoma General Corporation Act, as the same exists or may hereafter be amended, and all other laws of the State of Oklahoma. (2) The Corporation may indemnify, and may advance litigation expenses to, employees and agents of the Corporation, and persons serving at the request of the Corporation as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or enterprise, to the fullest extent permitted by the Oklahoma General Corporation Act, as the same exists or may hereafter be amended, and all other laws of the State of Oklahoma. (3) No amendment to or repeal of this Article EIGHTH shall apply to or have any effect on the right of a person entitled to indemnification hereunder to receive such indemnification or on the ability of the Corporation to provide indemnification to any person to which indemnification is permitted hereunder for or with respect to any acts or omissions of any such person occurring prior to the time of such amendment or repeal. (4) By action of the Board of Directors, notwithstanding any interest of the directors in the action, the Corporation may purchase and maintain insurance, in such amounts as the Board of Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power or would be required to indemnify him against such liability under the provisions of this Article EIGHTH or of the Oklahoma General Corporation Act. (5) Any right to indemnification conferred in this Article EIGHTH shall be a contract right and shall not be exclusive of any other right which any person may have or hereafter acquire under the Corporation's Certificate of Incorporation, bylaws, or any statute, bylaw, agreement, resolution of shareholders or directors or otherwise. NINTH. Except upon the affirmative vote of shareholders holding all the issued and outstanding shares of Common Stock, no amendment to this Certificate of Incorporation may be adopted by the Corporation which would impose personal liability for the debts of the Corporation on the shareholders of the Corporation or which would amend, alter, repeal or adopt any provision inconsistent with this Article NINTH. TENTH. Sections 1145 through 1155 of Title 18 of the Oklahoma Statutes shall not apply to the Corporation. ELEVENTH. Except as set forth in the bylaws of the Corporation, an action required by the provisions of the Oklahoma General Corporation Act to be taken, or which may be taken, at any annual or special meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing or by electronic transmission, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand, by certified or registered mail, return receipt requested, or electronic transmission. TWELFTH. Subject to the limitations set forth in this Certificate of Incorporation, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon shareholders herein are granted subject to this reservation. THIRTEENTH. The name and mailing address of the incorporator is: Michael M. Stewart 1800 Mid America Tower 20 North Broadway Oklahoma City, OK 73102-8273 Executed this 24th day of April, 2002. ------ ------- /s/ Michael M. Stewart ------------------------------------ MICHAEL M. STEWART, INCORPORATOR EX-3.2 6 ex3-2_11276.txt BYLAWS OF PALWEB OKLAHOMA CORPORATION EXHIBIT 3.2 ----------- BYLAWS OF PALWEB OKLAHOMA CORPORATION (AS ADOPTED MAY 2, 2002) TABLE OF CONTENTS TO BYLAWS OF PALWEB OKLAHOMA CORPORATION (AN OKLAHOMA CORPORATION) PAGE ---- ARTICLE I - SHAREHOLDERS.....................................................1 Section 1.01. Annual Meeting.......................................1 Section 1.02. Special Meetings.....................................1 Section 1.03. Notice of Meetings...................................1 Section 1.04. Quorum...............................................2 Section 1.05. Organization.........................................2 Section 1.06. Conduct of Business..................................3 Section 1.07. Proxies and Voting...................................3 Section 1.08. Stock List...........................................4 Section 1.09. Inspectors of Elections..............................5 Section 1.10. Voting Procedures....................................5 Section 1.11. Notice of Shareholder Nomination and Shareholder Business...............................6 ARTICLE II - BOARD OF DIRECTORS..............................................7 Section 2.01. Number and Term of Office............................7 Section 2.02. Vacancies............................................7 Section 2.03. Regular Meetings.....................................7 Section 2.04. Special Meetings.....................................8 Section 2.05. Quorum...............................................8 Section 2.06. Participation in Meetings by Conference Telephone..........................................8 Section 2.07. Written Consents.....................................8 Section 2.08. Conduct of Business..................................8 Section 2.09. Powers...............................................9 Section 2.10. Compensation of Directors............................9 ARTICLE III - COMMITTEES....................................................10 Section 3.01. Executive Committee.................................10 Section 3.02. Other Committees of the Board of Directors..........10 Section 3.03. Limitations on Power and Authority of Committees....10 Section 3.04. Conduct of Business.................................11 ARTICLE IV - OFFICERS.......................................................11 Section 4.01. Generally...........................................11 Section 4.02. Chairman of the Board...............................11 Section 4.03. Vice Chairman of the Board..........................11 Section 4.04. President...........................................12 Section 4.05. Vice Presidents.....................................12 Section 4.06. Secretary...........................................12 Section 4.07. Treasurer...........................................12 Section 4.08. Delegation of Authority.............................12 Section 4.09. Removal.............................................12 Section 4.10. Action with Respect to Securities of Other Corporations......................................13 ARTICLE V - STOCK...........................................................13 Section 5.01. Certificates of Stock...............................13 Section 5.02. Transfers of Stock..................................13 Section 5.03. Record Date.........................................13 Section 5.04. Lost, Stolen or Destroyed Certificates..............14 Section 5.05. Regulations.........................................14 ARTICLE VI - NOTICES........................................................14 Section 6.01. Notices.............................................14 Section 6.02. Waivers.............................................15 ARTICLE VII - MISCELLANEOUS.................................................15 Section 7.01. Facsimile Signatures................................15 Section 7.02. Corporate Seal......................................15 Section 7.03. Reliance upon Books, Reports and Records............15 Section 7.04. Fiscal Year.........................................15 Section 7.05. Time Periods........................................16 ARTICLE VIII - AMENDMENTS...................................................16 ARTICLE IX - ELECTRONIC TRANSMISSION........................................16 ii BYLAWS OF PALWEB OKLAHOMA CORPORATION (AS ADOPTED MAY 2, 2002) ARTICLE I - SHAREHOLDERS SECTION 1.01. ANNUAL MEETING An annual meeting of the shareholders, for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within thirteen months subsequent to the later of the date of incorporation or the last annual meeting of the shareholders. The board of directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may be held solely by means of remote communication. SECTION 1.02. SPECIAL MEETINGS Special meetings of the shareholders, for any purpose or purposes prescribed in the notice of the meeting, may be called by the Board of Directors or by the Chairman of the Board or the President and shall be held on such date, and at such time as they or he shall fix. SECTION 1.03. NOTICE OF MEETINGS Written notice of the place, if any, date, and time of all meetings, and the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at the meetings, of the shareholders shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each shareholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Oklahoma General Corporation Act or the Certificate of Incorporation). The term "Certificate of Incorporation" as used herein shall mean the Certificate of Incorporation of the corporation as may be amended from time to time. Notice of a special meeting of the shareholders shall also state the purpose or purposes for which the meeting is called. When a meeting is adjourned to another place, if any, date or time, written notice need not be given of the adjourned meeting if the place, if any, date, and time thereof and the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at the adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, if any, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. If a meeting is to be held solely by remote communication, notice of a meeting shall also provide the information required to gain access to the shareholder list by reasonably accessible electronic network; provided, however, that such list shall only be available to shareholders of the corporation. Notice may be given effectively to shareholders if given by a from of electronic transmission consented to by the shareholder to whom the notice is given. The consent shall be revocable by the shareholder by written notice to the corporation. Such consent shall be deemed revoked if (a) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with the consent; and (b) the inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat the inability as a revocation shall not invalidate any meeting or other action. Notice shall be deemed effectively given if by (i) facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice; (ii) electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (iii) a posting on an electronic network together with separate notice to the shareholder of the specific posting, upon the later of the posting and the giving of separate notice; and (iv) any other form of electronic transmission, when directed to the shareholder in accordance with the shareholder's consent. An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein. SECTION 1.04. QUORUM At any meeting of the shareholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person, represented by proxy or by means of remote communication, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law or by the Certificate of Incorporation. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of the stock entitled to vote who are present, in person, represented by proxy or by means of electronic communication, may adjourn the meeting to another date, or time. SECTION 1.05. ORGANIZATION Such person as the Board of Directors may have designated or, in the absence of such a person, the highest ranking officer of the corporation who is present shall call to 2 order any meeting of the shareholders and act as chairman of the meeting. In the absence of the Secretary of the corporation, the secretary of the meeting shall be such person as the chairman appoints. SECTION 1.06. CONDUCT OF BUSINESS The chairman of any meeting of shareholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him in order. SECTION 1.07. PROXIES AND VOTING At any meeting of the shareholders, every shareholder entitled to vote may vote in person or by proxy authorized in such manner as specifically permitted by the Oklahoma General Corporation Act or as the corporation may otherwise permit. Proof of such authority shall be filed in accordance with the procedure established for the meeting. If authorized by the Board of Directors, the requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission; provided that the electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the shareholder or proxyholder. The validity and authenticity of any proxy shall be determined by the corporation. Each shareholder 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 law or by the Certificate of Incorporation. All voting, except where otherwise required by law or by the Certificate of Incorporation, may be by a voice vote; provided, however, that upon demand therefor by a shareholder entitled to vote or his proxy, a stock vote shall be taken. Every stock vote shall be taken by ballots, each of which shall state the name of the shareholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the chairman of the meeting. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law or by the Certificate of Incorporation, all other matters shall be determined by a majority of the votes cast. Notwithstanding the provisions of this Section 1.07, any action, except as set forth below, required or which may be taken at any annual or special meeting of the shareholders may be taken without a meeting, without prior notice or a vote, if a consent or consents in writing or by electronic transmission, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in this state, its principal place of business, 3 or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand, by certified or registered mail, return receipt requested, or electronic transmission. Such written consent or consents shall be filed with the minutes of the proceedings of the shareholders, provided the filings shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those shareholders who have not consented in writing. Shareholders may, unless the certificate of incorporation otherwise provides, act by written consent to elect directors; provided however, that if the consent is less than unanimous, the action by written consent may be in lieu of holding an annual meeting only if all the directorships to which directors could be elected at an annual meeting held at the effective time of the action are vacant and are filled by the action. Every written consent shall bear the date of signature of each shareholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this section to the corporation, written consents signed by a sufficient number of holders to take action are delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand, by certified or registered mail, return receipt requested, or by electronic transmission. An electronic transmission consenting to an action to be taken and transmitted by a shareholder or proxyholder, shall be deemed to be written, signed and dated for the purposes herein, provided that such electronic transmission sets forth or is delivered with information from which the corporation can determine (a) that the shareholder or proxyholder was authorized to act for the shareholder or proxyholder and (b) the date on which such shareholder or proxyholder transmitted such electronic transmission. The date on which such electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. An electronic transmission shall be deemed to be delivered when reproduced in paper form and delivered to (i) the corporation's registered office, (ii) its principal place of business or (iii) an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded, or as provided by resolution of the board of directors of the corporation. SECTION 1.08. STOCK LIST The officer who has charge of the stock ledger of the corporation shall prepare a complete list of shareholders entitled to vote at any meeting of shareholders, arranged in alphabetical order for each class of stock and showing the address of each such shareholder and the number of shares registered in the name of each shareholder. The 4 corporation shall not be required to include electronic mail addresses or other electronic contact information of a shareholder on the list. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting, (i) on a reasonably accessible electronic network, or (ii) during ordinary business hours at the principal place of business of the corporation. If the meeting is to be held at a place, the stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to examination by any shareholder who is present. If the meeting is to be held solely by means of remote communication, the list shall be open to examination of any shareholder during the whole time of the meeting on a reasonably accessible electronic network. The stock ledger shall be the only evidence as to the identity of the shareholders entitled to examine the stock list and to vote in person or by proxy at the meeting. SECTION 1.09. INSPECTORS OF ELECTIONS The corporation shall, in advance of any meeting of shareholders, appoint one or more persons to act as inspector of elections at the meeting and make a written report thereof. The corporation may designate one or more persons as an alternate inspector to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of shareholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of the inspector's ability. The inspector or inspectors, if appointed, shall (i) ascertain the number of shares outstanding and the voting power of each; (ii) determine the shares represented at the meeting and the validity of proxies and ballots; (iii) count all votes and ballots; (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and (v) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of such inspectors. The person presiding at the meeting of shareholders shall announce the date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting. No ballot, proxy or vote, nor any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the district court upon application by a shareholder shall determine otherwise. SECTION 1.10. VOTING PROCEDURES In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those with the proxies, any information provided by electronic transmission or remote 5 communication, ballots and the regular books and records of the corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes that the shareholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted by the Oklahoma General Corporation Act or these bylaws, the inspectors at the time they may their certification as required by these Bylaws, shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that the information is accurate and reliable. SECTION 1.11. NOTICE OF SHAREHOLDER NOMINATION AND SHAREHOLDER BUSINESS At a meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. Nominations for the election of directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Other matters to be properly brought before the meeting must be: (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, including matters covered by Rule 14a-8 under the Securities Exchange Act of 1934, as in effect from time to time; (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 shareholder, as provided below. A notice of the intent of a shareholder to make a nomination or to bring any other matter before the meeting shall be made in writing and received by the Secretary of the corporation not more than 150 days and not less than 90 days in advance of the annual meeting or, in the event of a special meeting of shareholders, such notice shall be received by the Secretary of the corporation not later than the close of the fifteenth day following the day on which notice of the meeting is first mailed to shareholders. Every such notice by a shareholder shall set forth: (a) the name and residence address of the shareholder of the corporation who intends to make a nomination or bring up any other matter; (b) a representation that the shareholder is a registered holder of the corporation's voting stock and intends to appear in person or by proxy at the meeting to make the nomination or bring up the matter specified in the notice; (c) with respect to notice of an intent to make a nomination, a description of all arrangements or understandings among the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; 6 (d) with respect to notice of an intent to make a nomination, such other information regarding each nominee proposed by such shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated by the Board of Directors of the corporation; and (e) with respect to notice of an intent to bring up any other matter, a description of the matter, and any material interest of the shareholder in the matter. Notice of intent to make a nomination shall be accompanied by the written consent of each nominee to serve as director of the corporation, if so elected. At the meeting of shareholders, the Chairman of the meeting shall declare out of order and disregard any nomination or other matter not presented in accordance with this section. ARTICLE II - BOARD OF DIRECTORS SECTION 2.01. NUMBER AND TERM OF OFFICE The number of directors who shall constitute the whole board shall be such number as fixed from time to time by the Board of Directors, except that the number of directors constituting the initial Board of Directors shall be equal to the number of directors named in the Certificate of Incorporation or elected by the incorporators, as the case may be. Each director shall serve until his successor is elected and qualified or until his earlier resignation or removal. Whenever the authorized number of directors is increased between annual meetings of the shareholders, a majority of the directors then in office shall have the power to elect such new directors for the balance of a term and until their successors are elected and qualified. Any decrease in the authorized number of directors shall not become effective until the expiration of the term of the directors then in office unless, at the time of such decrease, there shall be vacancies on the board which are being eliminated by the decrease. SECTION 2.02. VACANCIES If the office of any director becomes vacant by reason of death, resignation, disqualification, removal or other cause, a majority of the directors remaining in office, although less than a quorum, may elect a successor for the unexpired term and until his successor is elected and qualified. SECTION 2.03. REGULAR MEETINGS Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required. 7 SECTION 2.04. SPECIAL MEETINGS Special meetings of the Board of Directors may be called by one-third (1/3) of the directors then in office or by the chief executive officer and shall be held at such place, on such date, and at such time as they or he shall fix. Notice of the place, date, and time of each such special meeting shall be given each director by whom it is not waived in one or more of the following ways: (i) by mailing written notice not less than three (3) days before the meeting, or (ii) by personally delivering the same not less than eighteen (18) hours before the meeting; or (iii) by telegraphing, transmitting by facsimile or telephoning the same in a manner reasonably designed to reach the director not less than eighteen (18) hours before the meeting; or (iv) by electronic transmission pursuant to authorization of the Board of Directors. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. SECTION 2.05. QUORUM At any meeting of the Board of Directors, a majority of the total directors then in office, but not less than one-third (1/3) of the total number of directors constituting the whole board, shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of the directors present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof. SECTION 2.06. PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such board or committee by means of conference telephone or other 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 2.07. WRITTEN CONSENTS Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors. The filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. SECTION 2.08. CONDUCT OF BUSINESS At any meeting of the Board of Directors at which a quorum of the directors is present, business shall be transacted in such order and manner as the board may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except as otherwise provided herein or required by law or by the Certificate of Incorporation. 8 SECTION 2.09. POWERS The Board of Directors may, except as otherwise required by law or by the Certificate of Incorporation, exercise all such powers and do all such acts and things as may be exercised or done by the corporation, including, without limiting the generality of the foregoing, the unqualified power: (1) To declare dividends from time to time in accordance with law; (2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine; (3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith; (4) To remove any officer of the corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being; (5) To confer upon any officer of the corporation the power to appoint, remove and suspend subordinate officers and agents; (6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers and agents of the corporation and its subsidiaries as it may determine; (7) To adopt from time to time such insurance, retirement, and other benefit plans for directors, officers and agents of the corporation and its subsidiaries as it may determine; and, (8) To adopt from time to time regulations, not inconsistent with these bylaws, for the management of the corporation's business and affairs. SECTION 2.10. COMPENSATION OF DIRECTORS .............Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the directors. 9 ARTICLE III - COMMITTEES SECTION 3.01. EXECUTIVE COMMITTEE The Board of Directors may designate an Executive Committee to serve at the pleasure of the board and shall elect a director or directors to serve as the member or members of the Executive Committee, designating, if it desires, other directors as alternative members who may replace any absent or disqualified member at any meeting of the Executive Committee. The Executive Committee, except to the extent as it may be restricted from time to time by the vote of a majority of the total number of directors, 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 subject to the limitations set forth on Section 3.03. Unless expressly restricted by resolution of the Board of Directors, the Executive Committee shall have the power and authority to declare a dividend, to authorize the issuance of stock and to adopt a certificate of ownership and merger. In the absence or disqualification of any member of the Executive Committee, and any alternate member in his place, the member or members of the Executive Committee present at the meeting and not disqualified from voting, whether or not he or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. SECTION 3.02. OTHER COMMITTEES OF THE BOARD OF DIRECTORS The Board of Directors may from time to time designate other committees of the board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the board and shall, for those committees, elect a director or directors to serve as the member or members, designating, if it desires, other directors as alternative members who may replace any absent or disqualified member at any meeting of the committee. Any committee so designated may exercise the power and authority of the Board of Directors to the extent the resolution designating the committee or a supplemental resolution of the Board of Directors shall so provide subject to the limitation set forth in Section 3.03. In the absence or disqualification of any member of any committee and any alternate member in his place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. SECTION 3.03. LIMITATIONS ON POWER AND AUTHORITY OF COMMITTEES No committee of the Board of Directors shall have any power or authority in reference to amending the certificate of incorporation of the corporation (except that the Executive Committee, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, may fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion 10 into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of the shares in any series of stock or authorize the increase or decrease of the shares of any series), adopting an agreement of merger or consolidation, recommending to the shareholders the sale, lease or exchange of all or substantially all of the property and assets of the corporation, recommending to the shareholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation. SECTION 3.04. CONDUCT OF BUSINESS Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the total committee 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. Minutes of each committee meeting shall be prepared, approved by the chairman of the meeting and filed with the Secretary of the corporation. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. ARTICLE IV - OFFICERS SECTION 4.01. GENERALLY The officers of the corporation shall consist of a President and a Secretary and such other senior or subordinate officers as may from time to time be elected by the Board of Directors. The Board of Directors may also elect from its number a Chairman and Vice Chairman of the Board of the corporation. Officers shall be elected by the Board of Directors, which shall consider that subject at its first meeting after every annual meeting of shareholders. Each officer shall hold his office until his successor is elected and qualified or until his earlier resignation or removal. Any number of offices may be held by the same person. SECTION 4.02. CHAIRMAN OF THE BOARD The Chairman of the Board, if any, shall, if present, preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors. He shall be the senior officer of the corporation and shall be responsible for overall planning and policy. SECTION 4.03. VICE CHAIRMAN OF THE BOARD The Vice Chairman of the Board shall perform such duties as the Board of Directors shall prescribe. In the absence or disability of the Chairman of the Board, the Vice Chairman shall perform the duties and exercise the powers of the Chairman of the Board. 11 SECTION 4.04. PRESIDENT The President shall be the chief executive officer of the corporation. Subject to the provisions of these bylaws and to the direction of the Board of Directors, he shall have the responsibility for the general management and control of the affairs and business of the corporation and shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him by the Board of Directors. He shall have power to sign all stock certificates, contracts and other instruments of the corporation which are authorized. He shall have general supervision and direction of all of the other officers and agents of the corporation. SECTION 4.05. VICE PRESIDENTS Each Vice President shall perform such duties as the Board of Directors shall prescribe. In the absence or disability of the President, the Vice President with the highest ranking shall perform the duties and exercise the powers of the President. SECTION 4.06. SECRETARY The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the shareholders and the Board of Directors. He shall have charge of the corporate records. SECTION 4.07. TREASURER The Treasurer, if any, shall have the custody of all monies and securities of the corporation and shall keep regular books of account. He shall make such disbursements of the funds of the corporation as are proper and shall render from time to time an account of all such transactions and of the financial condition of the corporation. SECTION 4.08. DELEGATION OF AUTHORITY The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof. SECTION 4.09. REMOVAL Any officer of the corporation may be removed at any time, with or without cause, by the Board of Directors or by such person to whom the Board of Directors may delegate such authority. 12 SECTION 4.10. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS Unless otherwise directed by the Board of Directors, the President shall have power to vote and otherwise act on behalf of the corporation, in person or by proxy, at any meeting of shareholders of or with respect to any action of shareholders 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 corporation. ARTICLE V - STOCK SECTION 5.01. CERTIFICATES OF STOCK Each shareholder shall be entitled to a certificate signed by, or in the name of, the corporation by the Chairman or the Vice Chairman of the Board, or the President or a Vice President, and by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer, certifying and representing the number of shares owned by him. Any of or all the signatures on the certificate may be facsimile. The board of directors may provide by resolution or resolutions that some or all of any or all classes or series of the corporation's stock may be uncertificated shares. SECTION 5.02. TRANSFERS OF STOCK Transfers of stock shall be made only upon the transfer books of the corporation kept at an office of the corporation or by transfer agents designated to transfer shares of the stock of the corporation. Except where a certificate is issued in accordance with Section 5.04 of these bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor. SECTION 5.03. RECORD DATE The Board of Directors may fix a record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. In order that the corporation may determine the shareholders entitled to consent to corporate action in writing without a meeting, the Board of 13 Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the Oklahoma General Corporation Act, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in this state, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to a corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Oklahoma General Corporation Act, the record date for determining shareholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. In order that the corporation may determine the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the shareholders 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 a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining shareholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. SECTION 5.04. LOST, STOLEN OR DESTROYED CERTIFICATES In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity. SECTION 5.05. REGULATIONS The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish. ARTICLE VI - NOTICES SECTION 6.01. NOTICES Except as otherwise permitted herein, whenever notice is required to be given to any shareholder, director, officer, or agent, such requirement shall 14 not be construed to mean personal notice. Such notice may in every instance be effectively given by depositing a writing in a post office or letter box, first class postage prepaid, by dispatching a prepaid telegram, addressed to such shareholder, director, officer, or agent at his or her address as the same appears on the books of the corporation or by electronic transmission. The time when such notice is deposited or dispatched shall be the time of the giving of the notice. SECTION 6.02. WAIVERS A written waiver of any notice, signed by a shareholder, director, officer, or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such shareholder, director, officer, or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver. ARTICLE VII - MISCELLANEOUS SECTION 7.01. FACSIMILE SIGNATURES In addition to the provisions for the use of facsimile signatures elsewhere specifically authorized in these bylaws, facsimile signatures of any officer or officers of the corporation may be used whenever and as authorized by the Board of Directors or a committee thereof. SECTION 7.02. CORPORATE SEAL The Board of Directors may provide a suitable seal, containing the name of the corporation and the word "Oklahoma", which seal shall be placed in the custody of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer. SECTION 7.03. RELIANCE UPON BOOKS, REPORTS AND RECORDS A member of the Board of Directors or a member of any committee designated by the Board of Directors, in the performance of his duties, shall be fully protected in relying in good faith upon the records of the corporation and upon such information, opinions, reports or statements presented to the corporation by any of the corporation's officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such officer's, employee's, committee's or other person's competence and who have been selected with reasonable care by or on behalf of the corporation. SECTION 7.04. FISCAL YEAR The fiscal year of the corporation shall be as fixed by the Board of Directors. 15 SECTION 7.05. TIME PERIODS In applying any provision of these bylaws which require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included. ARTICLE VIII - AMENDMENTS These bylaws may be amended or repealed by the Board of Directors at any meeting. ARTICLE IX - ELECTRONIC TRANSMISSION As used herein, electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process. 16 -----END PRIVACY-ENHANCED MESSAGE-----